Diesels to dolls, China and US emerge as major trading partners

Who would have guessed that the Cabbage Patch doll craze would have registered the largest percentage increase for all categories of goods the United States purchased from China last year? The sharp rise in the US import of toys and games from China in 1984 (spurred by the purchase of stuffed bodies for Cabbage Patch dolls) is but one trivial detail in the robust picture of US trade with China. It is a picture that augurs well for future US business relations here, Western diplomats say.

According to annual trade statistics released this week in Washington and Peking, trade between the US and China broke a number of important records in 1984.

Two-way trade between the two countries rose by 37 percent to a high mark of a little over $6 billion. This record reversed a three-year decline in trade volume and included nonagricultural products as a healthy 80 percent of the total. Until two years ago, agricultural products accounted for more than half of the two-way trade.

The US is China's third largest trading partner after Japan at $12.3 billion and Hong Kong at $8.5 billion. The Soviet Union came in at a little under $1.2 billion with barter swaps of Chinese food and consumer goods for Soviet heavy industrial equipment. In 1984 China's total foreign trade increased by 20 percent to $50 billion.

The shift away from agricultural products to manufactured goods reflects the needs of China's modernization program and the impact of the US decision to ease restrictions on export licensing for technical products sold to the country.

The big items on last year's list of goods China bought from the United States were wheat, logs and lumber, fertilizers, yarns and fabrics, motor vehicles, and locomotives (General Electric sold 220 diesel engines for about $200 million). Sales in almost all categories of goods increased, with more than a doubling of such items as computers and office equipment, chemicals, synthetic resins and rubber, mining and drilling equipment -- all of which came to over $100 million.

One category with sharply declining sales in 1984 was commercial aircraft, which fell by half to $100 million. US companies have lost out to West European and Soviet manufacturers in recent Chinese purchases of new aircraft.

China's sales to the US landed strongly in two categories -- clothing and textiles ($1.3 billion) and crude oil and petroleum products ($600 million). In the biggest gain of all, sales of toys rose dramatically from $19 million to $105 million, thanks to the Cabbage Patch dolls.

The sore points in US-China trade -- China's failing to meet contract terms on grain purchases and the tightening of US import regulations, which shut out some Chinese textiles -- have been shrugged off as both sides revel in the expanding economic relationship.

There is a disagreement over deficits, however. US government figures show a $60 million deficit against China in 1984, while the Chinese Ministry for Foreign Economic Relations and Trade puts the amount at $1.5 billion. US officials have said that the Chinese ministry is deliberately distorting the figure to gain leverage in trade negotiations.

``China's figures do not include merchandise that is transshipped through Hong Kong or Japan and on to the US. That's a lot of traffic -- perhaps as much as a billion dollars,'' a senior Western diplomat recently told United Press International.

Chinese statistics also omit major trade categories and include insurance and freight costs for imports but not for exports, the diplomat explained.

For 1985, the National Council for US-China Trade projects two-way trade volume at $7 billion. US businessmen should continue to register strong gains in those areas the Chinese government has set as priorities for national development -- energy, transportation, and telecommunications -- say Western diplomats.

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