Title: US Needs China More Than China Needs the US | IndustryWeek
Headings: US Needs China More Than China Needs the US
US Needs China More Than China Needs the US
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Content: But China’s export share of its gross domestic product has fallen from 37 percent in 2007 to slightly less than 20 percent today, an important outgrowth of a decade-long rebalancing. By drawing increased support from domestic demand, China is better able to withstand the pressure of tariffs and other actions that are aimed at its exporters. Not so with the United States. The U.S. depends heavily on China for providing the low-cost goods that enable income-constrained American consumers to make ends meet. The U.S. also depends on China to support its own exports; next to Mexico and Canada, China is America’s third largest and by far its most rapidly growing major export market. And, of course, the U.S. depends on China to provide funding for its budget deficits. It is the largest foreign holder of U.S. Treasury securities – some $1.3 trillion in direct ownership and at least another $250 billion of quasi-government paper. A lack of Chinese buying could turn the next Treasury auction into a rout. America depends on China because of a fundamental weakness in the structure of the U.S. economy -- a profound and worrisome lack of domestic saving.