The first round of the Sino-US strategic economic dialogue was held on July 27 in Washington. Five issues are concerned in the economic field by China and the United States, they are addressing financial crisis, maintaining stability of assets in U.S. dollar, exchange rate, strengthening energy cooperation and trade protection.
At present, mainstream views of the two countries agree that the current economic recovery is not solid, it is not the proper time to make major adjustments in macro-policy orientation, "maintaining the status quo" is perhaps the best choice. In terms of fiscal policy, China and the United State are unlikely to introduce new program of fiscal stimulus in short term. The same situation is with monetary policy, so there will be no fundamental changes during the year.
The Chinese government has always been clearly opposed trade protection. After the financial crisis, the United States has implemented some specific policy measures that are in favor of the United States but go against other countries, these measures are opposed by China.
The United States is China's second largest export market, for a long time, China's textile exports to the United States account for roughly 30 percent of U.S. textile market. No doubt, the U.S. market is important to China's textile exports. During January to May this year, China's exports of textiles and garment to the United States achieved a growth of 3.75 percentage points in U.S. import market share. But China's textile exports to the United States are still not optimistic, as the current economic recovery in the United States is not solid, unemployment remains a serious problem, effective demand is low, in addition to the block of trade protectionism.
Due to intense competition, textile importers and the domestic consumers in the United States are looking forward to lower prices, some experts predict that there will be no large space for prices to go higher in the next few years, even if Chinese textile products have obvious advantages in terms of quality and price, it will be considerably more difficult for total export volume to realize substantial growth in the future.
Chinese textile products already account for nearly 30 percent of U.S. market share, although the Americans will not set clear limitation on Chinese textiles, the U.S. government may control import share and channels by using the power of national protectionism. Therefore, it will be increased difficulties in negotiations on U.S. textile trade. Textile trade friction is bound to be a protracted war.
