Presentation Transcript
Embracing Globalization: Recasting U.S.-China Trade Relations : Embracing Globalization: Recasting U.S.-China Trade Relations Jiawen Yang, Ph.D.
Professor International Business and International Affairs
The George Washington University
The Globalization Trend: The Globalization Trend The classical international trade paradigm
Assumptions of factor mobility
Predictions of free trade
Foreign direct investment
Motivations
It is not just capital
The globalization drive in the 1990s
International trade liberalization
International financial liberalization
What next: labor mobility across countries?
Disparities in productivity and income
Why people want to migrate?
The Globalization Trend: The Globalization Trend The impact of information technology
Productivity improvement in developing countries
Service outsourcing
Challenges for industrial countries
Loss of comparative advantage in manufacturing industries
Real wage stagnation for regular-skilled workers
Political pressure for protection
Changing positions for industrial and developing countries in trade policies
Developing countries leaning more toward free trade
Industrial countries become more protetionist
U.S. – China Trade Paradigm: U.S. – China Trade Paradigm Comparative advantage
Mutual benefits and interdependence
Trade issues
U.S. trade deficit
The re-routing of exports to the U.S.
U.S. economic sanctions
China’s foreign exchange reserves
The Chinese currency
Leading Exporters and Importers in World Merchandise Trade, 2003 (Billion dollars and percentage): Leading Exporters and Importers in World Merchandise Trade, 2003 (Billion dollars and percentage) http://www.wto.org/english/res_e/statis_e/its2004_e/section1_e/i05.xls
Disagreement on U.S. Deficit Numbers Million U.S. Dollars: Disagreement on U.S. Deficit Numbers Million U.S. Dollars
Export Re-routing : Export Re-routing U.S. China Other
Economies Other
Economies Exports Exports Exports
Export Re-routing : U.S. China Other
Economies Other
Economies Exports Exports Exports Invest Invest Invest Export Re-routing
U.S. Economic Sanctions against China: U.S. Economic Sanctions against China U.S. China Capital intensive and high tech goods Labor intensive goods Trade based on
comparative advantage
U.S. Economic Sanctions against China: U.S. China Capital intensive and high tech goods Labor intensive goods Trade based on
comparative advantage U.S.
Economic
Sanctions U.S. Economic Sanctions against China
Bilateral Trade and Total Trade: Bilateral Trade and Total Trade China’s total trade is more balanced than the U.S. – China bilateral trade flows China’s Trade Balance 2004 ($Billion)
Slide12: China’s Foreign Exchange Reserves
($ Billion)
MAJOR FOREIGN HOLDERS OF U.S. TREASURY SECURITIES Billions of Dollars End of November 2004: MAJOR FOREIGN HOLDERS OF U.S. TREASURY SECURITIES Billions of Dollars End of November 2004