Who is important, China or Taiwan?

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Who is important, China or Taiwan? Free Essay


The answer on the innate question on which country is more important for the US: China or Taiwan can be argued through analyzing different perspectives including economic facts, social interaction, and general ideologies among others. A given state considers a country that creates more trade opportunities by all means significantly important. In the study, a thorough comparison is made between China and Taiwan. Its main goal is to define which country would be dispensable for the U.S. based on the economic benefits. The research dwells on the trade gains that each country offers to the United States and the level of economic stability of these countries. What is more, a comparison is made to determine which of them is more favorable to the US. The economic security of both countries as well as their trade relationhip are used as the means of defining and examining the benefits the United States would yield from investing in the cooperation with either of the states.

Keywords: China, Taiwan, social economy, trade, the US, import, export.


Who is Important for the US: China or Taiwan?

Choosing appropriate partner for cooperation is crucial for a country in terms of its economic perspectives and reputation. Even having the most developed economy in the world, the US is not an exception. The trade relations between the U.S. and China have been long-standing as compared to those between the United States and Taiwan (Shen & Gu, 2007). What is more, the economy of China has far-reaching effect on the US one since it is one of the top three trade partners of America. On the other hand, Taiwan does not rank among the top five business partners, and also, the economic position and stability of China outdo those of Taiwan. Hence, one can make the conclusion that choosing between Taiwan and China, China is more important to the United States. In addition, it seems to have great influence on Taiwanese economy and contact with other countries. Through analyzing their relationship in terms of economic input and output as well as political and social engagement towards the US, this study will try to support the idea of China being more favorable to the US than Taiwan is.

US Trade Relationship with China and Taiwan

First, China is relevant to the US more than Taiwan is based on the trade facts. It is the second-largest economy next to that of the United States globally, and it is a huge commercial partner of the US. Further, it can be claimed that the economies of two countries are intertwined. On balance, US imports more from China even today as compared to the quantity of exports to it (Smith, 2011). China was the biggest provider of products to the US in 2015. What is more, the United States imports from China totaled $482 billion in 2015, which was for 3.2% ($15 billion) more compared with 2014 and for 98% more compared with 2005 (Bao, Lin, & Zhao, 2016, p. 55).The figures reveal how important China is for the U.S. especially in terms of import.

The reason why China is way ahead of Taiwan in the race for relevance to the U.S. can be seen in the position and figures that Taiwan represents when placed against China. Consequently, the comparison reveals that Taiwan ranks ninth among the US import and export partners with products worth $67 billion being exchanged between the countries in 2015 (Lin, 2016). Hence, from Taiwan, the U.S. imports agricultural goods including nibble sustenance, natural products and vegetables, vegetable oils, tea, and herbs among others. These products are the ones, which the US can easily get from an alternative source as compared to merchandises imported from China that require highly-skilled expertise. Therefore, it is evident that China must be preferred to Taiwan. It is based on the fact that as indicated by the business data discussed herein, the U.S. can get many benefits from the cooperation with China, which allows the country to prevail over its counterpart.

Economic Stability of China and Taiwan

The reason that makes China a worthy competitor to Taiwan and more important partner for the US as compared to its competitor is the economic stability of the country. Having examined the economic stability of both states, it becomes visible from the global perspective that currently China posesses a thriving economy, and it is a strong element of attraction for the United States. Trading with a country that is economically stable ensures better chance of gettong profits as well as lesser chance of experiencing economic fluctuations. According to Bao et al. (2016), today, China is the most populous country globally, and even though the high GDP is not the reflection of the country wealth; thus, China still must be recognized for its soaring economy. Even so, it is not the only reason why China would be important for the United States. Bao et al. (2016) claim that the most essential thing is the fact that the trade balance between the U.S. and China is negative, and the capital flow from China partly finances this deficit. In other words, China is placed among the largest creditors of the United States and holds the huge part of America’s treasury security, which amounted to $1,270.3 billion by 2015 (Bao et al., 2016, p. 55). The statistic that has just been explained illuminates the importance of the economy of China to the US one. It offers a clue on how every little or big change taking place in China impacts on the United States both negatively and positively as well as has the capacity to influence global economy overall.

The reason why it would not be costly for the US to lose Taiwan is the fact that its weak economy makes the country profoundly defenseless against the power of its contestant (Shen & Gu, 2007, p. 6-10). Among the reasons for such a situation, there are the moderate gross domestic product development and absence of wages increases. Current gross domestic product growth of Taiwan is in the scope of 0.5 percent to 1 percent, and this development rate is probably going to fall throughout the next year to the level of recession (Lin, 2016). While the unemployment stays low – at around 4 percent (yet somewhat high), the minimum wage level has been fixed over a number of years now with little prospect for development (Knight & Ding, 2012, p.35). Financial troubles of Taiwan do not mirror a short-run repetitive wonders of Keynesian jolts suggested in the standard macroeconomic course books (Arnone & Cottrell, 2004). For Taiwan, in any case, its financial discomfort is likewise being extremely exacerbated by the monetary fighting Beijing is currently pursuing.

