BEIJING (Reuters) - China is appealing a World Trade Organization ruling against its restrictions on imported films, books and other audio visual materials, adding to sparring following the United States’ imposition of safeguard tariffs on Chinese-made tires earlier this month.
With the two giant economies joined at the hip, the U.S.-China relationship is unlikely to unravel over any single product.
Just a quarter century ago, “Made in China” products accounted for less than 1 percent of U.S. imports.
Now, China’s high rate of savings are used to buy U.S. Treasuries, allowing Americans to keep buying Chinese-made exports. That in turn has driven tremendous economic growth in China and lifted hundreds of millions of Chinese out of poverty.
China is now the largest holder of U.S. government debt, while the United States is China’s second-biggest trade partner.
The intimate relationship between the two economies has marched in step with China’s opening up to the outside world over the last three decades.
By 2008, U.S. exports to China totaled $69.7 billion, but were dwarfed by $337.8 billion in exports from China to the United States.
The U.S. trade deficit with China has steadily grown since 1985, when its exports to China were worth $3.86 billion, just $6 million less than the value of Chinese shipments to the United States. Bilateral trade was less than $2.5 billion in 1979.
China held $776.4 billion in U.S. Treasuries at end-June, displacing Japan in September 2008 as the largest foreign holder.
Beijing is concerned the value of its dollar holdings could be eroded by massive debt issuances to fund the U.S. stimulus.
According to the 2000 census, 1.19 million people living in the United States were born in China. About half had become U.S. citizens.
As recently as the early 1990s, foreign direct investment accounted for less than 5 percent of total investment in China.
Foreign invested firms in China now employ more people than do China’s state-owned and collective enterprises.
Since the joint-venture heyday of the 1990s, U.S. non-financial FDI in its trading partner has slid, accounting for 3.2 percent of utilized FDI in 2008, versus 10.5 percent in 1999.
Utilized FDI from the U.S. slipped to $2.9 billion in 2008, down from $4.2 billion in 1999, even as overall FDI in China nearly doubled to $92.4 billion last year.
China encourages its firms to “go out” and invest overseas, particularly in natural resources — but ran up against national concerns when China’s CNOOC tried to buy U.S. oil firm Unocal.
Chinese non-financial direct overseas investment leapt to $40.65 billion in 2008, almost half of the investment coming in. Compare that with $6.92 billion in outbound investment in 2005, or about one-tenth of the investment into China in that year.
China and the U.S. meet regularly through what is now known as the Strategic and Economic Dialogue.
The two countries sit on the United Nations Security Council.
They are key players in the six-party talks over North Korea, and the U.S. is seeking China’s cooperation over Iran.
China has become an enthusiastic participant in the World Trade Organization.
Sources: American Chamber of Commerce 2009 White Paper; U.S. Census Bureau; The U.S. China Business Council; Chinese Ministry of Commerce; American Chamber of Commerce China Brief.
Reporting by Lucy Hornby; Editing by Alex Richardson