China-U.S. Trade Issues

By Wayne M. Morrison on September 30, 2011

U.S.-China economic ties have expanded substantially over the past three decades. Total U.S.-China trade rose from $2 billion in 1979 to $457 billion in 2010. Because U.S. imports from China have risen much more rapidly than U.S. exports to China, the U.S. merchandise trade deficit has surged, rising from $10 billion in 1990 to $273 billion in 2010. The rapid pace of economic integration between China and the United States, while benefiting both sides overall, has made the trade relationship increasingly complex. This report provides an overview of U.S.-China trade relations. It describes the trends in commercial ties, identifies major trade issues, and lists major legislation in the 112th Congress.

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Peony Lui
Topics: 
Economy
Politics
Keywords: 
Trade
U.S.-China Relations
Economic Policy
Organization: 
Congressional Research Service

With Nixon in China

By Chas W. Freeman on September 30, 2011

On a chill, gray Monday morning, on February 21, 1972, I stood on the steps of the old Hongqiao Airport terminal. I had arrived in Shanghai twenty minutes in advance of President Nixon. I was on the backup plane, which arrived first, so I actually saw the arrival of Air Force One in Shanghai. I had studied Chinese in Taiwan, but this was, of course, my first encounter with the Chinese mainland.

The Shanghai Train Accident

By Kaiser Kuo & Jeremy Goldkorn on September 30, 2011

At least 284 people were injured on Tuesday when a train in the Shanghai metro smashed into another which had stalled on the tracks. The accident, which threw Shanghai into disarray, came only two months after another near-disastrous incident on the same line, and only three after a disaster on the high-speed bullet line connecting Wenzhou and Hangzhou. Like those early accidents, this one also sparked derisive outbursts from Chinese netizens, who took to their keyboards to ridicule the official characterization of the event as a “minor accident.”

Columbia Anthology of Chinese Folk and Popular Literature

By Victor H. Mair on September 28, 2011

In The Columbia Anthology of Chinese Folk and Popular Literature, two of the world’s leading sinologists, Victor H. Mair and Mark Bender, capture the breadth of China’s oral-based literary heritage. This collection presents works drawn from the large body of oral literature of many of China’s recognized ethnic groups—including the Han, Yi, Miao, Tu, Daur, Tibetan, Uyghur, and Kazak—and the selections include a variety of genres. Chapters cover folk stories, songs, rituals, and drama, as well as epic traditions and professional storytelling, and feature both familiar and little-known texts, from the story of the woman warrior Hua Mulan to the love stories of urban storytellers in the Yangtze delta, the shaman rituals of the Manchu, and a trickster tale of the Daur people from the forests of the northeast. The Cannibal Grandmother of the Yi and other strange creatures and characters unsettle accepted notions of Chinese fable and literary form. Readers are introduced to antiphonal songs of the Zhuang and the Dong, who live among the fantastic limestone hills of the Guangxi Zhuang Autonomous Region; work and matchmaking songs of the mountain-dwelling She of Fujian province; and saltwater songs of the Cantonese-speaking boat people of Hong Kong. The editors feature the Mongolian epic poems of Geser Khan and Jangar; the sad tale of the Qeo family girl, from the Tu people of Gansu and Qinghai provinces; and local plays known as “rice sprouts” from Hebei province. These fascinating juxtapositions invite comparisons among cultures, styles, and genres, and expert translations preserve the individual character of each thrillingly imaginative work.  —Columbia University Press

Book Review: 

Loh Su Hsing, The Asian Review of Books (September 7, 2011)

Hong Kong’s Recovery from the Global Financial Crisis

A 2009 Assessment

on September 28, 2011

Hong Kong’s economy was severely affected by the global financial crisis (through both trade and financial channels). A recovery is now underway, fueled by growth on the Mainland, supportive policies, and accommodative monetary conditions imported from the U.S. A 2009 International Monetary Fund consultation, which this report details, centered on the policies needed in the coming months to manage the economic recovery and the opportunities for Hong Kong SAR should the Mainland successfully rebalance from investment and exports toward private consumption.

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Topics: 
Economy
Keywords: 
Investment
Economic Policy
Global Financial Crisis
Organization: 
International Monetary Fund (IMF)

Market Integration in China

By Qingqing Chen, Chor-Ching Goh, Bo Sun, and Lixin Colin Xu on September 28, 2011

Over the last three decades, China's product, labor, and capital markets have become gradually more integrated within its borders, although integration has been significantly slower for capital markets. There remains a significant urban-rural divide, and Chinese cities tend to be under-sized by international standards. China has also integrated globally, initially through the Special Economic Zones on the coast as launching grounds to connect with world markets, and subsequently through the accession to the World Trade Organization. For future policy considerations, this paper argues that its economic production needs to be spatially concentrated, and its social services need to be spread out to the interior to ensure harmonious development and domestic integration through inclusive rural-urban transformations and effective territorial development.

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Topics: 
Economy
Keywords: 
Economic Growth
Markets
Rural-Urban Divide
Organization: 
World Bank

Growth Poles and Multipolarity

By Jonathon Adams-Kane and James Jerome Lim on September 28, 2011

This paper develops an empirical measure of growth poles and uses it to examine the phenomenon of multipolarity. The authors formally define several alternative measures, provide theoretical justifications for these measures, and compute polarity values for nation states in the global economy. The calculations suggest that China, Western Europe, and the United States have been important growth poles over the broad course of world history, and in modern economic history the United States, Japan, Germany, and China have had prominent periods of growth polarity. The paper goes on to analyze the economic and institutional determinants, both at the proximate and fundamental level, that underlie this measure of polarity, as well as compute measures of dispersion in growth polarity shares for the major growth poles.

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Topics: 
Economy
Keywords: 
Economic Growth
Organization: 
World Bank

China’s Holdings of U.S. Securities: Implications for the U.S. Economy

By Wayne M. Morrison, Marc Labonte on September 26, 2011

Given its relatively low savings rate, the U.S. economy depends heavily on foreign capital inflows from countries with high savings rates (such as China) to meet its domestic investment needs and to fund the federal budget deficit. The willingness of foreigners to invest in the U.S. economy and purchase U.S. public debt have helped keep U.S. real interest rates relatively low, which, until recently, contributed to rapid U.S. economic growth. However, many economists contend that U.S. dependency on foreign savings was a contributing factor to the U.S. housing bubble and subsequent global financial crisis. China’s policy of intervening in currency markets to limit the appreciation of its currency against the dollar (and other currencies) has made it the world’s largest and fastest growing holder of foreign exchange reserves. The large and growing U.S. public debt has raised concerns over the willingness of foreigners, including China, to continue to invest in U.S. public debt securities. Some Chinese analysts have urged the government to diversify its reserves away from U.S. dollar assets. while others have called for more rapid appreciation of China’s currency, which could lessen the need to hold U.S. assets.

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Peony Lui
Topics: 
Economy
Politics
Keywords: 
Monetary Policy
Renminbi
Debt
Currency
Economic Crisis
Organization: 
Congressional Research Service

An Australian Gets to Beijing, 1964

By Ross Terrill on September 24, 2011

In the early 1960s, few Westerners set foot in the People’s Republic of China. Australians needed permission from their own government to go there. Some got a green light, but Beijing guarded visas for people from non-Communist countries like precious jewels. Australia, in step with the U.S.A., still had not recognized Mao Zedong's government, which made getting a Beijing visa tougher.