A Study On Co-movement Of Sino-US Economy

America and China both are the biggest economies in the world and havegreat influence on the development of world economy.Meanwhile they haveclose connections.China becomes the biggest trade partner of US instead ofJapan in2008and also the biggest creditor in2009. The financial crisis brokeout in America in2007and soon spread out to other economies, which arousethe world’s financial crisis. Due to the crisis America fell into the economydepression. China was also badly affected. The economy increased speed hadan enormous drop-off. Then what is the connection between America andChina and with which way the economic fluctuation is transmitted and what isthe influence to China with regard to the crisis.These are the questions wewould like to get answers urgently.In this background and circumstance it ispractical and necessar-y to make an probe into the economic connections ofAmerica and China and the characteristics of China in order to find someevidence as reference for future development of China after the financial crisis.The article starts with a retrospection of the literature home and aboardconcerning economy cycle,economy co-movement of America and China andthe crisis influence to China,totally3aspects.Then there is an analysis to thechannel of economy co-movement that is international trade,FDI andinternational capital market with separately transmission mechanism. Next itfocuses on the main channel of co-movement–international trade usingempirical study. According to the results from empirical study it goes further toprobe the ultimate reason of the economy co-movement between America andChina.At the end it analyses the characteristics of Chinese economyfluctuation in this financial storm based on the crisis and the co-movement between America and China.The article is trying to prove the close economy connections betweenAmerica and China using empirical study, logical analysis and facts analysiswith the facts that in recent years China’s foreign exchange reserve andforeign trade dependence degree increased,the economy connectionbetween America and China is becoming more and more stable andconsolidated and the influence on each other is gradually increasing.Furthermore the ultimate reason for the close co-movement exists in thecomplementarity of the economy development mode of the two economies. Onthe one hand The “loan economy” of America releases a strong need to Chinaand other economies in the world. On the other hand China’s export-orientedeconomy supply America and other economies well. Through the crisis we cansee that the capital and merchandise cycle between US and China rely on thecontinuing growth of the US consumption. After the crisis the consumption ofUS will definitely shrink therefore the cycle between US and China will breakdown interiorly. Moreover China has to be forced to change the economydevelopment mode.