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181. Trade Disputes Between China and the United States: Growing Pains so Far, Worse Ahead?

Author:
Gary Clyde Hufbauer and Jared C. Woollacott
Publication Date:
12-2010
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This study covers the history of Sino-US trade relations with a particular focus on the past decade, during which time each has been a member of the World Trade Organization (WTO). Providing a brief history of 19th and 20th century economic relations, this paper examines in detail the trade disputes that have arisen between China and the United States over the past decade, giving dollar estimates for the trade flows at issue. Each country has partaken in their share of protectionist measures, however, US measures have been characteristically defensive, protecting declining industries, while Chinese measures have been characteristically offensive, promoting nascent industries. We also cover administrative and legislation actions within each country that have yet to be the subject of formal complaint at the WTO. This includes an original and comprehensive quantitative summary of US Section 337 intellectual property rights cases. While we view the frictions in Sino-US trade a logical consequence of the rapid increase in flows between the two countries, we caution that each country work within the WTO framework and respect any adverse decisions it delivers so that a protracted protectionist conflict does not emerge. We see the current currency battle as one potential catalyst for such conflict if US and Chinese policymakers fail to manage it judiciously.
Topic:
Economics, International Trade and Finance, Markets, and Bilateral Relations
Political Geography:
United States and China

182. Kim Jong-il’s Visit to China and Its Implications

Author:
Dong Ryul Lee
Publication Date:
06-2010
Content Type:
Working Paper
Institution:
East Asia Institute (EAI)
Abstract:
The North Korean leader Kim Jong-il embarked on a secretive trip to China on May 3, 2010. The five day visit was his first to China in four years and his fifth so far. Kim’s recent visit to China does not seem to be that much different from previous summit meetings between North Korea and China. Although North Korea’s nuclear test in 2009 did not provoke a longer than normal suspension in bilateral exchanges, in essence, progress has been made since the resumption of bilateral diplomatic visits in 2000. The key agenda of the recent summit has been consistent with the principle in which China provides economic assistance in exchange for North Korea’s return to the Six-Party Talks. This principle has been the backbone of Beijing’s North Korea policy, which has been in place since the outbreak of the second nuclear crisis on the Korean Peninsula in 2003. Furthermore, this secretive trip to China looks very similar to Kim Jong-il’s last four visits to China, where he toured the industrial regions that have benefited from China’s economic reform and opening. There has been a lot of controversy and diverse assumptions on the reason for Kim’s visit to China. This is particularly attributable to the complicated and delicate nature of inter-Korean relations even though this China-DPRK summit shares many similarities with those of the past. Therefore, it is necessary to understand the political and security environment of the Korean Peninsula in which Kim Jong-il decided to make such a critical strategic decision to travel to China. The visit and the resulting bilateral summit were a successful conclusion to the longest gap in China-DPRK relations since the revival of bilateral ties at the beginning of 2000. Similarly, this summit carries special meaning considering the current deadlock of the Six-Party Talks that has gone on for the past eighteen months. What is more significant is the fact that Kim Jong-il’s trip immediately followed South Korean President Lee Myung-bak’s official visit to China on April 30, amid the escalating tensions in inter-Korean relations over the North Korean torpedo attack on the Cheonan. Moreover, North Korea is facing dire domestic circumstances primarily caused by the health problems of Kim Jong-il, the succession issue, instability following the disastrous currency reform of late 2009, and its failing economy struggling under United Nations sanctions. The fact that the China-DPRK summit took place in such a complex environment indicates that a wide range of current issues were involved and it would have a greater impact for stability on the Korean Peninsula. North Korea’s actions immediately following the bilateral summit with China should be closely examined as it could help South Korea predict how the Cheonan incident will develop. There were no official reports or any specific details of the conversation available for the public due to the opaque nature of the talk. Therefore, it is necessary to scrutinize as well as analyze any subtle moves by both countries that might reflect any possible major agreements between the two sides. There are three major questions that need to be answered when evaluating this recent summit in China. First, what is the significance of the summit regarding China-DPRK relations and Beijing’s policy toward North Korea? Second, did North Korea and China agree on the North’s return to the Six-Party Talks in exchange for Chinese support for its regime? If so, what is the prospect for the resumption of the Six-Party Talks? Third, what impact will this summit have on ROK-China relations in light of the fact that the summit meeting took place while the South Korean-led international investigation into the cause of the Cheonan sinking was in progress?
Topic:
Foreign Policy, Regional Cooperation, Bilateral Relations, and Economic Cooperation
Political Geography:
China, Asia, and North Korea

