Record High China Trade Deficit May Not Be All Bad, Some Hidden Benefits, Says UCI Prof


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  • newswise-fullscreen Record High China Trade Deficit May Not Be All Bad, Some Hidden Benefits, Says UCI Prof

    Credit: The Paul Merage School of Business

    Marketing and International Business Professor and Director of the Center for Global Leadership at the UC Irvine Paul Merage School of Business John L. Graham has released his bi-annual analysis on U.S.-China trade following today’s release of U.S. Census Bureau trade data. Graham’s analysis, the 2016 U.S.-China Barometer, measures perhaps the most important relationship between countries in the world.

Marketing and International Business Professor and Director of the Center for Global Leadership at the UC Irvine Paul Merage School of Business John L. Graham will release his bi-annual analysis on U.S.-China trade following today’s release of U.S. Census Bureau trade data. Graham’s analysis titled, 2016 U.S.-China Barometer, measures perhaps the most important relationship between countries in the world and explores both the trade deficit with China and the continued decline in annual U.S. exports to China.

More details of the U.S.-China commercial relationship are outlined in Graham’s analysis, including both the positive and negative impacts of a volatile economy.

High points in the research include:

• Teaming of American and Chinese inventors has resulted in 1681 U.S. patents awarded in 2015 • Chinese are coming to America in exploding numbers for both tourism and education, and they all study English in elementary school • Life expectancy and consumer purchasing power continue to climb in both countries • Internet and mobile phone users continue to grow, and both promote peace and prosperity • Corruption (bribery and IP piracy) is declining in both, if only marginally• The rise in WTO trade disputes (filed and settled) between the two countries reflects a healthy response to the unavoidable frictions between the two largest economies of the world

These improvements are tempered by other factors including:

• Unemployment continues its gentle rise in China • Energy use and the consequent carbon footprints are only marginally declining in the U.S. but burgeoning in China• Military spending in China burgeons while America predominates, both disregard domestic welfare• Chinese holdings of U.S. Treasuries remain breathtakingly high reflecting that country’s short-term commitment to the commercial relationship and U.S. barriers to Chinese FDI• Americans’ travel to China (tourism and education abroad) has stalled• American students’ interest in learning Chinese is stalling as well

Professor John L. Graham is available for comment via email at jgraham@uci.edu or by phone at 949-824-8468.

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