Abstract
Since the Chinese market opened up in the end of the 1970s and several economic reforms were started to be implemented, the state’s economy and global influence grew significantly. As of today, China can be considered as one of the world’s greatest emerging powers. The state’s immense growth in power and influence leads to the prediction that China will be capable to challenge the hitherto prevailing status quo of U.S. predominance in the international world order. As China has the option to either undermine U.S. power or to complement it, the analysis of U.S-China relations is of great interest. Therefore the thesis investigates in the Sino-American relationship during the first 15 years of the 21st century with special focus on the economic interdependence of the two countries and how the Taiwan issue influences this relation.
The matter of economic interdependence between China and the U.S. is analysed by taking a closer look at U.S.-China trade from 2001 to 2015 as well as the respective foreign investment in each country of question. The Sino-American trade grew significantly during the last 15 years: The total trade of goods increased from $80.48 billion in 2001 to $520.75 billion in 2013, according to the National Bureau of Statistics of China (2012). Economic statistics between the U.S. and China differ greatly, which can be accounted to different methodologies to calculate data applied by each country. Therefore, U.S. official statistics by the United States Census Bureau (2015) compile different numbers, stating that the total trade of goods between China and the U.S. increased from $121.46 billion in 2001 to $562.16 billion in 2013. Next to the bilateral trade, bilateral investment of China and the U.S. grew as well. The U.S. is the 6th biggest investor in China, with a total investment of $2.59 billion in 2015. The Chinese economy constitutes a profitable market for U.S. manufactures, because of lower labour costs compared to other Asian countries. With the relocation of U.S. companies from Japan or Taiwan to China, the U.S. contributes significantly to China’s FDI.
In order to investigate the influence the Taiwan issue has on U.S.-China relations, the reactions of the U.S. and China towards Taiwan’s endeavours to reach independence, as well as the position of the U.S. and China towards the continued arms deals between the U.S. and Taiwan, are subject of the analysis. Since the Second World War, U.S.-Taiwan relations had been close. Both U.S. presidential administrations of the 21st century stressed that the three Joint Communiqués, thus also the one-China principle, as well as the Taiwan Relations Act form the basis of U.S.-Taiwan relations. However, the relationship between the U.S. and Taiwan were put to the test when Taiwan’s then-president Chen Shui-bian pursued determined steps to lead Taiwan into independence from China. The Bush administration emphasised that it will not accept any unilateral endeavours to alter the status quo across the Strait. Nevertheless, arms sales between the U.S. and Taiwan continued steadily until today. After the inauguration of Taiwan's new president Ma Ying-jeou, relations across the strait started to improve, not least because of the implementation of several economic policies and agreements between Taiwan and China.
The continuation of arms sales between the U.S. and Taiwan throughout the years was justified by both U.S. governments by referring to the Taiwan Relations Act, which states U.S. commitment to support Taiwan to defend itself from outside threats. China, however, argues that the U.S. officially acknowledges the one-China principle and the PRC as China’s sole legal government. Therefore, according to China, Taiwan is an internal Chinese affair, in which the U.S. is interfering in. Furthermore, China stresses that arms sales to Taiwan are not solely of defensive nature, although the Taiwan Relations Act states that the U.S. should only supply defensive weaponry to maximise the island’s security.
Overall, Sino-American economic relations improved significantly in the course of the past 15 years, which also positively influenced political relations between the two countries. Additionally, improved economic relations across the strait proved to be beneficial for U.S.-China relations. Both countries were able to continue strengthening their bilateral ties without being increasingly apprehensive about how the respective relations with Taiwan might influence these. Nevertheless, controversial subjects between the U.S. and China remain.