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Reality check: China not stealing jobs from US

(People's Daily Online)    11:27, March 30, 2017

Economic and trade relations between China and the U.S. have lately attracted global attention. Statistics about bilateral economic ties are best able to explain the truth.

China and the U.S. enjoy a close trade bond. China is the U.S.'s largest trade partner, and the U.S. is China's second largest. Bilateral trade volume between the countries stood at only $2.5 billion when the two established diplomatic ties in 1979. That number had increased 207-fold to $519.6 billion 37 years later.

Such stratospheric growth is due to complementary nature of both parties' economic situations, and their cooperation has reliably led to mutually beneficial results. China is the destination of 26 percent of America's exported Boeing aircraft, 56 percent of the country's soybeans, 16 percent of its automobiles and 15 percent of its integrated circuits. Jack Ma, founder of Alibaba Group, a Chinese e-commerce company, even proposed offering 1 million jobs for U.S. citizens in an attempt to build closer relations between China's growing consumer market and American manufacturers.

However, some in the U.S. find endless faults with China's trade surplus, criticizing the country for stealing jobs from its trade partner across the ocean. Such outdated thinking is not at all reflective of the truth. In reality, China's trade surplus against the U.S. is caused by the two countries' different economic structures. According to Steven Roach, a senior researcher at Yale University, the U.S. has had trade deficits with 101 countries.

In fact, China's surplus doesn't necessarily benefit China or disadvantage the U.S. Bilateral trade between the two countries helps American families to save an average of more than $850 on a yearly basis. About 40% o the trade surplus is actually generated by U.S. companies in China. In addition, more than 90 percent of profits from Chinese products exported to U.S. are earned by American enterprises.

As the two countries elevate their economies, their bilateral trade structure will also transform. Over the past decade, U.S. exports to China increased by 11 percent annually, while China's exports to the U.S. increased by 6.6 percent. The bilateral trade volume in the service sector has surpassed $100 billion, with the U.S. maintaining a surplus against China.

Two-way investment between China and the U.S. has surpassed $170 billion.

Nevertheless, this situation, which enhances the economic energy of both countries, has been misunderstood by some. These people believe China's investment in the U.S. is a threat.

By the end of 2016, the U.S. had invested nearly $80 billion in 67,000 projects in China, accounting for 7.8 percent of China's approved foreign investment and 4.5 percent of its paid-in foreign investment. According to a report on China's business environment, issued by the U.S.-China Business Council in October 2016, 90 percent of American enterprises have been profitable in China. As China goes further in its opening-up, American enterprises will enjoy still more investment opportunities in China's improved business environment.

In addition, China's investments have brought tangible benefits to the U.S.economy. For instance, Chinese enterprises have invested more than $3 billion in the state of Michigan, injecting huge energy into the region. By the end of 2016, non-financial direct investment of Chinese enterprises in the U.S. had reached nearly $50 billion. Chinese companies have invested in 44 states and created nearly 100,000 jobs.

China is the largest developing nation, and the U.S. is the largest developed one. Both are major world economies, and together they account one-quarter of the world's population, one-third of its economic volume and one-fifth of its bilateral trade volume. Healthy and stable cooperation between the countries not only benefits the people of both nations, it is also what the rest of the world has come to expect.

Cooperation is the only correct choice for China and the U.S. This is the wish of people from both countries, and it will stand the test of time.

This article is edited and translated from a People's Daily commentary titled 把握中美经贸关系需要从现实出发(钟声) 

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