As we expected of the diplomatic confrontations on the economic and political issues between the two countries: one pretty established nation-USA and the other one challenging its establishment-China. Let’s see the USA-China history and ways ahead.

Since last three decades, the USA administration has made plans to get tougher for their challengers: the difference is first it was Japan and now it is China. Getting tougher to the countries like China and Japan had already been a plan of the Clinton government also long back in 1992 and that was his electoral campaign too. But, when there was a necessity to file a case against Japanese auto policy in 1994, looking at the possibility of instability of the financial markets, Clinton government backed off. Clinton government was the one who actually made grounds for China to enter into the WTO but Bush government never wanted to see China as its strategic partner. Bush’s era was all about wars and not much of significant economic decisions.  Obama, in his first term already had a plan to be tougher in China than the Bush government earlier and records show that in the last four years- the Obama administration has filed more trade cases against China than the Bush government.

As expected, Mr. Robert Hormats from USA made an official visit to China few weeks back which was taken by the world as an economic confrontation. It seemed as if USA now wants to establish a bilateral economic relationship with China exploring all the possibilities for the mutual benefits and emphasizing the win-win cooperation. He tried to show how imports from China increased to $399 billion and exports to China increased to $103 billion in 2011 showing a 4-fold and 5-fold increment simultaneously in last ten years.

Whatever is said by the USA authority, the reality remains that Chinese investment will continue to grow in USA and unless and until the dependence on the Chinese loans to lessen the trade deficit in USA shrinks, these economic frictions and strategic relationship will continue.