I. China-US Economic and Trade Relations Are Mutually Beneficial and Win-Win in Nature

Since the establishment of diplomatic relations between China and the US, the two sides have achieved fruitful outcomes in bilateral trade and investment cooperation, realizing complementarity and mutual benefits. China and the US share extensive common interests and vast potential for cooperation. Maintaining the stable development of China-US economic and trade relations is in the fundamental interest of both nations and peoples, which is also conducive to global economic development. The fact shows that cooperation between China and the US benefits both sides, while confrontation harms both. Cooperation is essential to mutual benefits and win-win outcomes.

1. China and the US Are Important Partners of Trade in Goods

China-US two-way trade in goods has grown rapidly. Statistics from the United Nations (UN) show that in 2024, the volume of trade in goods between China and the US reached US$688.28 billion, which was 275 times the volume of the trade in 1979, when diplomatic relations were established between the two countries, and more than eight times the volume of the trade in 2001, when China joined the World Trade Organization (WTO). Currently, the US is China's largest goods export destination and the second-largest source of imports. In 2024, China's exports to the US and imports from the US accounted for 14.7 percent and 6.3 percent of China's total exports and imports for the year. China is the US's third-largest export destination and second-largest source of imports. In 2024, US exports to China and imports from China accounted for 7.0 percent and 13.8 percent of the US total exports and imports for the year respectively.

US exports to China have grown much faster than its exports to the rest of the world. Since China's entry into the WTO, US exports to China have grown rapidly, making China an important export market for the US. According to UN statistics, in 2024, US goods exports to China reached US$143.55 billion, representing a 648.4 percent increase from US$19.18 billion in 2001, which far exceeded its overall export growth of 183.1 percent during the same period (Figure 1).

China is an important export market for US agricultural products, integrated circuits, coal, liquefied petroleum gas, pharmaceuticals, and automobiles. China is the largest export market for US soybeans and cotton, the second-largest export market for integrated circuits and coal, and the third-largest export market for medical devices, liquefied petroleum gas, and automobiles. UN data shows that in 2024, China was the destination for 51.7 percent of US soybean exports, 29.7 percent of its cotton exports, 17.2 percent of its integrated circuit exports, 10.7 percent of its coal exports, 10.0 percent of its liquefied petroleum gas exports, 9.4 percent of its medical equipment exports, and 8.3 percent of its passenger motor vehicle exports.

China-US bilateral trade is highly complementary as the two countries play to their comparative strengths (Table 1). Chinese customs data shows that in 2024, China's top five export categories to the US were electrical machinery and equipment and parts thereof, mechanical appliances and parts thereof, furniture, toys, and plastics, accounting for 57.2 percent of its total exports to the US. China's top five import categories from the US were mineral fuels, mechanical appliances and parts, electrical machinery and equipment and parts, optical instruments and apparatus, and oil seeds including soybeans, accounting for 52.8 percent of its total imports from the US. Machinery and electrical products are particularly important in China-US bilateral trade, exhibiting an evident characteristic of intra-industry trade.

2. China-US Trade in Services Maintains Rapid Growth

The US service industry is well developed with a complete range of sectors and strong international competitiveness. Overall, as the economy continues to develop and the standard of living rises, the demand for services in China is expanding significantly, leading to rapid growth in service trade between China and the US. According to the US Department of Commerce (USDOC), between 2001 and 2023, two-way trade in services between China and the US expanded from US$8.95 billion to US$66.86 billion, representing a seven-fold increase (Figure 2). China's statistics show the US as its second-largest trade partner in services in 2023, while US data lists China as its fifth-largest services export market. 

The US stands as the largest source of China's deficit in service trade, with the deficit generally exhibiting an upward trend. According to the USDOC, from 2001 to 2023, US service exports to China expanded from US$5.63 billion to US$46.71 billion, an 8.3-fold increase. The US annual service trade surplus with China expanded 11.5 times to US$26.57 billion (Figure 2). In 2019, the number soared to US$39.7 billion. In 2023, China continued to be the biggest contributor to the US service trade surplus, representing roughly 9.5 percent of the total. China's service trade deficit with the US is primarily concentrated in three areas: travel (including education), intellectual property royalties, and transportation (Table 2).

