Asian Studies

The United States and China have long been mutually beneficial trade partners, going back to the time just following World War I when the US reached out to various countries in an effort to create positive relationships. As we move forward into the new age of technology, that relationship persists, with American exporting a large number of high technology goods to China each year. Though many opinions exist on whether this continuing relationship is a good thing for the United States, it is clear that the US benefits greatly from its high-tech export relationship with China. The benefits come in the form of enhanced cooperation and dependability on both sides, a mutual commitment to greater development in the future, and the expansion possibilities in China moving forward. Each of these things provides a distinct and important reason why US exportation of high-tech goods into China is a good thing, and will continue to be a good thing as the countries move forward.

One primary reason why it is important for the United States to continue its exportation to China has everything to do with installing mutual dependability on both sides. The current relationship between the countries is one where the United States is not only exporting to China it is also important a number of goods. The countries rely upon each other for a number of things, and developing this type of relationship can only serve the United States well moving into the future. As a globally dominant country, China is a major power broker on all sorts of issues, including those of a military variety. Henry M. Paulsen writes of the shifting dynamic between China and many of the worlds powers. He notes the fact that continuing to engage China can only be a good thing for the United States moving forward, and that current efforts are helping to align the US for success in the near future. In his report on American-Chinese ties, Paulsen writes, Chinas rapid emergence as a global economic power presents numerous challenges on issues ranging from trade and investment to commodity markets and the environment. But the inextricable interdependence of Chinas growth and that of the global economy requires a policy of engagement (Paulsen, 2008). One thing that is clear is that in terms of economic and military might, China could potentially pose a large threat to the United States. A staple of American policy over the last century has been developing a relationship with China for the benefit of both countries, making it almost unreasonable for either country to engage in a global military conflict. Though the economic and developmental advantages of a continued high-tech export relationship are also evident, this pacification of a potentially dangerous enemy is something that cannot be ignored. It is important to note, as well, that China understands and values this relationship. The United States has positioned itself well to maintain a friendly rapport with the Chinese, and the continuing technological partnership is a huge part of that. As William Lambers of the History News Network wrote, How the United States deals with China is one of the greatest foreign policy challenges Americans face in the 21st century. Preventing an arms race with the fast-growing Asian power is critical to U.S. security. At their recent meeting both President Bush and Chinese President Hu Jintao acknowledged the need to better increase their exchanges and cooperation between their armed forces (Lambers, 2006). The two countries have some distinct and notable differences, and that presents a major problem in communications on a host of different issues. The high-tech export relationship that the United States has been fostering is one way of opening up communication lines and starting reasonable discourse with the Chinese. This must continue moving forward for the sake of American security, both on the economic front and the exceedingly slippery military front.

Looking beyond the military reasons for continuing such a relationship, one must consider how the export relationship is offering benefits to the United States in terms of research and development. Understanding this point requires one to understand the very nature of the American-Chinese export relationship. With high-technology products, it is not a simple question of dictation. The U.S. companies are not just sending over products for the sake of pure profit. Instead, the two countries work together to develop better technologies, and each has taken a more active role in pursuing new technologies. It is important to keep in mind that there is much we can learn from the Chinese industry leaders, and they understand the mutual benefits, as well. The Chinese Ministry of Commerce indicated this fact in an address on the importance of its American relationship. They wrote, Despite the frictions in bilateral trade, the two governments are increasingly mature in dealing with Sino-US economic and trade ties. Strengthened cooperation and equal consultation are becoming the keynote of Sino-US economic and trade ties. Trust is the foundation of cooperation. Thus in developing high-tech trade with China, the US side should regard the Chinese side as a partner that it could sincerely cooperate with (Chinese Ministry of Commerce, 2010). This quotation indicates the level of mutual respect that seems to exist between the two countries, and offers an enlightened view on what seems to be a symbiotic relationship. As that address goes on to state, the relationship between American and Chinese companies is an important one both in practice and in theory. Consumer confidence and shareholder confidence is bound to be at an all-time high when these mutually beneficial export relationships are at play, at least in the opinion of the Chinese. That same address goes on to say, MOFCOM and DOC have signed the Guidelines on the Development of China-US High Technology and Strategic Trade to guide and regulate bilateral high-tech and strategic trade development. According to the Guidelines, MOFCOM and DOC have agreed to take civil aviation and aerospace and information technology as the first batch of priority areas of expanding bilateral high-tech trade, and meanwhile the two sides are drafting cooperation plans (Chinese Ministry of Commerce, 2010). The issue of promoting cooperation with a powerful country is one that the United States should be interested in moving forward.

