In a recent visit by Xi Jinping, Vice President of the People’s Republic of China, to the United States (US) last Feb 17. in Los Angeles at the invitation of US Vice President Joe Biden, trade relations between the two countries take a positive turn. This confidence boosting effort has taken shape amidst the two countries’ sour military foreign relations.
The Feb. 17 visit resulted in the signing of a number of economic and trade contracts at the China-US Economic Trade Cooperation Forum. The signing is considered to be the second large-scale economic and trade pact between the US and China. The first pact involved US$45 billion worth of contracts entered into by the two countries when President Hu Jintao visited the US last year.
Some of these contracts involve the traditional purchase and import modes. An example of which is Sanhe Hope-full Grain & Oil Group that purchased US$1 billion worth of soy beans from an American company. Another is Yingli Energy, which purchased US$1.634 billion in silicon material.
There are contracts entered into that are considered to be new modes of US-China cooperation. This involves Jiaxing Stone Wheel and Zhejiang Hengzheng Valve’s joint-purchase of American tire enterprises.
The most significant development, however, involves ENN Solar Energy Co.’s investment to build a clean energy ecological center in Las Vegas, Nevada. This type of trade cooperation embodies a diverse investment mode and signals a new trend in the Sino-US economic and trade relations.
ENN’s investment will be US$5 billion in Nevada and the clean ecological center will include a solar energy photovoltaic generation base, a solar module manufacturing base and a future energy eco-town. This capital investment plus technology transfer are expected to provide local residents source of green energy and provide them with more than 4,000 jobs.
Wang Yusuo, ENN’s chairman of the board, made a speech on behalf of Chinese privately owned enterprises at the forum and expressed his good wishes for the investment and cooperation in new industries. With respect to ENN’s role as investor, he said that ENN would continue its spirit of innovation by beginning a second startup with the support of both governments.
Experts see these new trade patterns and economic cooperation as game-changers that hopefully will boost cooperation between China and the US. They believe these have to do with the fast improvements of Chinese enterprises especially in the area of technological innovations.
“With the further development of China’s reforms and opening to the outside world and modernization, the traditional Sino-US cooperation pattern that the US provides capital and technologies while China provides labor, resources and markets, has undergone a fundamental change,” Xi pointed out when Biden visited China August of last year.
During his China visit last year, Biden expressed that the US is willing to step up cooperation with China on market access and mutual investment and welcomes and encourages direct investment in the US from Chinese businesses and entities. Apparently, both the US and China have realized that with the acceleration of globalization, competition and cooperation has become an inevitable trend. To pursue cooperation in competition and form new cooperative patterns is the key to a win-win result, and will be the catalyst for developing future economic and trade cooperation between the two countries.