U.S. bilateral trade with China in “advanced technology products” has shifted from balanced trade in 1998 to a U.S. deficit of $36 billion in 2004. One major explanation for this deterioration lies in an understanding of the growth of China as an advanced technology competitor. This new book presents a detailed, current assessment of the rapid development of Chinese advanced technology investment, production, and trade. Chinese research and development (R&D) growth of more than 20 percent per year and a tripling of university graduates since 1995 are the key domestic resource commitments, while foreign direct investment has been the “decisive catalyst” for a doubling of Chinese global exports from 2001 to 2004.

The book outlines a constructive and comprehensive U.S. policy response needed to maintain long-standing U.S. leadership in advanced technology innovation, production, and exports. Recommendations are offered in the fields of international finance, most importantly with respect to Chinese “currency manipulation”; international trade and investment, principally to achieve Chinese compliance with World Trade Organization obligations and an Asia-Pacific free trade agreement; and domestic economic policy in a number of specific areas, including education, public sector R&D, tax policy, and tort reform.

About the Author

Ernest H. Preeg is Senior Fellow in Trade and Productivity at the Manufacturers Alliance/MAPI. As a career foreign service officer, he was a member of the U.S. delegations to the Kennedy and Uruguay Rounds of trade negotiations and served as Deputy Assistant Secretary of State for International Finance and Development, Chief Economist for the U.S. Agency for International Development, and White House Executive Director of the Economic Policy Group. He also served as American Ambassador to Haiti. Before joining MAPI in 2000, he held the Scholl Chair in International Business at the Center for Strategic and International Studies and was Senior Fellow at the Hudson Institute.

Among his recent publications are: Traders in a Brave New World: The Uruguay Round and the Future of the International Trading System (University of Chicago Press, 1995); Feeling Good or Doing Good with Sanctions: Unilateral Economic Sanctions and the U.S. National Interest (CSIS, 1999); The Trade Deficit, the Dollar, and the U.S. National Interest (Hudson Institute, 2000); From Here to Free Trade in Manufactures: Why and How (Manufacturers Alliance/MAPI, 2003); and U.S. Manufacturing: The Engine for Growth in a Global Economy, co-editor with Thomas J. Duesterberg (Praeger Publishers, 2003).

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