In the condition of globalization, world trade imbalances become the norm. Only countries can do is to control level of imbalance and reach relative balance. At present, China-US trade imbalance level is higher. The basic characteristics are China has trade surplus with the United States of goods and deficit of services and capital investments. In the global industrial chain and the rapid changes in the division system, although the outdated system of international trade in goods services magnified the imbalance statistics, but there are still serious imbalances. Basic condition to achieve the relative China-US trade balance is promotion of goods, free trade in services and investment. If there is no bilateral free trade, it is impossible to achieve the relative balance of trade.

China-US trade imbalance and the consequent break out of the trade friction is a hot issue in recent years. The relationship is vital to both countries;this point is no doubt for both sides. America is China’s most trade partner and biggest export market. China is also major partner of US and fastest developing export market. To concern about trade deflect to China, many American people think the main reason that America keep increasing trade deficit is limits that China Government put forward. If China Government carries out market economy truly, America to China trade export will increase naturally, deficit will also turn to surplus. Actually, we should realize, many reasons cause America to China trade deficit, such as difference in industrial development level, difference in culture, difference in live level, war factors, and trade competition from different countries and areas. It has come into notice that accumulating trade imbalance between China and U.S. Both sides should treat it carefully, because this problem has been an important problem which affects relationship between two countries in a period time of future.

1.Current Situation of China-U.S. trade relationship

There is never absolute balance in trade between countries all over the world, even globalization balanced trade distribution, it’s impossible to form absolute balance pattern which every country is satisfied. International imbalance is a regular form. Import and export increase as deficit increase. So globalization cannot stop trend of imbalance.

Globalization not only fast goods flow but also unprecedentedly increase serve and capital trade. With the change of global demand structure, in property development, ratio of agriculture and industry which depend on land, materials and energy decrease while ratio of serve which depend on knowledge, skills and other labor increase. As anew modulation of global property chain and property division, international capital flow keep increasing scale, capital flow turn from one-way( from developed countries to developing countries) to both-way( not only from developed countries to developing countries, but also from developing countries to developed countries). In this situation, we should not follow traditional mentality to measure whether trade between countries are balance. We should not only see changes of goods flow but also changes of services and capital trade flow.

a.Trade corporation

In 2003, the whole number of China to U.S. export reached to a high level at $92.5 billion, which increased by 77.5% than it was in 2000.The number of U.S. to Canada, Mexico, Japan and Germany growth rate. According to our country’s statistics, total trade number between two countries reached to more than $90 billion in 2003, 18% bigger than it was at the same time in 2002. America has become Chinese second largest trade partner and biggest oversea investment source. Only during January to August, 2002, America established 2086 new joint-stock companies. America to China investment contract value is $7.14 billion, trade investment reach to $3.74 billion, which take 10% part of America to China actual investment. At present, America capital companies have reached 36 thousands in China.

In recent years, China and U.S. become more and more depend on each other. China has become the fastest increasing export company to U.S for continuous 5 years. China will become America’s third largest export company. Trade sum increases from 2.5 billion in 1979 to 262.7 billion in 2006, which increases 100 times. By the end of November 2007, trade sum create new height to 270 billion. America to China investment is also increasing fast.By the end of November 2007, U.S. investment in China set up enterprises more than 54,000, real investment more than $56 billion.Of course, at the same time in the bilateral trade cooperation strengthens unceasingly, frequent trade conflict is an inevitable fact.

b.Trade friction

In recent years, the trade friction is continuously. American took pains to China to put forward various dumping charges and the anti-dumping investigation.Broad scope covered including color television, garlic, pencil, clothing, and furniture, steel and so on many aspects.

Most conspicuous is 2004 May 4, the U.S. international trade committee of China TV anti-dumping case made final decision: China on American TV industry constitutes damage, which basically draw a full stop Lasted nearly a year of color TV anti-dumping case.The U.S. department of commerce confirmed that Chinese TV of dumping range is 4.35% to 78.45%.Be like again: on December 28, 2000, the U.S. international trade committee approved a resolution, to require the U.S. department of commerce investigate anti-dumping product hot-strip from 11 countries and regions including China.According to the statistics, these countries and regions hot-strip exports account for American 2000 hot-strip total imports of 60%.The U.S. international trade committee said thatthe U.S. steel industry substantial impact of damage because China's six steel companies under normal value of hot-rolled steel products exported. Such situation happens many times that we cannot count.China has become most populous country accused by the U.S. proposed dumping.Of course, our country all kinds of export enterprises also had to frequent response to U.S. charges of dumping.

