Publications

There is no simple description for the U.S.-China relationship. The two countries are bound together by a thick web of interactions that is growing denser on every level. That is to be expected of two countries with global interests and influence. But strains in bilateral relations are likely to grow in 2008. It is more important than ever that the two countries set realistic expectations for each other and their relationship, and focus on overcoming the mistrust and suspicion that is growing in parallel with increasing interdependence.

Numbers tell the tale of U.S.-China economic interdependence. Two-way trade is projected to hit $390 billion in 2007. As of the end of September 2007, China reported that it held reserves totaling a mind-warping $1.43 trillion, of which U.S. T-Bills amounted to $396.7 billion, and cumulative U.S. investment in China reached $54 billion, through the end of 2005. A shared desire for peace and stability in East Asia provides ample incentive to work together to solve the North Korea nuclear problem and to ensure that tensions in the Taiwan Strait do not get out of hand. The two countries’ economies need stable supplies of energy: that provides a foundation for cooperation when dealing with Iran and the Persian Gulf region. Their reliance on trade is a reason to cooperate to keep sea lines of communication open.