Research On The Causes And Measures Of China-U.S. Trade Imbalance

The volume of trade between China and U.S. keeps on developing with the frequent exchange activities on politics and economy since they established foreign relations. Meanwhile, the trade imbalance is increasingly outstanding. China had taken the place of Japan to have the most trade deficit to U.S. based on the Statistic of the U.S. in 1994, while it was in 2000 by china's data. The trade imbalance has affected the development of the trade relationship, which has been attached importance by the two governments and scholars.Starting with the current situation of the trade imbalance between the two, the thesis analyses the reasons of such large trade imbalance as well as the effects brought by the trade imbalance. Based on the analysis above, the thesis also discusses what policies we should adopt facing with possible unfavorable conditions resulting from trade imbalance.The thesis shows the situation of China-U.S. trade imbalance firstly. The trade imbalance is serious in those years. Then the thesis demonstrates the following reasons of the trade imbalance: the difference in the standard of statistics, the industry transfer in East-Asia, China's advantage in labor cost, the economy imbalance in the U.S. and China, the deficit in goods trade exists along with the surplus in service trade, the direct investment to China by the U.S. and the U.S.'s protection trade policy to China.In the next part, the thesis explains the effects in details. Trade deficit is not always bad, while trade surplus is not always good. On one hand, The China-U.S. trade brings benefits to the U.S., which does good for consumers and the adjustment of industry. On the other hand, the trade surplus makes huge investment cost to China. Finally, the thesis gives the suggestion to reduce the imbalance. China need optimize the industry and export frame, promote domestic economy to be balanced. At the same time, the Chinese government should enhance the communication with U.S. to establish effective negotiation system.