US-China bilateral trade: Evolution and imbalances

Abstract

The US and China are biggest trade partners in the world. The rise of the Chinese economy and its dominance over world economics and politics has made the US to re-think its strategy. Moreover, growing trade deficit proves US dependence on Chinese imports. The paper elucidates the reasons for this shift, that may be attributed to a multitude of factors ranging from unfair business practices by the Chinese to the market seeking behaviour of US firms. The paper attempts to decipher the global value chain and position these economies at appropriate levels