Assignment 1 Lasa 2 International Trade

Table below represent US trade balance with China over years (2007-2011):YearsExport200762,936,891,576200869,732,837,543200969,496,678,611201091,880,613,0792011103,939,433,941YearsImport2007321,442,866,9342008337,772,627,8232009296,373,883,4882010364,943,854,1512011399,361,922,088YearsTrade balance with China (millions of dollars)2007-258,505,975,3582008-268,039,790,2802009-226,877,204,8772010-273,063,241,0722011-295,422,488,147China (in terms of trade volume) is the second largest trade partner of United States. Looking at the data, it can be noted that over the last five years, United States has continuously been in trade deficit with China i.e. Chinese exports to United States exceeds its imports from United States. Product wise, except for some primary sector products, manufacturing products and petroleum and coal products, the United States has trade deficit with China in almost all products. This means that United States is exporting more jobs than it is importing from China.These data shows to what extent U.S economy is dependent on Chinese economy. United States is heavily dependent on Chinese economy for many its important requirements and as a result Chinese are holding huge amount of dollars as reserves. This is likely to put upward pressure on the