Thursday, March 27, 2014
Tweet[IWS] USCC: CHINA'S HUNGER FOR U.S. PLANES AND CARS: ASSESSING THE RISKS [27 March 2014]
IWS Documented News Service
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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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U.S.-China Economic and Security Review Commission (USCC)
USCC Economic Issue Brief, No. 3, 27 March 2014
CHINA'S HUNGER FOR U.S. PLANES AND CARS: ASSESSING THE RISKS
by Iacob Koch-Weser
[full-text, 18 pages]
Key Points
The U.S. trade deficit with China continues to grow but at a slower rate. Part of the reason is the record U.S. exports to China, which reached $122 billion in 2013.
The most dynamic U.S. export has been transportation equipment. Since the global financial crisis, U.S. automotive and aerospace companies have come to rely more heavily on the China market. For example, China doubled its share of Boeing revenues in 2008-2013. One in three GM vehicles is sold in China.
China presents tremendous potential but future demand could be affected by pollution, traffic bottlenecks, and other factors. U.S. companies must also contend with China's industrial policy, which tilts the playing field toward domestic industry by conditioning market access and subsidizing the cost of domestic production.
Manufacturing activity is migrating to China. The problem is mitigated to a degree by strong exports and sales growth. Yet in the long run, technology transfer and off-shoring could erode U.S. competitiveness and take business away from U.S. plants.
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