China's trade deficit with the US in travel services has expanded continuously. Data from the USDOC shows that in 2023, Chinese tourists made approximately 1.1 million visits to the US, with their spending accounting for 14 percent of US service exports to China. Tourism, medical treatment, and studying abroad remain the primary categories of service trade consumption for those travelling from China to the US. According to the USDOC, US exports of travel services (including education) to China grew from US$2.31 billion in 2001 to US$20.23 billion in 2023, representing an 8.8-fold increase.

China's payments of intellectual property royalties to the US have increased steadily. In 2023, intellectual property royalties remain a primary source of revenues for US service trade, accounting for 13.1 percent of its service trade revenues. The intellectual property royalties the US receives from China represent one-fifth of the total royalties obtained from the Asia-Pacific region and account for 5 percent of US global intellectual property royalty revenue.

3. China Never Deliberately Pursues a Trade Surplus

The trade balance in goods between China and the US is both an inevitable result of the structural issues in the US economy and a consequence of the comparative advantages and international division of labor between the two countries. China does not deliberately pursue a trade surplus. As a matter of fact, the ratio of China's current account surplus to GDP has decreased from 9.9 percent in 2007 to 2.2 percent in 2024.

Gains from economic and trade relations between China and the US are generally balanced. A comprehensive and in-depth assessment is required to objectively evaluate whether China-US bilateral trade is balanced, as it cannot be based solely on trade in goods. In today's context of expanding economic globalization and the prevalence of internationalized production, the scope of bilateral economic and trade relations has long since extended beyond trade in goods. Services and the local sales of domestic enterprises' branches in the other country (local sales generated by two-way investment) should also be included. When the three factors of trade in goods, trade in services, and the local sales of domestic enterprises' branches in the other country are taken into full account, it can be seen that the economic and trade benefits gained by China and the US are roughly balanced (Figure 3).

Data from the USDOC shows that in 2023, the US registered a surplus of US$26.57 billion in service trade - a notable advantage for the US. Furthermore, in 2022, the sales revenue of the US-owned enterprises in China reached US$490.52 billion, significantly exceeding the US$78.64 billion in sales revenue generated by Chinese-owned enterprises in the US. The gap of US$411.88 billion underscores the more pronounced advantage of American enterprises in multinational operations.

The US trade deficit has increased globally, while the proportion attributable to China has decreased. According to the data of the BEA, USDOC, China's share of the total US deficit of trade in goods has fallen in each of the past six years, from 47.5 percent in 2018 to 24.6 percent in 2024, while the US trade deficit with other countries and regions has increased substantially in the same period. In 2024, the US international deficit of trade in goods reached US$1.2 trillion, an increase of 13 percent year on year, the fourth consecutive year that had exceeded US$1 trillion.

China's foreign trade is characterized by large volumes of both imports and exports, a pattern mirrored in China-US trade. The value-added accrued by China from much of the export of processed manufactured goods represents only a minor fraction of the total value of all commodities. However, current trade statistics methods calculate China's exports based on their gross value (the full value of goods exported by China to the US). Calculated by the trade in value-added method, the US trade deficit with China would significantly decrease. 

China is proactively adopting various measures to expand imports. Actively expanding imports demonstrates China's proactive commitment as a responsible major country and constitutes a significant contribution to global economic development. Since November 2018, the China International Import Expo (CIIE) has been held annually in Shanghai. Both the number of participating countries and the intended transaction value have shown year-on-year growth, with cumulative intended transaction value exceeding US$500 billion. In 2024, China's imports totaled RMB18.4 trillion, up 2.3 percent year on year, with the value of imports reaching a record high. China has maintained its position as the world's second-largest import market for the 16th consecutive year.

China has systematically expanded voluntary opening up and unilateral opening up, continuing to unleash the potential of its vast market and providing increased opportunities for countries worldwide. In 2024, China imported RMB9.86 trillion of goods from the Belt and Road Initiative partner countries, up 2.7 percent, which accounted for 53.6 percent of the country's total import value. Since December 1, 2024, China has implemented a policy granting zero-tariff treatment for 100 percent of tariff lines to all least developed countries with which it has diplomatic relations, which led to an 18.1 percent growth in imports from relevant countries in the first month. In the current period and for some time to come, China possesses substantial potential for import growth. It is projected that by 2030, the cumulative value of imports from developing countries alone is expected to exceed US$8 trillion.

