The Study On U.S. Countervailing Actions Against China

Sino-US trade developed rapidly after China entered into WTO. China has been the second largest trading partners of U.S. since 2006 and U.S. has also been the second largest trading partners and the first largest export destination of China. While economy and trade relations become more and more close, the trade disputes between two countries increase. China and U.S. has intense frictions on RMB exchange rate, anti-dumping, special safeguard and intellectual property. U.S. didn't initiate countervailing investigations against China until March 2007 because U.S. has always treated China as a Non-Market Economy Country. Coated paper case was just a start of U.S. countervailing actions against China with twelve cases following up within two years. Countervailing measures has become commonly used protection weapons of U.S. to curb the fast growth of import from China.After analyzing subsidies and countervailing from both theory and economic effects, the thesis overviews U.S. countervailing system and show the institutional evolution by representative cases. Further, the paper points out that economy factors and political factors can account for attitudes change of U.S. government. Economic reasons include single export structure and high market concentration for our own and huge deficit with China and a sunset industry protection for America. In addition, the United States countervailing policy change has direct relations with election politics, the Democratic Party control of Congress and interest groups' lobbying. The analysis of current situation China needs to face and the suggestions of coping strategies for government, industry organizations and corporations is the last part of the paper.