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Trade Divantage In The Balance Of Trade With China

Nations have never been self-sufficient, trade is thus inevitable. The essence of the trade being for the nations to acquire what they do not produce. In the process of this trade, some nations will import goods worth more than they export to a certain country. The difference between these imports and exports to and from a country is what is referred to as balance of trade. For the past few years, the US has witnessed an unimaginable bulge in its balance of trade in its trade with China. This bulge is however to the advantage of China. The US has been importing commodities from China worth more than her exports to China. Therefore, the trade between these two nations has been yielding a negative trade balance for the US. This negative trade balance is also called trade deficit. The table and graph below will my illustration for this. The analysis cover a five year period; from 2009 to 2013 (Trade Data & Analysis, 2013).
U.S.A value of Trade with China (2009 to 2013)
Year Exports
(figures in million dollars) Imports
(figures in million dollars) Balance
(figures in million dollars)
2013 122,016.3 440,443.5 -318,417.2
2012 110,483.6 425,578.5 -315,095.3
2011 103,986.5 399,378.9 -295,392.4
2010 91,911.1 364,952.6 -273,041.6
2009 69,496.7 296,373.9 -226,877.2

The graph below is a representation of the above data.

The data and graph above is clear indication of the trade balance in the US trade with China over a five year period- it is a negative for the US. It is notable that the trade deficit has maintained a steady surge over the period in study. This indicates that as the years progress, more imports from China are arriving into the US than the exports from the US are reaching China. The effect of this trade balance cannot be u...

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...ced from the US economy due to the trade deficit with China. Most of these jobs are taken over by China citizens through outsourcing or companies re-locating to China.
In addition, China has continually increased the percentage of debt the US owes it. The implications of this scenario are far reaching. Firstly, this scenario gives China a political leverage over the US. An increased amount of debt owed to China therefore works to counter the US influence in world politics in favor of China. Moreover, this has aided to keep the interest rates in the US low. This is to the advantage of the US economy though. Were the interest rates to rise, the recession of the US economy would soar uncontrollably. Therefore, the holding of a big US debt by China leads to China having huge influence over US policies; foreign relations policy and also economic policies.

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