Examining the Trade Imbalance between the United States and China
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Since Deng Xiaoping instituted economic reforms and trade liberalization in 1978, China has quickly risen to become the world's third largest economy, including the European Union. China has a gross domestic product (GDP), the market value of all final goods and services from a nation in a given year, of $4.909 trillion and has sustained an average growth of 9.5% per year. The relationship between the U.S. and China is one of the most discussed issues in today's world, and at the center of this relationship are the strong economic ties that each country has with one another. In 2009, trade between the U.S. and China was over $365 billion, which makes China the U.S.' largest trading partner. However this trade relationship is unbalanced, as the U.S. has an extremely large trade deficit with China. In 2009, the U.S. trade deficit with China was measured at over $226 billion and the U.S. overall trade deficit with the entire world was measured at $501 billion. Since China accounts for almost half the U.S.' trade deficit, it is important to understand the trade relationship that the U.S. has with China. In order to understand this, one must first look at China's economy and view trade data that China has with the world and the U.S .. After, the reader will be able to view details of the issues that cause problems with the trade relationship between the U.S. and China. Finally, the reader will see the benefits of the trade relationship that the U.S. has with China. In the end, the reader should be able to draw a conclusion that the U.S.' trade relationship with China is beneficial to both parties.