Taiwan overwhelming dependence on Chinese exchange has made it exceedingly helpless in opposing the sort of financial struggle, which the Beijing's hard-liners are pursuing now. Since President Tsai Ing-wen was inaugurated on May 20, China has cut a number of its conciliatory lines of correspondence including the “hot line” between Beijing and Taipei (Bao et al., 2016).China, with its vast and extended economy, has an extensive effect on the world economies. Thus, local economic challenges that China faces will probably unfavorably affect the global economy and logjam worldwide financial development (Smith, 2011). The U.S. is one of the nations that are probably going to be influenced by the long-term impact of the Chinese economy to the great extent. Nevertheless, the importance of China to the U.S. is high. In case monetary logjam appears, the US will be antagonistically influenced.

Economic Growth of China and Taiwan

The economic stability of a country is the strong attraction for foreign investors. Even though there is a slight difference between the economic growth of Taiwan and that of China, the latter still outgoes the first in the rate of GDP growth. Subsequently, while Taiwan is struggling to have an independent economy, which is free from the influence of China, the Chinese economy is being considered the second largest one in the world. This circumstance makes it a country the U.S. would desire to partner with. What is more, having initiated the market reforms in 1978, China has become a market-based economy and experienced very rapid economic growth (The World Bank, 2016). The GDP growth of China has risen to the average of 10 percent annually boosting its income generation and helping the country to reach the Millennium Development Goals. The economic stability has the ability to attract the US and other world powers to engage in investment in the Chinese economy (The World Bank, 2016). The position that the country has maintained globally just made it more relevant to the United States. Nevertheless, from the time China emerged on the world economic scene, the country has become a key player in this global sector (The World Bank, 2016). China has overtaken Japan in being the largest export market for the US external from the North American Free Trade Agreement (NAFTA) partners. In addition, the country has displaced Canada as the number-one source of imports. A sample taken in 2007 showed that the amount of China’s exports to the U.S. expanded by 18 percent to $65 billion while the import to the U.S. from China increased by 12 percent to $322 billion (The World Bank, 2016, n. p.).

The economic growth of China is based on its rapid development in IT and investment sectors that provides valid ground for the cooperation with US. One cannot tell the same about Taiwan. The rapid development of China in embracing technology innovation and enhancing industry has boosted the economic growth expanding its relationship with the United States. Most US companies prefer making investment in China to doing it in Taiwan. Probably, the main reason for it is the economic security China offers. What is more, being the second-rated economic growth country, it has managed to take a place in global economic alliances. The US offshores its industries looking for new markets, and the primary target is China due to its rapid economic growth. It is believed that China, unlike Taiwan, offers rapid income growth to foreign industries. Since Taiwan is struggling with its economic growth through new capital investment moves, the country is still losing China in attracting foreign investors.

On this premise, China outgoes Taiwan since the latter, in fact, has unfriendly environment. The Taiwanese business surrounding are likewise confronting the expanded rivalry with its neighbors in the district. Taiwan is on the extremely respectable sixteenth position in the top by Bank’s 2014 Working Report, yet it is below local contenders, for example, Singapore (the first), Hong Kong (the second), Malaysia (the sixth), and Korea (the seventh). In 1980s, the rising work costs and energy about the Taiwanese dollar were frequently referred to as explanations behind the failure of the country to draw in outside organizations with respect to their local companions (Lin, 2016). Today, be that as it may, bureaucratic obstacles, an uncompetitive duty framework, powerless assurance for speculators, frail contract implementations, and generally poor provincial financial combination are the economic elements affecting Taiwan.


Based on Chinese economic condition, many economists consider this counrty to be as of a higher value to the United States when cooparation is considered. However, there are those who are of different opinion telling that Taiwan is one of the most dynamic nations in Asia. Taiwanese authorities take direction at making market oriented policies that can be used for transforming the state, which develops largely because of agriculture. Moreover, Taiwan is one of the key players that contribute positively to the financial development of Asia and provincial unhindered commerce (Chakrabarti & Sharma, 2010). These undertakings may be a reasonable ground for the United States to reinforce their relations with Taiwan as they are likely to be fruitful when contrasted with China that has now achieved the pick of its financial development and, simultaneously, a logjam. The present 12 TPP accomplices represent about 25 percent of Taiwan's fares. With its connection to the creation of supply chains covering Asia and world overall, Taiwan's participation in the TPP could substantially add to financial coordination in Asia and other critical areas. The U.S. ought to consider the advantages of monetary reconciliation with Taiwan. With two-way exchange totaling $63.2 billion in 2012, Taiwan is the eleventh biggest exchanging accomplice of the U.S., its sixteenth largest fare advertiser, and the seventh major goal of the U.S. farming fare (Clark, 2011). Therefore, Taiwan seems an open door for monetary association that should not to be missed.

However, despite all the arguments in support of Taiwan as the best option for the US, it is important to say that the country does not fully meet the economic standard that can adequately draw the US towards it. Since Taiwan is trying to develop the capital investment policies and economic growth, it has ignored diversification in the economy. On the contrary, the Chinese government did it. Taiwan faces surge in export trade, and it disqualifies the country from creating alliance with the US. In addition, Taiwan still depends on China in trade, and it provides the latter with the possibility to develop more intensive relationship with the US.


The importance of China to the US is, by the fact, more intense as compared to the extent, to which America needs Taiwan. China is an economic giant and second after the US the world economy. As indicated, US depends much on China. First, it is connected with import issue. Second, China is one of the top creditors for the US economy. What is more, as shown, everything that affects the economy of China influences that of the United States and world in general. Taiwan, on the other hand, ranks ninth in the trade relations and, therefore, loses China in this race. In addition, the country faces financial challenges and is under strong influence of Chinese government, which makes it feebler international player as compared to China.

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