2.China-U.S. trade Imbalance Reasons

With Bilateral trade between China and U.S. deepening, conflict of trade imbalance increasingly obviously.This trade imbalance of conflict is the most direct manifestation of America's trade deficit increased year by year,whichmakes the United States increasingly dissatisfied.According to China's customs statistics,2000 Chinese surplus 297.4 billion dollars, while in 2001 for 281 billion dollars, 2004 for 873 billion dollars, 2005 for 1141.75 billion dollars, 2006 and 2007 is achieved respectively 1442.6 billion dollars and 1633.2 billion dollars.But according to us statistics, 2000 U.S. deficit for "838 billion dollars in 2001, the United States has 831 billion trade deficit of $, 2004, the U.S. trade deficit with China as much as $162 billion in 2005. The breakthrough is $200 billion in 2006, achieve 2325 billion dollars. January 2007 to November, China has reached us trade deficit 2375 billion dollars. Let’s look at the graph

Years\Countries

China Surplus

America Deficit

2000

297.4

838

2001

281

831

2004

873

1620

2005

1141.75

2000

2006

1442.6

2325

2007

1633.2

2375

The above data shows both American and Chinese statistics have very big difference.This is one of the most obvious reasons of the imbalance of China-U.S. trade.

a.China-U.S statistics use different ways.

America's statistics every year are much higher than China's statistics obviously.Thus the American fastening on position of deficit in the bilateral trade is not scientific.China's export product uses an FOB price (FOB) while America uses is F.A.S. s/s price (FAS).According to the World Bank estimates, same batch of goods, FAS price is higher at least one percentage point than FOB price.Thus the American exports to China should at least adjustable up 1% to calculate.If the United States wants true statistics, must be in uniform standard to compute the problem that practical reliable data.When America emphasis on trade deficit continuously, it should recognize that consistent statistical standards cannot reflect the actual status of the bilateral trade.American always consistently pushes the responsibility to China, accusing China of dumping products, is irresponsible unfair.If this situation continues, the China-U.S. trade friction will inevitably become very serious.The United States should be clearly understood this kind of situation and improve this kind of unscientific statistics. The essential trade figures behind hidden the reason mainly reflects in:(1) the industrial transfer in the Asia-Pacific region, China has undertaken the Asia-Pacific region of beauty trade surplus, (2) foreign direct investment and trade development within the company covers book trade essence; (3) Chinese processing trade develop rapidly; (4) the United States to China implements export control intensifies the U.S. trade deficit with China.

b.Trade in services was not counted.

China's trade surplus mainly happened in trade in goods, but deficit in service trade.The unreasonable structure will affect the healthy development of our country's trade.In 2004, U.S. service trade grows 11% of total export, which grows 20% to China. China has become the first ten service export market.In fact, America's trade in service to China is in surplus status.

Nowadays, with the improvement of China's service industries, service trade will become the new focus of foreign trade.At the same time with the United States for more service activities and trade is also an important event of fashion, which produces service trade in nature not omit bilateral trade is an important part.In the attention in a trade deficit position cannot merely statistical goods trade, certainly also should count China's service trade.

First, facing the global industrial structure and global market pattern changes,America has not initiative adjusted outdated trade strategy and policy, promoting "export protectionism" and "market limit doctrine", to limit energy and resources, and high-end technology and technological products export,and even continue to take some against WTO spirit of discriminatory measures and banning to China.Doing so cause a direct result which let those policies elastic bigger countries such as Germany can obtain more exports to China, a part of U.S. exports will be attained to countries such as Germany, this will no doubt produce "extrusion effect" on American competition to reduce America's export opportunities.

