People’s Daily recently published an editorial under its pen name Zhongsheng (a homophone for “China’s Voice”) addressing the trade imbalance between China and the United States. The piece argued that the U.S. trade deficit with China is not as severe as portrayed and is primarily the result of structural issues within the U.S. economy.
“The U.S. trade deficit with China in goods is not only a natural outcome of structural issues within the U.S. economy, but also a result of the two countries’ comparative advantages and the current pattern of international division of labor,” the editorial stated.
The article presented several key arguments:
- Services Trade: In 2024, the U.S. ran a $27.3 billion services trade surplus with China.
- Multinational Operations: In 2022, U.S.-invested companies in China reported $490.5 billion in sales, far surpassing the $78.6 billion in sales by Chinese companies in the U.S. – a gap of over $400 billion.
- Global Supply Chains: A significant portion of Chinese exports to the U.S. includes components from the global production network. However, trade statistics are currently calculated based on gross export value, attributing the full value to China. If measured using value-added methods, the U.S. trade deficit with China would be substantially smaller.
- Declining Proportion: The share of the U.S. goods trade deficit attributed to China fell from 47.5 percent in 2018 to 24.6 percent in 2024, even as the overall U.S. trade deficit hit a record $1.2 trillion in 2024. This, the editorial argues, highlights that the root cause lies in the internal structure of the U.S. economy, not in China’s trade practices.
Source: People’s Daily, June 10, 2025
http://world.people.com.cn/n1/2025/0610/c1002-40497354.html