assessments

U.S.-China Trade Timeline: 1784-2008

9 MINS READDec 12, 2007 | 23:22 GMT
TEH ENG KOON/AFP/Getty Images
The United States and China have a long and storied history of trade relations (and lack of relations). The following timeline highlights significant events in U.S.-Chinese trade history, with a particular focus on events since 2005 — when things really began to heat up.
  • 1784: U.S. ship Empress of China arrives at the Pearl River Delta from New York harbor to trade cloth, pepper and ginseng for Chinese tea, silk and spice.
  • 1840-1842: Chinese refusal to import U.S. (and British) cargos of opium triggers the Opium War. The war ends in 1842 with the Nanjing Treaty, in which China cedes Hong Kong to the British and opens up ports such as Canton to British merchants.
  • 1844: The United States gains the same trading rights as the United Kingdom under Treaty of Wanghia.
  • 1941: U.S. military and financial aid starts flowing into China to support the Nationalist government.
  • 1943: The Treaty of Tien-Tsin is revised to revise provisions considered to be unfair to China; permission for the United States to station troops in China granted shortly thereafter, in order to support the joint war effort against Japan.
  • 1949: The Communist Party of China assumes control of China and establishes the People's Republic of China; the Nationalist Party retreats to island of Taiwan.
  • 1950-1970: The Korean war freezes all U.S.-China trade and travel — a state of affairs that lasts for two decades.
  • 1971: U.S. Secretary of State Henry Kissinger makes a secret visit to China, laying the groundwork for resumption of U.S.-China trade within the decade. Chinese and U.S. resistance to bilateral trade starts thawing. The U.S. trade embargo against China is loosened to the same conditions imposed on trade with the Soviet Union. Bilateral trade starts growing (from zero).
  • 1972: U.S. President Richard Nixon makes a landmark visit to China and signs the Shanghai Communique, kick-starting work toward normalization of diplomatic ties
  • 1979: Washington and Beijing reestablish formal diplomatic relations. Bilateral trade hits a cumulative $2.4 billion since 1971. A three-year U.S.-China Trade Relations Agreement is signed, awarding both sides most-favored-nation status.
  • 1980: The first Special Economic Zones open up in China, offering preferential treatment for U.S. and foreign investors. China returns to the World Bank and International Monetary Fund.
  • 1984: U.S. President Ronald Reagan visits China and signs an agreement to eliminate dual taxation and ban tax-evasion. Beijing launches a program of economic reforms, opening itself up economically to the world.
  • 1988: Exports to the United States make up one quarter of China's total $40 billion in exports.
  • 1989: Broad U.S. sanctions are imposed on China subsequent to the Tiananmen Square incident, including a ban on all U.S. financing of China-related projects and an embargo on all exports to Chinese military and police entities.
  • 1992: Deng Xiaoping rejuvenates China's sputtering economic reforms (and hence a favorable foreign investor environment) by making a tour of southern China — where most economic experimentation was concentrated.
  • 1994: The first of many high-profile intellectual property rights (IPR) disputes breaks out between the United States and China. The dispute is resolved two years later.
  • 1997: Hong Kong is returned from British colonial to Chinese mainland rule. The next decade sees the former colony continuing to function as a financial and legal gateway into China for foreign investors.
  • 1999: U.S. President Bill Clinton pledges support for China's application to join the World Trade Organization during Chinese premier Zhu Ronji's April visit to the United States. A bilateral trade agreement is signed in November.
  • 2001: China joins the World Trade Organization. The United states assigns Permanent Normal Trade Relations (PNTR) to China so that Normal Trade Partner status no longer has to be approved each year by Congress — sparing U.S. investors in China one major source of uncertainty.
  • 2002: Foreign-funded banks are allowed to handle Yuan-denominated transactions in select Chinese cities for first time. China becomes the fastest growing market for U.S. exports.
  • 2003: China's foreign exchange authority opens up mainland stock markets (A-shares) to foreign institutional investors by launching Qualified Foreign Institutional Investor quotas. Microsoft and China announce a Government Security Program Agreement.
  • 2004: The United States files its first-ever WTO trade complaint case against China, kicking off the use of this multilateral trade body as a forum for tying up economic disputes in red tape while keeping domestic interest groups appeased.
  • 2005 (January): The first Chinese cars arrive in the U.S. market. Beijing's open-air Silk Market (a haven for counterfeit U.S.-brand consumer goods) is closed, but a new one opens almost immediately after down the road. U.S. Sens. Charles Schumer and Lindsay Graham announce a bipartisan bill to "level the playing field" on U.S.-Chinese trade, threatening to apply a 27.5 percent tariff to all imports from China; this is the first of many such bills threatening across-the-board tariffs, which have yet to succeed in pushing through any tariff action.