Actively expanding imports is also a key part of China's strategy for high-level opening up. China will systematically expand market access for goods and fully implement zero tariffs on all tariff lines for the least developed countries with which it has diplomatic relations. It will continue to use the major platforms such as the CIIE, China Import and Export Fair, China International Fair for Trade in Services, and China International Consumer Products Expo to boost imports. China will also develop national-level demonstration zones for the creative promotion of imports, steadily facilitate growth in imports, and explore more potential. The goal is to transform China's vast market into a shared global market, injecting new impetus into the world economy.

4. China and the US Are Important Two-Way Investment Partners

The US is a major source of foreign investment for China. According to the statistics of the Chinese Ministry of Commerce (MOFCOM), by the end of 2023, the actual accumulated amount of US investment in China was US$98.23 billion. In 2023, the US set up 1,920 new enterprises in China, with an actual investment of US$3.36 billion, up 52 percent from the previous year. 

The US is also an important investment destination for China, and Chinese companies' direct investment in the US has grown rapidly and significantly. The statistics released by MOFCOM show that by the end of 2023, China's direct investment in the US had reached roughly US$83.69 billion, covering 18 sectors of the national economy. Chinese companies have established over 5,100 overseas enterprises in the US, with more than 85,000 local employees. China has also made a significant financial investment in the US. According to the US Department of the Treasury, as of the end of December 2024, China owned US$759 billion of US treasury bonds, as the second-largest foreign creditor of the US.

5. China and the US Both Benefit from Bilateral Economic and Trade Cooperation

In international trade relations, countries exchange products based on their comparative advantages to realize their own value, meet each other's needs, and achieve common development. As the two largest economies in the world, the economic and trade cooperation between China and the US has generated substantial benefits for both sides, with enterprises and consumers in both countries reaping tangible benefits through bilateral trade and investment.

China-US economic and trade cooperation has created a large number of employment opportunities for the US. According to a report released by the US-China Business Council in April, 2024, China is a key market for US exports of goods and services. In terms of combined goods and services exports in 2022, China was the largest export market for three US states, in the top three for 32 US states, and in the top five for 43 US states.

According to an estimate by the US-China Business Council, the number of American jobs supported by exports to China was 931,000 in 2022, ranking third among all countries, behind only Canada and Mexico. This figure was more than the sum of US jobs supported by the two Asian markets of Japan and the Republic of Korea (ROK). 

China-US economic and trade cooperation has created a large quantity of business opportunities and profits for American enterprises (Table 3). China has a vast market and continuously growing consumer demand. For example, Tesla's sales in China have continued to grow, surpassing 657,000 units in 2024, up 8.8 percent year on year to a new historical high. More than 10 American insurance companies have subsidiaries in China. American financial institutions, such as Goldman Sachs, American Express, Bank of America, and MetLife, have achieved substantial investment returns as strategic investors in Chinese financial institutions.

Data from the USDOC in August 2024 shows that in 2022, there were a total of 1,961 American enterprises (businesses holding a majority equity stake and having assets, sales, or net revenue of above US$25 million) operating in China, with a combined total sales of US$490.52 billion, up 4.3 percent year on year. 

China-US economic and trade cooperation has facilitated the upgrading of American industries. Through cooperation with China, American multinational corporations have boosted their international competitiveness by integrating the strengths of resources from both countries. Apple designs and develops mobile phones in the US, assembles and manufactures them in China, and sells them in global markets. Tesla has established wholly-owned mega factories in China, expanded production capacity, and exported to global markets. China has taken on certain production processes for American enterprises, which enabled the US to allocate resources such as capital to innovation and management, and focus on the development of high-end manufacturing and modern services. It has driven US industry towards higher value-added and more technologically advanced sectors, reducing US domestic pressure for energy consumption and environmental protection.

China-US economic and trade cooperation has brought tangible benefits to American consumers. The US has imported from China a large quantity of consumer goods, intermediate goods, and capital goods, which has supported the development of the supply and industrial chains of the US manufacturing industry, provided US consumers with more choices, lowered their cost of living, and increased the real purchasing power of the American people - especially the low and middle-income groups.

China-US economic and trade cooperation has generated substantial business opportunities and profits for Chinese companies. By investing in the US, which is the world's largest consumer market and the most mature capital market, Chinese firms can expand their sales channels, increase the impact of their international brands, attract global clients and partners, and access financing more easily, thereby supporting rapid business growth.

US companies in China have provided experience for their Chinese counterparts in technical innovation, market management, and institutional innovation, driving Chinese companies to accelerate their transformation and upgrading and improve industry efficiency and product quality.