High-Tech Trade Between U.S., China On Rise, Study Says

China was the sixth largest destination for U.S. high-tech exports in 2004, the study says, and direct investment between the two countries is also increasing.
SAN FRANCISCO — The economic relationship between the U.S. and China is increasingly interdependent, particularly with regard to the production and sale of high-tech products, according to a study released Wednesday (Nov. 16) by the AeA (formerly known as the American Electronics Association).

According to the study, China was the sixth largest destination for U.S. high-tech exports in 2004. Including Hong Kong, China was the third largest destination for U.S. high-tech exports.

The study found that U.S. high-tech exports to China have risen dramatically over the last seven years — nearly tripling from $3 billion in 1998 to $8.7 billion in 2004. Over the same time period, U.S. high-tech imports from China more than quadrupled, from $16.2 billion to $68.2 billion, according to the study.

The AeA research also revealed that direct investment is also on the rise between the two countries. In 2004, U.S. direct investment in China totaled $15.4 billion, a 34 percent rise over 2003, the study found, with technology investments representing $1.8 billion, a 38 percent rise over 2003. Chinese direct investment in the U.S., is small but rapidly growing, according to the study, growing 59 percent from 2003 to 2004 to $490 million.

“We are not going to stop the economic growth of China — nor should we want to,” said Rob Mulligan, AeA senior vice president, in a statement. “The United States stands to gain tremendously as both investment opportunities and exports to a rapidly growing Chinese consumer market increase.”

Mulligan added that these opportunities also bring challenges. “These include an expanding trade deficit, currency controls, intellectual property infringement, inadequate WTO compliance and a host of others," he said. "The Chinese government also needs to recognize the legitimacy of these concerns.”

AeA (San Jose, Calif.) said it intends to do a follow up report next year that will address major policy concerns in the U.S-China economic relationship.

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