U.S.-China Relations: Bilateral Trade Helps to Reduce Barriers by Zhang Wei

China's emergence on the global stage is a major event in recent years. America, as the only superpower left in the world, has strength in high technology and service, and its military power is also obvious. The relationship between these two countries might become the most important single relationship of the new century. Establishing a cooperative and unprejudiced relationship is critical to bringing mutual benefit to the U.S. and China in their long-term development.

China and the U.S. are important trading partners. Exports to China provide American companies with a quickly developing market and new opportunities. On the other hand, imports from China benefit American consumers by providing a wide variety of manufactured goods at relatively low prices. Although the bilateral trade relationship is overall quite stable, there are some fields that might bring particular challenges and opportunities, fields such as energy, the environment, and financial markets.

Energy supply and environmental improvement undoubtedly will be major tasks for the governments in Washington and Beijing, especially nowadays at a time of strong global demand for energy. As for China, since accumulated public wealth is increasing, people are now more willing to spend money on automobiles. This will lead to increasing energy demand and cause tension over the global energy supply. Meanwhile Beijing will be more and more concerned about infrastructure construction and its environmental effects as the country is growing and in the preparation for the 2008 Olympics Games. Thus developing renewable alternative energy and related clean technology are extremely urgent to China.

The U.S, faces similar challenges. It needs to make more progress to reach its environmental commitment as embodied in the president's proposal to reduce future gas consumption in the U.S. by 20% in 10 pears. What is more important, as energy is one of the key factors for economic prosperity and national security, more collaboration between the two governments is needed so that they can maintain social stability and keep the public's confidence. The financial service sector is another promising area for cooperation and development.

As China's markets boom, it needs major financial reform to sustain its economic growth in a more healthy way. To achieve this, it will require many bankers and financial experts experienced in modern banking and financial practices. These bankers and financiers will participate in China's economic growth and develop business relations for mutual benefit. Thus cooperation between China and the U.S. will be essential. As for example, U.S. Treasury Secretary Paulson has said that the agreement of Citicorp and Bear Stearns will help China become more "confident, peaceful and prosperous" and "help America to hedge against an uncertain Chinese future," which can ultimately benefit the U.S. economy in turn.