U.S. and China trade. Why does China have more exporting?

Introduction

The most-favored-nation status, given by the United States, is very important in China's run to become the world's strongest nation. China is a sleeping giant that just needs the opportunity to wake up, and China believes that the United States granting them the most-favored-nation status is this opportunity. China has the world's largest population with lots of untapped potential. Opening this enormous market to the United States is very advantageous to both countries if they can cooperate, but it is not easy for two competing world powers with different cultures to work together in harmony.(Delay,198)

Discussion

The United States started the most-favored-nation trade status as a version of the European preferential trade system. The United States first granted most-favored-nation trading status to China in 1979, following the historic efforts of President Nixon during the 1970's to restore diplomatic ties. Historically, there was a big difference that existed between the unconditional most-favored-nation clause in European trade law and the American version of conditional most-favored-nation. Under unconditional most-favored-nation status, one country's extension of tariff concessions guarantees the same concessions to all nations associated with it through commercial treaties. American conditional most-favored-nation status provided treaty signatories only the opportunity to negotiate most-favored-nation status when most-favored-nation status was extended to another trading partner.(Delay,198) Thus meaning that the United States gives significant economic advantages to one nation in the form of most-favored-nation trading status.

China was granted most-favored-nation status in 1979 after lots of debate from the American congress. Some of the Americans did not want China to be granted most-favored-nation status because China was a communist country. The United States also wanted China to improve their current policies. After five years of decision-making, the Americans approved, and most-favored-nation status was given to China.(Morrison,22)

The renewal of China's most-favored-nation trade status has been supported by Chinese liberalization of its own emigration policies. Six hundred and twenty-five thousand Chinese citizens traveled abroad in 1990. In 1990, the Chinese government issued 280,000 new passports for its citizens. During the same time, the United States issued seventeen thousand immigrant visas through consular offices in China, the full number allowed by American immigration law. The problem with Chinese emigration is not that they don't want people to emigrate, but that the other countries didn't want their immigrants. Most-favored-nation status for China continues to provide an incentive for further advancement in this area as well as smoothing out the contacts that the United States established well over a decade ago.

By granting China most-favored-nation trade status the United States has started that long and tedious process of bringing China out of the dark ages.(Faison,14)

In order to live up to the terms of most-favored-nation trade status China has had to become more open to social and economic changes. These reforms included more economic freedom, for easier access to foreign direct investments. These economic developments have lead to China's increasing gross domestic product. From 1979 to 1989 most-favored-nation trade status was directly responsible for an annual ten percent ...