Economic Watch: Why "Made in China" makes U.S. better off

Source: Xinhua| 2017-07-06 21:13:31|Editor: Liangyu
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BEIJING, July 6 (Xinhua) -- While "Buy American" sentiment might be picking up steam in Washington and corporate America, it is a quirky reality that celebrations of U.S. Independence Day depend on China.

On July 4, Americans celebrated the annual festivity with fireworks, flags and outdoor grills -- the lion's share made in China.

The U.S. Census Bureau has said that Americans imported more than 300 million U.S. dollars worth of fireworks last year, 96 percent of which came from, you guessed it, China.

"We buy some fireworks from Mexico, but they're not as good as the Chinese. They've [Chinese] been making them for so many thousands of years. China does such a fantastic job," said Don Lantis, president of the National Fireworks Association.

While Independence Day is the most popular time of the year for Americans to fly the Stars and Stripes and cook outdoors, a vast majority of their flags and grills are from China.

He might not like it, but while U.S. President Donald Trump begs people to "Buy American," even making it a national slogan, American consumers have decided that what matters most is getting good prices.

Trade with China helps each American family save 850 dollars every year, according to China's Ministry of Commerce. From lamps to birthday candles, from flip-flops to mouse traps, Americans would find life an ordeal if they had to live a day without "Made in China."

As China has become the largest trading partner of the United States, some U.S. politicians blame China for bringing about a large trade deficit at the cost of U.S. jobs. However, this is jingoistic nonsense, as the facts and figures clearly point the other way.

About 40 percent of China's trade surplus is generated by U.S. companies in China, while bilateral trade and mutual investment in 2015 created 2.6 million jobs for the United States.

It is structural issues that contribute to the trade imbalances between the two countries, according to Zhang Yuyan, director of the Institute of World Economics and Politics under the Chinese Academy of Social Sciences.

"Tracking a trade deficit is misleading. All that [trade deficit] means that we in the United States consume more," said Tori K. Whiting, a research associate at Washington-based think tank The Heritage Foundation.

Experts say that to address these imbalances, which have been the focus of the Trump administration's trade policy toward China, both countries should carry out structural reforms rather than just narrow the trade deficit.

Meanwhile, China's current account has become more balanced in recent years. The share of its current account surplus to gross domestic product dropped below 2 percent in 2016, compared with about 9.9 percent in 2007.

To balance bilateral trade, the two countries agreed to take action to expand trade in beef and chicken, and increase access for U.S. financial firms, among steps as part of the initial result of a 100-day action plan.

At the end of June, China received the first shipment of U.S. beef after a 14-year ban, and with a rising middle class, industry insiders predict China will become a major importer of U.S. beef.

U.S. Secretary of Agriculture Sonny Perdue has said that this is tremendous news for the beef industry, cattle farmers and the U.S. economy in general.

In reciprocity, the United States has also greenlit imports of cooked poultry from China.

It is better for both sides to address economic differences such as trade imbalances through candid dialogue, said Chinese Consul General in Chicago Hong Lei.

"Further opening up markets, promoting bilateral investment, and strengthening trade ties at the local level could contribute to stronger and closer economic ties between China and the United States," he said.

"We believe Sino-U.S. economic cooperation is the trend of the times. We will continue to move forward," said Chinese Vice Finance Minister Zhu Guangyao.