2014 ends on positive note for US, China

Economic ties

Henry Levine, a senior adviser at the Washington-based consultancy Albright Stonebridge Group and a former deputy assistant secretary of commerce for Asia, said that the negative impact of China tends to be exaggerated in the US, especially on US-China economic and trade ties.

While imports from China hurt certain US companies and industries, Levine believes the positive impact is more profound. He cites raising the standard of living in the US thanks to inexpensive Chinese goods, and the ability for the US Federal Reserve to keep interest rates low because the goods from China keep down inflation pressure.

"There is a natural political process (in the US) to accentuate the negative and downplay the positive," he told a seminar at the Brookings on Dec 19.

A US-China Business Council survey found that 83 percent of responding members said their operations in China are profitable, a figure consistent with prior years. And 70 percent reported that their China operations were performing better or the same as their overall global operations. Almost three-quarters of US firms increased their revenues in China in 2013 while only 15 percent reported a decrease.

David Dollar, a senior fellow at Brookings, agreed. An expert on Chinese economy and US-China economic relations, he noted that a successful Bilateral Investment Treaty (BIT) will greatly help open the Chinese service industry market to US companies.

The Chinese government hopes that a BIT could help better protect the growing Chinese foreign direct investment in the US, which many Chinese see as subject to unfair and nontransparent review by the Committee on Foreign Investment in the United States (CFIUS), an inter-government agency in the US.

Senior Chinese officials have called for an early conclusion of the BIT negotiations, a move that is widely supported by the business communities in both China and the US.

China and the US are now each other's major trading partners with bilateral trade exceeding $520 billion in 2013. Two-way investment exceeded $100 billion, according to China's Ministry of Commerce.

Many, such as Dollar from Brookings, believe China's reform plan rolled out at the Third Plenum of the 18th Central Committee of the Communist Party of China a year ago will not only inject momentum to a sustainable development of the Chinese economy but benefit US companies with huge opportunities.

Dollar said China's reform agenda is not only good for the Chinese economy, but will also set a good foundation for US-China economic relations.