Increased Trade between USA and China

The increase in US trade with China since 2001 will push US GDP up and drive prices down significantly by 2010, according to a report released today by the China Business Forum, the educational and research arm of the US-China Business Council.

The study finds that the increase in US trade with China associated with China's economic reform program will boost US GDP by up to 0.7 percent and will reduce prices by up to 0.8 percent by 2010. Together, this translates into an increase of up to $1,000 in real disposable income per US household per year by 2010.

"Critics of US trade with China assert it harms the US economy. But this report finds that trade with China results in Americans saving money and the US economy receiving a positive boost to produtivity and real wages," said Erik Britton, author of the report.

The report also finds that the recent expansion of trade with China is contributing to a decades-long shift in the structure of US employment away from manufacturing and toward services. US manufacturing employment will fall, but employment in services - in industries including distribution and financial services - will increase, with no net impact on total employment in the long run.