Is China a Threat to the U.S. Economy?
on January 13, 2007
The rise of China from a poor, stagnant country to a major economic power within a time span of only twenty-eight years is often described by analysts as one of the greatest economic success stories in modern times. From 1979 (when economic reforms were first introduced) to 2006, China’s real gross domestic product (GDP) grew at an average annual rate of 9.7 percent, the size of its economy increased over elevenfold, its real per capita GDP grew over eightfold, and its world ranking for total trade rose from 27th to 3rd. By some measurements, China has become the world’s second-largest economy, and it could be the largest within a decade. For the United States, China is now its second largest trading partner, its fourth-largest export market, and its second-largest source of imports. To date, the growth in Chinese exports appears to have come partly at the expense of Asian competitors. However, the emergence of China as a major economic superpower has raised concern among many U.S. policymakers, who worry that China’s rise means America’s relative decline. This report examines the implications (both challenges and opportunities) for the U.S. economy from China’s rapid economic growth and its emergence as a major economic power. It also describes congressional approaches for dealing with various Chinese economic policies deemed damaging to various U.S. economic sectors.