The United States must also take a broad view at the global markets in todays world, seeing the realities for what they are. Though China has jumped up to third on the list of US export destinations, it still lags behind to some extent in high-technology products. According to a report by the Global Times, this is because American high-technology export controls are restricting the types of items that can be shipped to China. That report stated that digital machine tools, certain fiber materials, and electronic devices (Global Times, 2010) were among those items that could not be shipped without tight licensing practices. The American regulations are being reconsidered, but at current time the government is looking to restrict how much technology China has to work with for military purposes. What the American government needs to recognize is two-fold. First, the current global climate and American-Chinese relationship is such that neither country could ever afford to go to war with the other. Secondly, the products that the United States is restricting are available through other sources around the world, meaning that China has the ability to import them from places other than the United States. This is hurting American companies, who would otherwise be able to take advantage of a huge potential market in China. The Global Times article states, The US is no longer the sole owner of many technologies. Many items in the export control list are being sold freely elsewhere in the world by non- US competitors (Global Times, 2010). The article goes on to note the fact that the Chinese would be much more willing to import American goods in these categories than goods from other countries, both because of the previously stated working relationship and the American superiority of products. It states, China has a large appetite for US exports in almost every area where the US has a competitive advantage, such as machinery, aerospace, new materials, biotechnology, agriculture, and services (Global Times, 2010).

To this point, an article by Cong Cao of UPIAsia.com details why the United States holds onto its current controls over exports to China. It details a Cold War mentality and the fact that the United States purports to want military superiority over China. Those perceived military benefits are outweighed by financial costs, though, especially in a difficult economy. Given the mutually beneficial relationship that the United States is currently working on with China in terms of technology, it is possible that the United States could develop new technologies in conjunction with China, making both countries stronger and more dependent upon one another. The article states, It is under these circumstances that the United States-China joint commissions on commerce and trade and on science and technology cooperation and high-level dialogue on strategic and economic issues all brought the sensitive issue of high-tech trade to the table. But no one should expect the call from Chinese Premier Wen to accelerate a change of course on the part of the U.S. government concerning high-tech exports to China (Cao). The article also indicates that the current US policy is closing the door to potential economic benefits and job growth for American companies. Cao writes, U.S. stubbornness on this issue has resulted in a significant decline in its share of Chinas technology imports, from 18.3 percent in 2001 to 7 percent in 2008. This has translated into a huge loss to U.S. companies and an enlarging deficit with China in high-tech trade. Because of this, U.S. business has campaigned for an overhaul of this export control regime (Cao).

If one is to consider the relationship between the United States and China, it is important to consider items in addition to just the high-technology trade market. By working the Chinese to develop a better relationship and more American exportation, new, emerging opportunities could be exploited. The Chinese market is one with high growth potential, as the countrys huge population is highly interested in American products of all kinds. The Global Times article indicates that the United States could gain important leverage in economic expansion talks by opening up its exports to China even further. The article states, The US can also seize new market opportunities by encouraging China to further open its economy through the ongoing Doha Round Negotiations at the WTO (Global Times, 2010). This is something that Chinese Vice Premier Wu Yi indicated in her comments to the Chinese Chamber of International Commerce. She said, Facts have proven that China-U.S. economic and trade cooperation has brought huge benefits to the two nations and two peoples (Yi, 2007). For those looking to put a dollar figure on the amount of growth that the American companies could see in China, it is not easy to pinpoint an exact amount. Some speculation has taken place, though. An article from the Chinese Consulate in Vancouver speculated that If the U.S. could ease export control to China and kept the 18.3 percent market share, it would export 60 billion dollar extra of high-tech products to China (Chinese Consulate, 2010). Those types of profits could be highly beneficial to an American economy that is currently struggling to create jobs and sustain growth. International trade expert Daniel Griswold posed some interesting arguments in favor of expanding Americas high-tech trade relationship with China, offering that an expansion of exports would open up other opportunities in the country. He wrote, American producers and workers have gained tremendously from growing export opportunities to China. Chinas fixed currency has allegedly discouraged exports to China, but that is not supported by the trade numbers. Since 2000, U.S. exports of goods to China have increased by 158 percent, from 16.2 billion to 41.8 billion in 2005. The rate of growth of U.S. exports to China since 2000 is more than 12 times the rate of growth of U.S. exports to the rest of the world other than China during the same period. Our leading exports to China are soybeans, cotton, and other agricultural products plastics, chemicals, wood pulp, and other industrial materials civilian aircraft and semiconductors, computer accessories, industrial machines and other machinery (Griswold, 2007). This widespread consumption is something worth considering, especially in light of the impending empowerment of a large, active Chinese population. The opportunities for expansion will most certainly exist, and an enhanced relationship between the US companies and the Chinese government will serve other industries well in addition to the technology sector.

In all, the arguments for the increased exportation of high-technology goods to China are well stated, and they make sense. The United States could further its mutually beneficial relationship with the Chinese, ensuring that neither country would benefit from going to war with the other. Additionally, it must recognize the realities of the market and understand that technologically advanced products are making their way into China anyway, even if the American government is cutting off its own companies from making such transactions. The old, Cold War mentality must be pushed aside, so that American companies in a number of fields can take advantage of the growing Chinese love for American products and the expanding nature of the Chinese economy. With the enhanced cooperation between the two nations, a number of positives would arise, including new technologies and advanced research capability. All of these things combine to make increased exportation an invertible no-brainer for the United States.