JUL 19 '91 14:30 R.DUFFY Walls & ASSOCIATES
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The United States has been a vital partner in this transformation. Following Congressional approval of the bilateral trade agreement, the United States and China established formal trade relations and reciprocally granted most- favored-nation (MFN) status in 1980. Growth in our commercial ties has helped to change China and to bring it into the global trading system. Since the resumption of normal trade relations, U.S.-China two-way trade has increased almost 770 percent, from $2.3 billion in 1979 to over $20 billion last year.
We are now China's second-largest trading partner and its largest export market.
China is our tenth-largest trade partner, up from fifteenth in 1981.
Over 1,000 U.S. firms have invested more than $4 billion in China and another $5 billion in Hong Kong related primarily to trade with the PRC.
In 1990, the United States exported $4.8 billion worth of goods_to_China, including:
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$749 million worth of aircraft $544 million worth of fertilizer
$512 million worth of grain
$281 million worth of cotton yarn and fabric $273 million worth of chemicals
$264 million worth of electric machinery $238 million worth of wood and wood pulp
$227 million worth of scientific instruments.
Commercial relations with the United States have exerted positive influences on China's business and economic practices since 1980. China has shifted away from total reliance on a strongly centralized economy, shown greater tolerance for experimentation with market mechanisms to regulate its domestic economy, and decentralized and liberalized its foreign trade practices.
Regression in China's Trade Policies
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China's opening to the outside world has not been smooth. the past decade, attempts to accelerate the implementation of market-oriented reforms have been followed by Beijing's recentralization of control, as concern about the country's ballooning trade deficit led Beijing to step in to regain some of the trade authority it had relinquished.
Moreover, throughout the period since the normalization of trade relations and the granting of reciprocal most-favored-nation trading status in 1980, China's web of barriers to imports has made it difficult for many U.S. exporters to gain access to the Chinese market. U.S. firms have also had difficulty securing protection for their intellectual property.