  • 2005 (June): Chinese energy giant China National Offshore Oil Corp. (CNOOC) makes a (subsequently blocked) bid for U.S. oil giant Unocal Corp.
  • 2005 (july): China releases its currency, the Yuan, from its fixed peg to the U.S. dollar; however, a de facto peg remains, with fluctuation in the exchange rate limited to a tightly managed band.
  • 2005 (September): Former U.S. Deputy Secretary of State Robert Zoellick introduces the concept of the "responsible international stake holder," which China absorbs as a key component of its foreign policy.
  • 2006 (September): Chinese holdings of U.S. Treasury securities hit $618 billion.
  • 2006 (November): China launches its first Qualified Domestic Institutional Investor fund, allowing Chinese institutions and residents to buy U.S. financial products. Officials from People's Bank of China indicate that China will start diversifying its foreign-exchange reserves away from the U.S. dollar.
  • 2006 (December): U.S.-funded banks are allowed to handle Yuan-denominated transactions in select Chinese cities for the first time. The first-ever U.S.-China Strategic Economic Dialogue takes place in Beijing.
  • 2007 (January): Chinese capital markets officially open up to foreign players under World Trade Organization rules.
  • 2007 (February): Washington files a World Trade Organization case against China over subsidies Beijing pays to its exporters.
  • 2007 (March): China passes its first-ever Property Rights Law.
  • 2007 (May): The second U.S.-China Strategic Economic Dialogue takes place in Washington. China buys into U.S. equity player Blackstone for $3 billion. The United States and China reach an Initial Aviation Liberalization Agreement, the first step toward forging an eventual "open skies" pact akin to the U.S.-EU agreement.
  • 2007 (June): China announces plans to set up a new state investment agency.
  • 2007 (July): JP Morgan Chase & Co. gets a commercial banking license in China to open its own retail outlets. InterContinental Hotels Group launches a co-branded credit card in China with Shanghai Pudong Development Bank. Chinese toy recalls by U.S. brands like Mattel dominate headlines (although recalls started late in 2006); these come amid various product quality scares over Chinese toothpaste, pet food and tires. Selective U.S. bans kick in, and Beijing bans U.S. milk and meat products.
  • 2007 (September): China and the United States sign an energy accord. U.S. equity firm Blackstone enters the Chinese market by buying a stake in key Chinese state-owned chemicals producer China National BlueStar Corp. U.S. computer giant Dell confirms it will sell computers to the Chinese domestic market through Chinese electronics retailer Gome. Mattel issues a public apology to the Chinese government and public for its share of the blame (80 percent) for recalled toys. Chinese holdings of U.S. Treasury securities drop to $582 billion. A new Chinese sovereign fund, the Chinese Investment Corp., officially opens for business.
  • 2007 (October): U.S. pressure for Beijing to ramp up yuan appreciation policy is boosted at the G-7 meeting, when EU member countries make the yuan a priority issue as well. China approves a new food safety law, partly in response to foreign scares. Foreigners in the southern city of Guangzhou start having to declare their personal income for tax purposes; this is another step in the integration of foreign and local tax rules to increase transparency and reduce disparities.
  • 2007 (November): People's Bank of China Governor Zhou Xiaochuan confirms that China will not sell off existing holdings of U.S. Treasury securities, but will wind down new purchases as it diversifies its foreign-exchange reserves. Local Chinese governments implicitly (by offering financial and legal support) encourage Chinese manufacturers affected by toy recalls to take their former U.S. buyers to court. A new Chinese income tax law is submitted for approval; the law, meant to level out the playing field between foreign and local firms under World Trade Organization obligations, would withdraw tax concessions that foreign investors previously enjoyed. Chinese exports to the United States hit $21.7 billion for the month.
  • 2007 (December): The New York Stock Exchange opens its first office in China. The third U.S.-China Strategic Economic Dialogue takes place in Washington. U.S. Trade Representative Susan Schwab declares a "breakthrough" in resolving complaints about Chinese subsidies to exporters. The quota for foreign institutional investors wishing to invest in Chinese capital markets is tripled.
  • 2008 (January): A new Chinese Contract Labor Law comes into effect — another step in the gradual erosion of China's cheap-labor advantage relative to Western countries. China Mobile is set to start selling BlackBerry products.

Article Search

Copyright © Stratfor Enterprises, LLC. All rights reserved.

Stratfor Worldview

OUR COMMITMENT

To empower members to confidently understand and navigate a continuously changing and complex global environment.

GET THE MOBILE APPGoogle Play