By Kai Li, Department of Finance, School of Economics, Peking University

As I see it, the bilateral economic interaction is the foundation for understanding the US-China relationship. And due to my major in Economics, I’d like to restrict my opinions on the US-China’s economic relationship, starting from trade issues.

Before President Nixon visited China and opened a new age for the US-China relationship in 1972, there’s almost no trade between the two nations, just like their isolated diplomatic contact. In 1978 when China just began its Reform and Opening Up policy, the trade volume between the US and China has grown to $ 1 billion. While in 2007, the trade volume was over $300 billion and the two countries have become most important trade partners. I once heard a description of the US-China trade relationship from a professor claiming that China and the US are “dancing” together, which implies that both countries have wide interests in each other and both countries have to “hold” each other so that they won’t “fall”.

Trade has greatly benefited both countries. China have been providing cheap products to the US, benefiting American consumers and keeping the inflation low. There are widespread “Made in China” tags in all kinds of goods catering to the US consumption. On the other hand, large volume of export is a crucial driver for China’s continuing fast economic growth. Moreover, vast direct investments accompanying trade have been flowing into China supporting its economic boom.

I am particularly concerned about the reform and improvement of China’s financial market as its trade and economy grow. As you may know, China's financial market is dominated by commercial banks, especially the “Big Four” commercial banks. There are many problems with the system due to high loan rate and the difficulty for small firms to finance, indicating that the Chinese capital market structure still needs to be further optimized.

That’s a crucial reason why I have applied for the Boeing U.S.-China Bilateral Trade Internship Program. I want to learn more about the advanced capital market of the US. Many people are accusing “market” (especially financial market) for current global financial crisis, but I think the major reason lies in the policy makers, not the market itself. It would be a great misunderstanding if we try to fully deny the efficiency of the market. Of course, we need to be more cautious, yet we should never change our path from the market economy. That’s why I still insist China should learn from America’s advanced experience on financial market and further reform domestic financial system according to our own situation.

As I said, trade is just a small part of the Sino-US bilateral relationship. There are far more common interests as well as some disputes remaining for these two influential nations, requiring both countries hold a candid and sincere attitude in communication and cooperation. The relationship between China and the US is beyond the interests of their own, but can also influence the whole world because all of us are so firmly connected!

China and the US are such different countries economically, politically and culturally. Thus communication of common people (especially the young people) between our two countries can be crucial for them to understand each other. A lack of understanding is usually the root for prejudice and even hatred. Two recent events can illustrate my points. During the 2008 Beijing Olympic Games, an American tourist in an interview said she was amazed by the city and she had never expected China could be so prosperous and people here were so friendly. Moreover, I and many of my friends paid close attention to the 2008 US Presidential Election. When Mr. Obama was elected, I had some new understanding of the “American dream” and the power of democracy. You see, that’s the power of communication, which makes us understand each other better. That’s just the meaning of this program.