During the recent US-China Investment Cooperation Forum in Beijing, new trade-cooperation mechanisms were put on the table and negotiations on free trade zones was specifically mentioned.
Trade relationships are key to the Sino-US relationship. While both countries are in the process of choosing new leaders, positive suggestions and plans from an economic perspective are essential to the two countries' relationship. Establishing a free trade zone is one of the most creative suggestions.
In recent years, there has been plenty of dialogue between China and the US over trade and economic issues, but barriers to bilateral trade relations remain.
It may well be wise to take some bolder and more creative actions. As economists and officials of both countries have suggested, China and the US should start negotiations on a free trade zone, which will be a difficult process but could eventually help create a better trading environment.
The world is now going through a historic restructuring of its economy. New emerging economies account for bigger chunks of the global economy, from about 20 percent in the past 100 years to 30 percent now. In terms of proportions of the global economy, it is estimated that these emerging economies will surpass developed economies in the next 20 years.
But with these changes come huge risks. Conflicts will arise when emerging economies and developed ones strive for more space to develop. In the past, new international orders were formed after such conflicts were solved. However, with today's technological development, clashes between large economies would be disastrous for the whole world, and therefore need to be avoided.
China is the world's largest developing country, while the US is the largest developed country. Dealing with each other properly is essential to both, but on this issue there is neither textbook nor historical experience from which to learn.
Ideally, China and the US should be complementary to and supportive of each other, since each country needs the other side's cooperation and success for its own development.
On the one hand, China is now needs creativity and technology, traditional US strengths, to restructure its industries. On the other, the US wants the potential of China's large market to support its economic revival.
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