Second, to face globalization, the United States fear to compete with poor countries, improving access standards and improve the foreign enterprise cost, to weaken the foreign enterprise competitiveness. For example, in energy, aviation, agriculture and advanced manufacturing fields, the United States to foreign especially China capital restrictions is unabated. The result can reduce export commodities, making U.S. lowered relative density in global exports total scale.

Third, fed executes the dilatability monetary policy to lower interest rates and excess liquidity in a comparatively long period, which factitious caused U.S. asset appreciation and "wealth effect". Under the situation of very low loan interest rate, rational Americans would certainly consume in card extensively. Under the situation of very low fiscal bond funds rate, the ministry finance may not add restraint issue bonds to meet the pentagon spending needs. The United States middle or low level industry appear hollow background, which result necessarily American consumer goods and public investment demand to expand unrestrictedly. Many of them should rely on imports to meet.

Fourth, the United States excess issued dollar bill to buy and hoarding much oil and other scarce supplies of high degree, which intensifies the inside and outside imbalance. In recent years, the United States and global markets exist a major cycles: American petroleum reserves increase - global oil prices go up- U.S. hoard more oil... Petroleum reserve constant increase as oil price will spend more and more dollars to make America imports increased significantly.

Fifth, unconscionably foreign wars and global expansion makes U.S. government public expenditure unceasing increasing. In 2004 the federal deficit reached four hundred thirteen billion dollars, last year it still as high as 2482 billion dollars.The government public expenditure expansion will necessarily causes public demand in the domestic inflation, in the condition of certain growth of general public goods supply, only rely on the import to expand the supply and demand can fill the gap of foreign trade deficit.

c.U.S. investment in China is also one of reasons.

Reformation liberated China's Labor to make Chinese products have competitive advantage in international. America's competitive advantage is embodied in the high-tech products. American not only limits high-tech exports, but also hopes to gain a trade surplus.

America was once a global manufacturing the largest country, but in recent decades, the total economy more than 80% into service, financial services is in the American-dominated financial liberalization of rapid development, even in manufacture for this gm also tried to increase profitability through financial tools. Meanwhile, the U.S. manufacture contributions to economic continue to shrink, and with global industrial division adjustment appeared hollow industry.

China has large population where labor is relatively cheap.Clever Americans use China resources superiority to put money into China market which engaged in processing, assembling, and then resell product to the United States and other countries.So the United States not only reduced production cost but also got high rates of return.Although it seemingly exported from China, the United States get profits higher than China got.

Some American enterprise directly axed products to China local sales to replace the way by American exports. This also decreases relatively direct export to China.Of course the result is also American got great interests.

d.American strict control of its exports of high-tech products.

China-American export trade should subject to their comparative advantage. The United States is in the international leading level in science and technology, military, medicine and many high technologies. Our country in these areas and the United States, there is still a gap. So we need to import U.S. these comparative advantage products. But the United States for some reason for China, the strict control of high-tech products export. So, the United States its comparative advantage (that holds the many high-tech) cannot play in China, can export commodities species less, exports nature also cannot raise, will also causes trade imbalance certainly.

Does American exactly have trade protectionism? U.S. government officials insisted that America has no trade protectionism. But the United States some people also admitted that they have little protectionism. A too Nobel Prize of American economists said the United States is now on mild protectionism, but not enough to a more powerful protectionism. Personally, I think the United States in financial crisis later is a protectionist instincts of, for instance, in China has launched the types safeguard case. Although global speaking, in international trade protectionism is generally in a controllable stage, but some people in the United States recently in some problems on creating momentum, may make the protectionism increasingly fierce, the United States, about China and global are very harmful.

e.American consumption mode influence.

America is a consumer society, the national requirements of consumption greatly. In the United States itself cannot satisfy the production people's consumption, not only need import a lot of foreign goods, a large number of import and export of extreme control certain will result is the trade deficit. For excessive imports caused by the trade imbalance, American should not only the mistakes boils down to China. America should start from changing internal cause, on the one hand, to control its national extreme consumption demand, On the other hand, tried to expand domestic productive forces and improving domestic production levels to meet the national consumer needs. So it can at least reduce America's amount of imported parts to reduce the U.S. trade deficit level with China.