183. The Real Bridge to Nowhere: China's Foiled North Korea Strategy

Author:
Drew Thompson and Carla Freeman
Publication Date:
05-2009
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
On January 1, 2009, Chinese President Hu Jintao and North Korean leader Kim Jong Il exchanged greetings and declared 2009 the “year of China-DPRK friendship,” marking 60 years of diplomatic relations between the two countries. Despite pledges to deepen cooperation and promote exchanges, however, the New Year began with the China-North Korean border closed and pervasive uncertainty about Kim's health and the political stability of the DPRK. For Beijing, Pyongyang's behavior and renewed tensions between the two Koreas raise its concerns about the prospects for broader regional conflict. It also sees developments on the peninsula as they may affect its own territory should instability in the DPRK spill into Northeast China. It is Kim Jong Il's failure to reform the North Korean economy and take measures to institute a succession process to enhance political predictability in the country that are a source of anxiety both among senior leaders in Beijing and local leaders in areas along the DPRK border. Nowhere is the uncertainty about North Korea's future more acutely felt than in China's border region with North Korea, and there are few places where these concerns are closer to home than in Jilin Province's Yanbian Korean Autonomous Prefecture. With more than 800,000 Chinese-Koreans and a 522 km long land border with North Korea, Yanbian is likely to bear the brunt of failures in China's policies toward its difficult neighbor.
Topic:
Foreign Policy and Bilateral Relations
Political Geography:
China, Asia, and North Korea

184. China-US Relations, Tending Towards Maturity

Author:
Huang Ping, Tao Wenzhao, Wang Rongjun, Yuan Zheng, and Zhao Xingshu
Publication Date:
06-2009
Content Type:
Journal Article
Journal:
The International Spectator
Institution:
Istituto Affari Internazionali
Abstract:
The China-US relationship is one of the most important bilateral relationships in the world, and it is progressively maturing. Non-traditional security threats are expanding the shared interests of China and the US. The two countries have developed more realistic views of each other than they had decades ago, and this is making military relations more practical. The two are also interdependent in the economic realm, whether they like it or not, and therefore must work together to succeed in handling the current economic crisis. Connected to this economic challenge is that of climate change, an issue which the US must handle wisely in its relations with China. In addition, traditional security and peace issues will remain important, some even sensitive and difficult, in relations in the near future. The better relationship which China and the US are moving towards will contribute substantially not only to bilateral relations but also to global peace and order.
Topic:
Security and Bilateral Relations
Political Geography:
United States and China

185. A Rejoinder: Building 'Positive, Cooperative and Comprehensive' China-US Relations

Author:
Ralph A. Cossa
Publication Date:
06-2009
Content Type:
Journal Article
Journal:
The International Spectator
Institution:
Istituto Affari Internazionali
Abstract:
The US-China relationship is one of the most important bilateral relationships in the world. As two of the world's largest economies, there can be no solution to the global economic crisis if the two work at cross purposes and many of the region's most complex security challenges - North Korean denuclearisation first among them - require Sino-US cooperation. The good news is that both US President Barrack Obama and Chinese President Hu Jintao are aware of and accept the shared responsibility and necessity for a cooperative approach toward dealing with the global financial crisis and regional security challenges; both have pledged to develop a "positive, cooperative and comprehensive" relationship and build mutual trust in a way that encourages, rather than worries, friends and allies in the Asia Pacific.
Topic:
Bilateral Relations
Political Geography:
United States, China, and North Korea

186. Improving U.S.-China Relations: The Next Steps

Author:
Richard N. Rosecrance
Publication Date:
09-2009
Content Type:
Policy Brief
Institution:
Belfer Center for Science and International Affairs, Harvard University
Abstract:
A higher Renminbi will have two advantages: for the United States, it will help to equilibrate the past trade imbalance; for China, it will stimulate consumption (and enhance imports). It will therefore help China switch from a purely exporting strategy to one that maintains domestic growth through internal consumption. The goods that were to be sent abroad can now be consumed by an increasingly middle class nation at home. These steps will bring China and the United States closer economically and increase international stability. However, unless the military-security relations of the two countries improve, this will not be a sufficient remedy for the two nations' long term problems.
Topic:
International Political Economy, International Trade and Finance, and Bilateral Relations
Political Geography:
United States, China, and Germany

187. The United States and India 3.0: Cave! Hic Dragones

Author:
Ashley J. Tellis
Publication Date:
10-2009
Content Type:
Policy Brief
Institution:
Carnegie Endowment for International Peace
Abstract:
The United States and India share the fundamental objective of preserving an Asia that is peaceful, prosperous, and free. Without security, India's meteoric rise cannot continue. While New Delhi can manage Pakistan, its longtime regional adversary, it will have more difficulty confronting the challenges posed by a rising China. As a result, India will continue to depend on the United States to preserve order in Asia until it can protect its own interests there.
Topic:
Ethnic Conflict, Terrorism, Power Politics, and Bilateral Relations
Political Geography:
Pakistan, United States, China, India, and Asia

