China and the United States have shared a long and not always pretty history with one another. It was only until recently that the the countries have agreed to lift trade sanctions and to become trading partners. This decision has benefitted both countries massively and has especially helped China to become an economic powerhouse in Asia, but the future of this relationship seems uncertain. “Historically, dominant powers have not readily given up their position of number one to rising challengers.”. The U.S’s economic domination seems to have finally met it’s match.
To first understand the competitive nature between the two countries we need to look into the complex relationship they have shared over the past years. We will first look into the years before the two countries even began to trade with each other. We can trace this back to the 1800’s when China almost a third of the total world manufacturing output, ahead of the West by a tenth of the world total . We can then look at China all the way up past the second world war. Because China was a communist regime for many years after the second world war, the United States refused to have any trade with them. In fact the two countries hardly had any diplomatic relations at all. Then we can look at their relationship from after the Chinese revolution to modern day and find out why these two economic powerhouses have been mutually helping out their economies even before they started trading.
In the 1800’s China was the leading nation in the worlds manufacturing output. They owned almost a third of the worlds manufacturing output up until about 1830 when the west finally surpassed them by a small margin of 1.3% . After that the Chinese economy went into decline while the U.S economy slowly started to rise. Both countries during this time, along with many other countries, still relied heavily on agriculture to sustain their economies, but both countries were starting to feel the effects of the industrial revolution. With both countries industrializing they started looking to trade from other countries to help boost their economies.
At the beginning of the twentieth century the U.S had massive success in trading with foreign countries. For example in 1903 their total of exports and imports was just under 2.5 billion dollars . This was about four times the amount of imports and exports the U.S had in 1850. Post World War era trade became very important to the U.S and it’s value to the global economy was highlighted in word war one. During the time period of world war one the U.S made a good name for themselves. They established military dominance and proved be an economic powerhouse in the early stages of the global economy. However after world war one the U.S was struck by the great depression. The depression crippled the U.S economy causing mass unemployment. The U.S was also hurt during this time through trade. In 1930 U.S exports dropped 25% due to the jacked up prices on agricultural products . However the U.S economy was saved by World War two and mass projects set up by the American government to get people back to work.
During this time period China was starting to grow as a superpower. Because of the attack on the Americans by the Japanese during World War two they actually received economic aid from the U.S and it allies to help attack Japanese owned territories. This was vital in developing China as a major role in the world economy and it also led them to become a communist country.
After world war two ended China and the U.S became rivals. China was emerging as an economic superpower however they did so in a much different form than their western counterparts . China’s resourcefulness and philosophies helped Chinese businesspeople gain a competitive advantage and avoid pitfalls . During the cold war era the communist run China and the U.S had trade sanctions between the two countries, but they still helped each other grow through competition. Both countries were trying to gain the upper hand on each other creating an intense rivalry for economic and military power.
Post cold war era created a new alliance between China and the U.S. Trade sanctions were finally raised and the two countries now benefited not from competition, but through cooperation. “Although our relations with China are still in an early formative stage, we have already seen the fruits of the new policy; U.S-China trade last year was just under $100 million and can be expected to substantially exceed that figure this year.”.
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