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The main goal of this article is to present to the European reader the implications of the crisis of the Chinese banking system which peaked in August 2015, and triggered a period of high volatility in the US. stockmarket. As a result, trade relations between China and the US. have deteriorated, which raises the question of whether the Chinese economic system will implode and contribute to the global crisis, or whether it can be controlled by Beijing?

The article assumes two things: that subsidies are at the core of US. criticism of Chinese trade priorities; and that to understand recent American-Chinese trade conflicts, we must first review the more general issue of American attitudes towards the subsidizing practices of non-market economies.

The article will conclude with the observation that, in discussing the obvious points that China needs more market-oriented reforms and should be more open to US. trade priorities, we may overlook some other more important problems, such as differences in the business cultures of both countries. So, rather than forcing uncertain compromises, American and Chinese trade experts must develop better problem solving skills and discuss new fields of collaboration.



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