AeA: China's market for U.S. tech goods argues against trade protectionism

Washington, D.C. - The economic rise of China, the world's most populous nation, does not pose a threat to the United States and, given the amount of high-tech goods being exchanged between the two nations, it argues against protectionist trade policies, according to a report from the American Electronics Association.

The 23rd edition of AeA's Competitiveness Series analyzes the economic relationship between the United States and China in terms of high-tech trade and foreign direct investment. The report identifies public policy recommendations for dealing with China as a rising economic power, starting with the promotion of free trade.

Rob Mulligan, senior vice president international for AeA, said in a statement issued with the report that China's explosive economic growth should influence American trade policy.

“Public policy in both the United States and China must recognize the interdependent nature of our economies and avoid protectionism and distorting trade practices,” Mulligan said. “Such policies restrain trade, damage economies, and raise prices for consumers.”

In terms of technology, the economic relationship between the two countries has grown significantly in recent years, according to AeA.

American high-tech exports to China more than doubled, from $5.7 billion to $14.5 billion, between 2001 and 2007, making China the third fastest growing and the third largest destination for U.S. high-tech goods. In terms of trade involving technology products, only America's two North American Free Trade Agreement partners, Canada and Mexico, surpass China.

The report said overall U.S. direct investment in China was $22.2 billion in 2006, a 30 percent increase over 2005, while U.S. technology investments in China totaled $1.9 billion, a 69 percent jump over 2005.

In addition, U.S. technology imports from China rose from $26 billion to $112 billion between 2001 and 2007.

AeA, the nation's largest high-tech trade association, also said China would need to abandon controversial practices of its own. These include showing more respect for American intellectual property rights.

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