Can Increased Trade Prevent Conflict With China?

Abstract

China is a salient subject in U.S. trade policy debates as a result of its growing world influence and national interests that sometimes conflict with those of the United States. Often the focus on a sustainable current account deficit and the impact of increased financial integration is overlooked in favor of more emotional issues such as Chinese labor conditions and the loss of U.S. manufacturing jobs. This paper explores the increasing current account deficit with China, its impact on the Dollar, and the effects of integration on economic growth.