China-United States trade and its development

This paper reviews China's foreign trade development during the past 15 years in three critical areas (1) decentralization of decision-making process in foreign trade, (2) reforms in the pricing of traded goods, and (3) abandonment of an over-valued exchange rate. The paper also discusses China's current trade obstacles in the areas of policy transparency, trade quotas, technical barriers, and the measures that were taken place in the trade negotiations between China and the United States. By utilizing the structural change economic development model, this paper analyzes the significance of China's economic reforms which is transforming the economy into a market-oriented system. The pros and cons of free trade are examined. A government-involved foreign trade policy is advocated. The advantages of extending GATT to China are investigated and the benefits and limits of joining GATT are evaluated. The paper criticizes the opinions of linking MFN status with human rights and recommends consultation and cooperation in improving trade development between the two countries.