3.What China should adopt the countermeasures to face the trade imbalance?

a.In the current stage, although China-U.S. trade friction constantly, but China-U.S. trade still important. The United States is the largest exporter, China's exports mainly still attached to America's massive imports. Therefore, China's export trade by American influence degree is high. China's enterprises should in facing the U.S. market opening at the same time, effort to develop outside of the United States to other countries and regions. By today's world economic globalization, carry out the influence of different areas and the state's economic exchanges and cooperation is an inevitable trend. For example the EU, Japan, Southeast Asia country, etc. Will become our good trading partners. In the original export U.S. trade to turn to other countries at the same time, the corresponding narrowing of the United States exports. This can relatively slow China-U.S. trade the imbalance.

b.Aimed at the United States with China in the export of high-tech products strict control, our country should try to get rid of dependence on the United States. Have to admit that the United States in leading technology has its own unique advantages. But the United States does not make use of the other countries do not have advantage, but to our country implemented strict high-tech exports control. So we only by effort to develop their own high-tech products, As far as possible in various fields reached the leading level of the world. So, on the one hand, our country has its own high-tech products, need not rely on USA. On the other hand, the U.S. and China in more technical exchanges and cooperation.

c.In recent years, China's services showing a scale gradually increasing trend. Therefore our country develop and expand trade in services is the needs of the development of The Times. In 2005, world trade in services on the BBS, bo xilai pointed out that in the future, the country needs like attention goods trade so much emphasis on the development of service trade. The Chinese government will pay more attention to and actively promote the services and the development of service trade, and the service sector, as the next round of opening the focal point, speed up the domestic services development, improve the ability of carry on international services transfer, China has become a global service outsourcing important base, through the communication with different countries in the world and cooperation and jointly promote world trade in service and the economic development of the world. Thus, the service industry will become China to attract more foreign investment, to strengthen trade cooperation with other countries on the company to conduct the important fields. And if the China-U.S. trade in services in the smooth development, our country introducing the services sector investment (such as insurance, finance, tourism, etc.) can also relatively reduce America's trade deficit. If the United States the bilateral trade imbalance, the reason simply push to each other and ignoring their own internal, not value control of their excessive consumption and excessive imports of desire, no efforts to expand the market opening up and increased exports, not only to the other party not fair, and it also causes trade imbalance is more serious. Therefore, solving the imbalance of China-U.S. trade is the best way is to eliminate mutual these problems of factors, in bilateral market jointly promote free trade.

Trade dispute on China-U.S. are of no profit

Both sides should earnestly implement the President Hu Jintao and Obama President about construction actively comprehensive cooperation in the 21st century the China-U.S. relations consensus. Encounter problems, everyone stay calm. China-U.S. mutual dependence also cannot leave. We don't want because these problems affect relations between the two countries. If some us senators insisted that for China to impose a currency manipulation by name, and in the name of China implements, really punitive tariffs on imports, the Chinese government was not may not respond.

We hope that doesn't happen, if really happen, any good for world. China has a stable exchange rate for most underdeveloped countries and emerging countries economic development is very important. After years of effort, China now export structure and those less developed countries have misplaced, Chinese imports are valuable to them.

If really because the exchange rate problems start a game "trade war", actually I don't want to use the word "trade war", but recently in the U.S. media we do see a similar expression, of course, China will suffer losses, but the American enterprise loss is the largest. China's export enterprise has plenty of is American enterprise, once the bilateral trade environment change, they first be affected.

Bilateral trade in on-and-off way forward. Of course we must clearly see the real cause trade imbalance of a variety of reasons. America should not take liability imposed on China. Actually, our government to cut China-U.S. trade imbalance efforts, it is obvious to all. Our efforts to achieve in WTO made the promise. For instance in before 1 July 2006 cancel automobile import tariffs. Also, appropriate magnifies the RMB exchange rate of floating space. American to these efforts should understand somewhat. Because the bilateral trade relationship for both plays a vital role, both sides should be in line with the principle of mutual benefit and common development of bilateral trade in order to achieve win-win purpose.