Chinese market "cash cow" of the US
Since the beginning of the new year, American companies one after the other have proposed their new policies of investing in China. General Electric Company (GE) will invest more than $2 billion to sharpen its research and development in China with several new innovation centers and joint ventures; P&G has announced that they will in five years add another $1 billion in China; Ford Motor Company said they would further expand their production this year; Caterpillar Inc will build new joint ventures to boost their spare parts business in China; Starbucks has confirmed that their coffee shops in China will reach as many as 1,500 by 2015; The Carlyle Group will raise money specially to be used in China.
Intel China is no exception. According to Ge Jun, Executive Director of Intel China, the Chinese government is pushing the integration of the "three nets" (namely, telecom, computer and cable TV networks) and the development of Internet of Things (IoT). This undoubtedly will provide new opportunities to the US IT industry. Since Intel's settlement in China in 1985, China has become its second largest market outside of its homeland.
According to statistics from China's Ministry of Commerce, by the end of 2010, the US had invested in more than 59,000 projects in China with a total of $ 65.22 billion. China is becoming a "money spinner" to US companies. A survey by the Chinese American Chamber of Commerce said that 71% of the US-funded ventures made profits in 2009 and 46% of them gained a higher profit ratio in China than they did in any other country.
Since joining the World Trade Organization (WTO) 10 years ago, all the 100 service institutes China pledged to open have accepted US investment. In areas such as accounting, banking, insurance, security and commerce, US companies are making big money and are running very well.
Currently, China is the second largest trade partner and the top growing export market of the US. According to Chinese Customs, the volume of Sino-US trade in 2010 was $385.34 billion with a nearly 30% annual increase. In 2010, China's import volume from the US was $102.04 billion with an increase of 31.7% year on year.
Looking back, we can be clearer about the surge of US exports to China. According to US Department of Commerce statistics, from 2001 to 2008, US goods exports to China rose from $19.2 billion to $71.5 billion, an increase of 272 percent, while US exports to other countries and regions increased by only 72 percent during the same period. In the service trade, the US has retained a surplus of service exports to China. In 2009, the US had a trade surplus of $7.43 billion, about four times that of 2001.
By enjoying a rapid increase in US exports to China, the US has gained the dividends from China's economic growth. All the states have benefited in real terms, making China appear on the top five export markets list in 40 states out of 50. Over the past 10 years, there has been a 330 percent increase in US machinery and agricultural produce exports to China, far beyond the increase of 29 percent in its exports to other regions of the world. China has become the largest single overseas market of US-produced soybean and cotton as well as an important export market for cars, airplanes and other machinery products. A report from the United States-China Business Council (USCBC) in 2010 said, "China continues to be an important export destination for US manufacturers and farm owners during the global economic recession." Zhou Shijian, a senior researcher with the Center for US-China Relations (CUSCR), Tsinghua University, also acknowledged that without a surge in exports to China, the US President Barack Obama's ambitious plan of doubling US exports over the next five years seems hard to achieve.
The US benefits from trade and economic cooperation with China – from consumers' interests to job opportunities.