2. Growth rate of export

China is the largest exporter in the world. Its exports were worth 177.97 Billion USD in August of 2012. Export growth has continued to be a major component supporting China’s rapid economic growth. Exports of goods and services constitute 39.7% of China’s GDP.³ China’s exports are mainly office machines, telecommunication equipment, electrical machinery, apparel and clothing. China exports to the 27-nation European Union, China’s biggest trading partner, United States, Japan and South Korea. Europe’s debt woes and the U.S. recovery has been hurting demand for Chinese goods for the past couple of years.

2. China’s wto accession and benefits from Regional and Bilateral Trade Agreements

China has been a member of WTO since December 11, 2001. A substantial part of China’s accession process involved bilateral negotiations between China and WTO members. The focus of bilateral negotiations was on several areas of China’s trade policies, in particular, specific commitments on services and also schedules of market-access commitments. Since 2001 China has established or is still negotiating over a dozen bilateral and regional Free Trade Agreements (FTAs) with following countries: Chile, Pakistan, New Zealand, Peru, Australia, Iceland, Norway and others. This has the benefit of lowering the landed cost, which improves market access, profitability and competiveness and helps to reduce the custom duties that are assessed on goods when they are imported into the country.

1. US - China bilateral relationship

China is currently US’s 2^nd largest goods trading partner with $503 billion in total (both ways) goods trade during the year of 2011, with estimated imports of more than $411 billion. The US goods and services trade deficit with China reached $282 billion in 2011. China is US’s 3^rd largest goods export market. Top export categories include machinery ($12.2 billion), Grain, Fruit ($10.7 billion), Vehicles and Aircraft. U.S. export to China equaled 7.0% of overall U.S. exports in 2011. Export of agricultural products to China totaled $18.9 billion back in 2011 and is considered to be 2^nd largest U.S. Agricultural export market. U.S. goods trade deficit with China accounted for 41% of overall U.S. goods trade deficit in 2011.

2. US - China investment trade

China has the world’s largest foreign exchange reserve of US $3.2 trillion, dated as of December, 2011. The growth of trade between the U.S. and China has been robust since the establishment of normal diplomatic relations. Today, China and the U.S. are each other’s second-largest trading partner.

China’s direct investments in the U.S. have increased by 53 percent over the past five years, which not only helped the United States to ease the impact of the U.S. debt crisis and create more job opportunities, but also enabled Chinese enterprises to expand to the U.S. market.

China's Trade with the United States, 2001-11 ($ billion)
Notes: *Calculated by USCBC. US exports reported on a free-alongside-ship basis; imports on a general customs-value basis. Source: US Department of Commerce; US International Trade Commission (ITC)
	2001	2002	2003	2004	2005	2006	2007	2008	2009	2010	2011
US exports	19.2	22.1	28.4	34.7	41.8	55.2	65.2	71.5	69.6	91.9	103.9
% change*	18.3	14.7	28.9	22.2	20.5	32.0	18.1	9.5	-2.6	32.1	13.1
US imports	102.3	125.2	152.4	196.7	243.5	287.8	321.5	337.8	296.4	364.9	399.3
% change*	2.2	22.4	21.7	29.1	23.8	18.2	11.7	5.1	-12.3	23.1	9.4
US balance	-83.0	-103.1	-124.0	-162.0	-201.6	-232.5	-256.3	-266.3	-226.8	-273.1	-295.5

3. Foreign Direct Investment Impacts

Foreign Direct Investment (FDI) is a very important element in China’s economic growth in both regional level as well as the national level. After more than two decades of China’s economic reform and open-door policy, enterprises founded by external investment have become an important and the most dynamic part of China’s economy. FDI inflows in China have grown dramatically from a very level in the 1970s to more than US$40 billion a year in the late 1990s. The majority of FDI in China has originated from Hong Kong, Taiwan, Singapore and other neighboring economies (excluding Japan). Investment from western industrial countries like North America and Western Europe has increased steadily throughout the 1990s. In 2000, the U.S. became the 2^nd largest foreign investing country in China (10.8% of the total FDI inflow). As a result, China has become a very important producer and exporter in most manufacturing products and the 13^th largest exporter of chemical products. FDI in China has played an important role in helping China move up the technology ladder.