Since every other major trading partner extends MFN status to China, revoking MFN would give Japanese and European competitors a competitive edge in developing Chinese markets from the ground up, jeopardizing billions of dollars in future U.S. exports. Although serious trade problems remain, our continued engagement with China has opened up discussion on a range of issues China refused to discuss just a few years ago. In the past year, Chinese authorities have closed over 39 pirate CD factories and seized more than 10 million pirated disks. China's elimination of over 1,000 quotas and licensing requirements on imports of key high-tech U. S. products has contributed to a rise of nearly 200 percent in U.S. exports of telecommunications equipment to China since 1992. The deficit reflects China's specialization in inexpensive, mass-market consumer goods.
China runs bilateral surpluses with Japan and Europe for the same reason.
China's share of U.S. imports rose from 9 percent to 50 percent, while Japan and the Newly Industrialized Economies fell from 51 percent to 5 percent. China's share rose from 22 percent to 54 percent, while Japan and the NIEs declined from 58 percent to 23 percent. China's share rose from 11 percent to 44 percent, while Japan and the NIEs fell from 61 percent to 25 percent. China has accounted for a roughly constant share of the United States' overall trade deficit since 1991. As China grows, the deficit should narrow.