United States-China Economies “Interdependent”
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The economies of the United States and China are closely connected according to the East West Institute during their 8th Worldwide Security Conference.
The economic connection, according to the East Wast Institute, stems from China's reliance on foreign investments to grow their economy and the US reliance on China to hold its sovereign debt.
Currently, China holds over $1 trillion in US treasury bonds, while US-based company Wal-Mart accounts for 1% of China's total annual economic output.
Vice President for Program Development and Rapid Response at the East West Institute, Dr. Greg Austin said the strategic decisions made by both countries are greatly affected by their economic connection particularly the US. “Basic essence of daily social life in the United States…depends in many ways in economic dependence and output in countries like China,” he said.
Xenia Dormandy, Senior Fellow at the Chatham House, agreed.
“I don't believe you can separate economic and border security any more,” she said. The close interconnectivity amongst the two nations, mean that they must take into account the other nation when making key strategy decisions, according to Austin. The connection also means that according to Austin, that one nation could not launch a cyber-attack on the other, without damaging its own economy.
The panel also took into account how each country viewed the other, and the affect that has on their economic relationship.
Dormandy said the United States looked towards China as a land of opportunity and a responsible stakeholder in the global economy. Recently, however, US views of China have hardened and bordered on adversarial. According to David Firestein, a former US State Department aide, President Barack Obama mentioned China four times while only discussing Afghanistan once, demonstrating that the US views China as a significant threat, not just an economic opportunity.
Likewise, China has become disenchanted with the United States over its stagnant economy, currently sporting a 9% unemployment rate, and its high level of federal debt.
Firestein said that next year will be a challenging year in US-China relations, given that both nations could go through a transition of power. Only once every 20 years is there a possibility of a new US President and new Chinese leadership in the same year. It was clear that despite a hardening relationship dynamic, China and the US will have to work together in global security, given their economic impact on the rest of the world.
Dormandy proposed a regional association between the US, China, India and Pakistan to deal with regional security issues and economic cooperation. She also urged cooperation in the cyber-security sphere between the two nations, saying that one cannot govern the internet without the help of the other.