February 2018 Trade Bulletin

Highlights of This Month’s Edition

• Bilateral trade: In 2017, the U.S. goods trade deficit with China climbed 8.1 percent on the previous year to $375.2 billion, the highest deficit on record; U.S. services exports to China grow at the slowest rate since 2009 due to a slowdown in tourism to the United States.
• Bilateral policy issues: The Office of the U.S. Trade Representative’s 2017 report on China’s adherence to WTO commitments criticizes China’s noncompliance, noting “it is now clear that the WTO rules are not sufficient to constrain China’s market-distorting behavior.”
• Quarterly review of China’s economy: China’s economy grew 6.9 percent year-on-year in 2017, driven by greater domestic consumption, higher industrial output, and global demand.
• Policy trends in China’s economy: The Chinese government takes steps to discourage bitcoin mining in its latest crackdown on the cryptocurrency; China’s central bank adjusts exchange rate management regime.  
• Sector focus – Chinese Outbound Investment: Chinese investment into the United States drops 35 percent following China’s imposition of capital control measures; newly announced Chinese investment deals in the United States are 90 percent lower in 2017 than 2016; concerns over espionage activity, opaque ownership structures, and a lack of privacy protections for U.S. customers cause HNA and Ant Financial’s U.S. acquisition transactions to flounder and terminate Huawei’s mobile phone partnerships with U.S. carriers.