Talking Points:

  • The key issue of US-China trade tensions is how quickly China is moving towards a market-oriented economy.
  • 2006 was a turning point for trade relations when the US believed China’s market liberalization slowed.
  • Measures introduced by China between 2016 and 2017 rekindled concerns by the US, landing us in the situation we find the two countries in today.

    • The Fundamental Question Underpinning US-China Trade

    Even since US President Richard Nixon visited China in 1972, the US and China have had a long history of trade disputes. More recently, since 2001 when China became member of the World Trade Organization (WTO), the US and its Western allies have been pressuring China to reform its trade regime, a process known as trade liberalization.

    In particular, the US has pushed for liberalization in areas such as intellectual property rights, industrial policies, agriculture practices and legal framework; much of these efforts are still on-going today. The fundamental underlying issue that divides the two countries is the process and speed by which China moves from a state-led economy to a market-oriented economy.

    Category

    Issue

    From When

    Industrial Policies

    Investment Restrictions

    2001

    Made in China 2025

    2015

     

    Indigenous Innovation

    ~2007

     

    Technology Transfer

    Mid-2000s

     

    Information and Communications Technology Policies

    2014

     

    Subsidies

    2001

     

    Excess Capacity

    (i.e. steel, aluminum)

    Mid-2000s

     

    Export Restraints

    (i.e. rare earths)

    ~2006

    Intellectual Property Rights

    Intellectual Property Rights

    (i.e. law, enforcement)

    2001

    Services

    Electronic Payment Services

    ~2010

    Financial Services

    (i.e. banking, insurance)

    2001

    Agriculture

    Beef, Poultry and Pork

    ~2006

    Biotechnology regulation

    2001

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