188. Shades of Red: China's Debate over North Korea

Publication Date:
11-2009
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Pyongyang's latest round of provocations has prompted Beijing to reconsider its North Korea policy. A rocket launch, the withdrawal from the Six-Party Talks, and the 25 May nuclear test all deepened doubts in China about its policies towards its neighbour. This series of escalating gestures coincided with reports that Kim Jong-il was seriously ill, which set in train succession plans. Together, the nuclear tensions and succession worries drew out an unusually public, and critical, discussion in China about its ties with North Korea. The debate took place between those proposing a stronger line against North Korea (“strategists”) and others advocating the continuation of substantial political and economic cover for China's traditional ally (“traditionalists”). Beijing ultimately supported a strongly worded UN Security Council presidential statement and a resolution mandating a substantial sanctions regime, albeit one focused on missile and defence programs that would not destabilise the economy. Although many in the West have pointed to this debate as a sign of a policy shift, Beijing's strategic calculations remain unchanged. As one high-level Chinese diplomat said, “Our mindset has changed, but the length of our border has not”. North Korea's attempted satellite launch and nuclear test generated significant domestic and international pressure on Beijing, while its withdrawal from the Six-Party Talks stripped China of its primary strategy for dealing with the nuclear crisis. Chinese policymakers began to question whether North Korea's nuclear ambitions and desire for recognition as a nuclear power by the international community were in fact negotiable. Beijing was angered by the latest escalation and was ready to reprimand the North, but in a controlled way that would protect Chinese interests.
Topic:
Foreign Policy, Communism, and Bilateral Relations
Political Geography:
China, Asia, and North Korea

189. China-Korea Relations

Author:
Scott Snyder and See-Won Byun
Publication Date:
04-2009
Content Type:
Journal Article
Journal:
Comparative Connections
Institution:
Center for Strategic and International Studies
Abstract:
Top-level diplomacy between Beijing and Pyongyang intensified this quarter in honor of China-DPRK Friendship Year and the 60th anniversary of diplomatic relations. Prior to the Lunar New Year holiday in mid-January, Kim Jong-il held his first public meeting since his reported illness with Chinese Communist Party International Liaison Department Head Wang Jiarui. In March, DPRK Prime Minister Kim Yong-il paid a return visit to Beijing. The Chinese have accompanied these commemorative meetings with active diplomatic interaction with the U.S., South Korea, and Japan focused on how to respond to North Korea's launch of a multi-stage rocket. Thus, China finds itself under pressure to dissuade Pyongyang from destabilizing activity and ease regional tensions while retaining its 60-year friendship with the North. Meanwhile, South Korean concerns about China's rise are no longer confined to issues of economic competitiveness; the Korea Institute for Defense Analysis has produced its first public assessment of the implications of China's rising economic capabilities for South Korea's long-term security policies. The response to North Korea's rocket launch also highlights differences in the respective near-term positions of Seoul and Beijing. Following years of expanding bilateral trade and investment ties, the global financial crisis provides new challenges for Sino-ROK economic relations: how to manage the fallout from a potential decline in bilateral trade and the possibility that domestic burdens will spill over and create new strains in the relationship.
Topic:
Bilateral Relations
Political Geography:
United States, Japan, China, Beijing, South Korea, North Korea, Korea, and Pyongyang

190. China-Korea Relations Chronology

Publication Date:
04-2009
Content Type:
Journal Article
Journal:
Comparative Connections
Institution:
Center for Strategic and International Studies
Abstract:
Jan. 1, 2009: Hu Jintao and Kim Jong-il exchange New Year messages and pledge closer China-DPRK ties. Jan. 2, 2009: ROK Ministry of Strategy and Finance says South Korea will implement anti-dumping duties on Chinese and Taiwanese polyester yarn for the next three years. Jan. 5, 2009: ROK Unification Ministry says the current slowdown in North Korean defectors to South Korea is partly due to tightened border controls in China. Jan. 5, 2009: SAIC injects $45 million into Ssangyong and resumes negotiations with Korea Development Bank over a possible restructuring plan. Jan. 7, 2009: The Korea Center for Disease Control and Prevention heightens bird flu warnings after a teenager in Beijing is suspected of dying from the virus on Jan. 6. Jan. 9, 2009: China's Assistant Foreign Minister Hu Zhengyue visits Pyongyang to discuss 60th anniversary-related exchanges. Jan. 9, 2009: Ssangyong Motor Co. files for court protection from creditors. The board reconvenes in Shanghai to finalize restructuring plans. Jan. 9-12, 2009: A Chinese Foreign Ministry delegation visits Pyongyang for 60th anniversary celebrations of China-DPRK diplomatic relations. Jan. 11, 2009: The North Korean consulate general in Shenyang opens its branch office in Dandong city bordering North Korea.
Topic:
Bilateral Relations
Political Geography:
China and Korea