This paper explores the tension between the economic benefits and ethical challenges of U.S.-China trade relations. It compares China's coordinated government-business economic strategy with the U.S.'s fragmented political landscape, analyzing how China's currency policies, manufacturing dominance, and rapid GDP growth have reshaped global trade dynamics. The paper also examines ethical concerns surrounding child labor, financial reporting practices, and intellectual property violations in China, and considers the long-term consequences for U.S. economic and political power if current trade imbalances are left unaddressed.
China continues to have one of the world's strongest and most resilient economies, achieving a 10.3% Gross Domestic Product (GDP) growth rate in 2010, compared to the world average of 4.2% and the United States' 2.9%. U.S. lawmakers continue to question the $4 million in foreign aid that Congressional budgets are requesting for one of the fastest-growing economies globally (Pennington, 2011). Despite the rationalization that this significant investment is necessary for clean energy primary research, the justification is weak when compared to the many economic challenges and hardships the U.S. continues to face (Pennington, 2011). As of October 2011, the cumulative trade deficit with China stood at $217 billion, down from a high of $270 billion earlier in the year. Arguably, China could more readily afford to provide foreign aid to the U.S., not the other way around.
China has successfully found a strategy of uniting its business development goals with government regulations. China also pursues an aggressive currency strategy that further mitigates risk for its globally-based businesses while stabilizing its domestic economy (Ho & Redfern, 2010). The combined effects of these economic policies have further distanced Chinese manufacturing firms from their global competitors. Many are now so deeply integrated into the world's largest industries that they are essential to producing goods at a cost-effective rate. By taking this highly synchronized approach of aligning business with government initiatives, China has emerged as the next economic superpower.
Meanwhile, the U.S. is slowly becoming balkanized due to partisan politics and an indecisive electorate that has struggled to address the biggest economic crisis the country has seen in nearly seventy years. This dynamic explains why so many Americans own Chinese-made products. Chinese companies that provide manufacturing outsourcing services are regarded as heroes of the Chinese economy because they bring new business into the country. They receive support from the Chinese government and, as a result, are today well-integrated into nearly every industry Americans rely on for products and services. Chinese businesses seek to dominate specific segments of industries and look to their government for capital when they need to expand capacity and facilities (Lawrence & Sun, 2010).
"Labor, piracy, and accounting ethics in bilateral trade"
In fifty years, if the U.S. does nothing, it is feasible that Chinese GDP levels will be five times that of the U.S., signaling a drastic shift in economic and political power globally (Lawrence & Sun, 2010). The dilemma of balancing ethical trade practices with the profitability that comes from engaging with China is unlikely to resolve itself. Without deliberate U.S. policy responses that address both the trade imbalance and the ethical dimensions of this partnership, American economic and political leverage will continue to erode.
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