China’s president Xi visited US

During his late-September visit to the US, Chinese president Xi Jinping discussed topics ranging from deeper economic cooperation to cybersecurity.

Xi promised to improve treatment of foreign firms operating in China and announced that China would assume a greater role in development cooperation. One achievement of the visit was an agreement in principle on fighting cyber attacks. China and the US engaged in discussion of a bilateral investment treaty, but had little to show for it. The countries have tried since 2008 to move ahead on the matter, but significant differences remain on the terms of such an agreement. The Americans argue that China wants to protect too many branches from foreign competition.

The United States is China’s most important export market (17 % of all exports), and China is the third largest export market for the US after the EU and Canada. US services exports to China have grown particularly fast. The countries are also major sources of foreign direct investment for each other. Not only are the Chinese increasingly borrowing from American banks but also holding large amounts of US government treasuries, thus increasing interdependence.

China-US trade

Source: Macrobond.