US–Chinese Core Economic Relations in the Light of the Current Crisis

US‒China relations have followed an irregular course with improvements overshadowed by various problems and reverses. Chinese economic and trade reforms began in 1979 and have helped to transform the PRC into the one of the world’s fastest growing economies. China’s entry into the World Trade Organization (WTO) at the end of 2001 required it to open up its economy to foreign trade and investment by dismantling a large number of trade barriers and liberalising further its foreign investment regime. Beyond removing trade barriers, economic growth in the PRC has since resulted in significant new opportunities in US‒Chinese economic relations. Unfortunately, economic relations between these two countries have been marked by a number of issues, including a large US trade deficit with the PRC, China’s refusal to float its currency and failure to fully implement many of its WTO obligations. In addition, there has been growing concerns in the US over the huge foreign exchange reserves (FER) China has amassed.