China: Trade and the Environment

US Trade With China

History of Trade With China

Trade between the China and the United officially started in 1784 when U.S. ships went to China to buy good from Chinese merchants to be sold in the United States (Huntsman, pg 2). Trade during this time was limited because the Chinese allow only limited access to these U.S. ships. Despite these limitations U.S. merchants continued to buy exotic good from the Chinese. The trade between the United States and China during these years was not very extensive.

In the 19th century the United States along with other countries began to sell opium the Chinese. “U.S. merchants found they could buy a pound of opium in Turkey for $2.50 and sell it in Canton for $10.00” (Markoe). Chinese attempt to block opium trade meet with resistance from foreign countries and resulted in the Opium wars between China and Britain (Markoe). Britain won the Opium wars and forced China to accept opium imports as well as helping to open more ports to international trade (Markoe). The fall of the Qing dynasty began to affect U.S.-China trade in 1929 when access to Chinese ports became more restricted to foreigners (Huntsman, pg 2). Foreign trade in China generally declined after this time due to the rise in nationalist policies (Huntsman, pg 2) and instability within China (Markoe), and the Great Depression’s affect on Chinese and world markets.

The Great depression created changes in trade between the US and China. The first was a change in currency valuation of the silver back Yuan. During the first years of the Great Depression silver depreciated worldwide causing an increase in the amount of silver being exported to China (Shiroyama, pg 141). As silver began to accumulate in Chinese banks and the value of silver began to appreciate it became harder to for foreign countries to export goods to China (Shiroyama, pg 144).

China became communist in 1949. Because of the Korean and Vietnam wars trade between the two countries stopped for the 22 years (Markoe). Trade between them started again in 1972 (Markoe). In 1972 Nixon flew to China and the Shanghai communiqué was signed normalizing trade between China and the U. S (Huntsman, pg 3). However trade between the two countries was sluggish until the late 70’s, early 80’s (Huntsman, pg 3)

Positives of Trade With China

*Environmental Positive

Trading with the US has helped China’s environment in some ways. China is taking steps to become more environmentally friendly. They have had environmental protection laws since 1979. It has reduced its energy intensity, which means it is reducing the amount of CO2 emitted. They are replacing coal with oil and natural gas. Trade with the World Trade Organization (WTO) has helped. This gave them more access to pollution control technology. The WTO agreement opens China up to more sanitary sewage management services.

The increase in trade has also increased the economy which has helped increase environmental regulations because there are more resources for enforcement and people demand a clean environment. American companies can now invest in China and help bring best management practices to the workplace. This sets a good example for other Chinese companies. China also relies heavily on foreign partners for technological advances. Trade between China and the US has helped increase pollution standards in China. For example, the US implements higher fuel-efficiency standards and China has to make their cars pass these standards if it wants to sell them in the US. Trade with China helps the US have more control over China’s environmental policies by creating internationally recognized standards for protecting human health, the environment, and energy conservation. If the US invents cleaner technologies they can transfer them to China very easily.

The US EPA is also working with China’s State Environmental Protection Administration to reduce mobile-source emissions. They also have plans to work on fuel quality, emission control, diesel retrofits.

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*Economic Positives

Negatives of Trade With China

*Environmental Negatives

China has the largest population of any country in the world. Its economy is also growing rapidly. This puts strain on the environment and natural resources. Some of China’s environmental issues include air pollution, biodiversity losses, cropland losses, disappearing wetlands, grassland degradation, invasive species, salinization, soil erosion, trash accumulation, and water pollution. China is the biggest contributor of sulphur oxides and chlorofluorocarbons into the air. Tropical deforestation is also a major issue in China.

Beginning in the 1970’s, China began to import modern plants and technology and export oil. This increasing demand for oil is quickly diminishing China’s oil supply. With oil drilling there comes many other environmental issues. Oil drilling can cause contamination of water supplies, deforestation, land loss and much more. The greater demand for oil has created greater devastation of resources.

Another problem in China is land use, which has switched from farm land to industrial. This creates less usable land to grow food for the increasing population in China. The greater demand for products coming from the US and other countries increases the need for factories and industry. This in turn requires more land and takes away from the farm and rural land.

The increased demand for factories in China also causes air pollution. Industries burn half of China’s coal for energy power. It estimated that 21 million tons of sulfur dioxide and 13 million tons of particulate matter are released into the air every year from industrial production. This problem is worsened because of inefficient energy use, dirty coal, and no emission controls. Of the 10 most polluted cities in the world China contains 7 of them. This causes huge health effects to China’s citizens.

*Economic Negatives