Why the U.S. and China Are Reliant On Each Other

The relationship between the U.S. and China is frequently framed in purely antagonistic terms, but the truth is far more complicated. Zero sum games in modern economics are exceedingly rare, and as two of the most dominant industrial superpowers in the world, stronger economic relations could be a boon to the people of both nations. But rhetoric from President Trump and strong pushes towards embargoes could explode into a full-scale trade war.

Despite the bellicose language and actions of Trump, China seems largely open to a healthier trade relationship, suggesting that Òa community of shared future for humanityÓ could lead to mutually beneficial results. Many economists seem to agree, pointing out the distinct similarities between the economies of the two nations. Even as America becomes a hot bed for some of the most profitable and innovative startups in the world, China’s economy is developing at unprecedented rates. The private sector constitutes 60% of the nation’s gross domestic product, and 80% of jobs, and it’s managed to find much of this success by following the American model. The tech sector in China is growing at a precipitous rate, and it’s done so by following the model of maverick American tech darlings. Their successes have been promising enough to draw venture capital from major U.S. investors.

And while this may make China seem to be a direct competitor on a superficial level, the market is large enough to support a healthy economy for both nations. Over 1% of the U.S. GDP in 2015 came from exports to China, totaling $165 billion. There’s little doubt that a cold war between these two countries would hurt American entrepreneurs where it hurts. And while the flood of products on American shores with the “Made in China” stamp may draw the ire of many Americans, the real story is far more complex. 80% of American products made in China are sold there as well. While it’s true that America’s manufacturing industry is in decline while China’s is rising, that’s a simple factor of shifting priorities. As China develops rapidly into a more industrialized nation, America is focusing its attentions less on manufacturing and more in digital spaces. The U.S. needs a partner to put its big ideas into action, like the partnership suggested by CUSEF, and there’s no bigger market around than China. While it may be easy to shift the blame for economic trends to other countries, it would be of benefit to both Americans and Chinese to stay come and try their hardest to bridge the gaps that have developed between the two countries.5 Reasons Why the U.S.’s Relationship with China is Getting Better