Question

Describe the business relationship between the United States and China from 1784. Address the history of the relationship.

Answer 1

A historical stance:

Trade relations commences in 1784: Business relations between the US and China commenced in August 1784 with the ship named The Empress of China that sailed to the province of Guangzhou in southern China. It marked the beginning of trade in tea, porcelain and silk with China. However, the official relations between the two nations began only in 1844 with the signing of the Treaty of Wangxia. It not only allowed the US a most favoured nation (MFN) status with China, but also imparted greater privileges in China.

California Gold Rush in 1849: Further, the California Gold Rush in 1849 resulted in hoards of Chinese immigrants entering the US as unskilled labourers.

Sino-Japanese war of 1894-1895: Following the first Sino-Japanese war in 1894-1895, China was defeated and Japan gained control over building factories in China. The US also gained rights in China through MFN status. As a result of multiple controls held over China, the US Secretary of State John Hay initiated the concept of an "Open Door Notes" to China in 1899. It allowed foreign powers such as Germany, Russia, France, and Great Britain an equal trade opportunities with China without any direct control over China.

Anti-foreign sentiments and The Boxer Rebellion: In the last decade of 19th century, there was growing dissent among Chinese against foreign powers and especially, Americans. The rising protests in the garb of Boxer Rebellion was defeated by the military might of foreign nations in 1900. China, under the Qing dynasty was forced to pay compensation to foreign powers including the US that aggravated the anti-US sentiments. This resulted in the relations between two nations deteriorating with China boycotting US products and emergence of nationalism. The second decade of 20th century was marked by the fall of Quing dynasty in 1911 and the establishment of the Republic of China (ROC). Not far behind was the beginning of World War 1 in 1914-1915.

Japan extends its powers in China resulting in the second Sino-Japanese war: As Japan continued its expansion led by the attack on the Great Wall of China in 1933, a full blown war resulted in 1937. The crimes committed by the Japanese forces over China brought together the foreign powers including the US to support China financially and limiting trade with Japan. Finally, during the era of the US President Roosevelt, the extension of financial aid improved the bilateral relations between China and the US; with the US later ending almost 60 years of embargo on Chinese immigration albeit still with low quota.

Later, the US remained aloof from the Chinese civil war and recognising ROC as official establishment. It was the cold war between the US and the Russia (formerly USSR) that left indelible mark on growing fear of Communism in the US that strained the US-China relations going ahead.

It was only when President Nixon's 1972 visit to China that brought a turn around in the US-China relations thereby marking the end of 25 years of disassociation.

A number of economic reforms introduced by Deng Xiaoping in 1980s permitted presence of international companies. The US took advantage of these reforms and both countries increased the bilateral trade. China enhanced its relations with foreign countries after becoming member of the IMF, World Bank, and the Asian Development Bank.

Relations in 21st century: The intertwining of geopolitical factors and forces has influenced trade policy in recent years in shaping the policy dimensions between the two countries.