China's own numbers for the trade deficit with the U.S. are substantially lower, at about $70 billion for merchandise trade in 2002.

As described later in this book, Chinese apparel exports will pick up sharply in the coming years due to the expiration of the multifiber agreement and other factors.

N. R. Lardy, “United States-China Ties: Reassessing the Economic Relationship,” Testimony before the House Committee on International Relations, U.S. House of Representatives, Washington D.C., 21 October 2003.

From instructions by Daniel Webster to Caleb Cushing, his emissary to China, whose mission resulted in the Treaty of Wanghia, signed on July 3, 1844. Annals of American History.

K. Mazurewich, “With New Wealth, China's Tycoons Buy Lost Treasures,” The Wall Street Journal, 14 January 2004: A1.

Foreign investment figures for China are inflated by the inclusion of mainland companies who, in order to obtain incentives and overpass government restrictions, register in Hong Kong only to reinvest on the mainland (so-called “bogus blue eyed” ventures). However, the same is often true for foreign investment in other markets, as evidenced by the appearance of Luxembourg at the top of the UNCTAD foreign investment tables.

Huang, Yasheng, and Khanna, Tarun (2003), “Can India Overtake China?” Foreign Policy, July/August 2003.

Huang, Yasheng, and Khanna, Tarun (2003), “Can India Overtake China?” Foreign Policy, July/August 2003.

Foreign Investment Administration, MOFTEC, 1998, “Tax Exemption Policies on Importation of Equipment by Enterprises with Foreign Investment,” MOFTEC, Foreign Investment Administration. In China in the World Economy, OECD, 2002, Table 10-5.

United States Trade Representative, 2003 report to Congress on China WTO compliance, Washington D.C., December 11, 2003.

United States Trade Representative, 2003 report to Congress on China WTO compliance, Washington DC, December 11, 2003.

K. Kranhold, “Tough Bargain: China's Price for Market Entry: Give Us Your Technology, Too,” The Wall Street Journal, 26 February 2004.

China in the World Economy, OECD, 2002.

P. J. Buckley, J. Clegg, and C. Wang, “The Impact of Inward FDI on the Performance of Chinese Manufacturing Firms,” Journal of International Business Studies, vol. 33 no. 4 (2002): 637–655.

Zixiang (Alex) Tan, “Telecommunications, Technology, and China's Modernization,” Paper presented at the conference on China-Europe Relations in Science and Technology, Rensselaer Polytechnic Institute, Troy, New York, September 4–6, 2003. To appear as a chapter in a forthcoming book, edited by Denis Simon and published by M.E. Sharpe.

China in the World Economy, OECD, 2002.

National Science Foundation (NSF), “U.S.-China R&D Linkages: Direct Investment and Industrial Alliances in the 1990s,” NSF #306 (February 2004). Based on data from the Bureau of Economic Analysis.

United Nations Conference on Trade and Development (UNCTAD), Partnerships and networking in science and technology for development, Geneva, 2002.

National Science Foundation (NSF), “US-China R&D Linkages: Direct Investment and Industrial Alliances in the 1990s,” NSF #306 (February 2004). Based on Thomson Financial Joint Venture/Alliance database.

The World Bank, World Development Indicators, 2002, Table 5.11.

China in the World Economy, OECD, 2002: 789.

Futao Huang, “Policy and Practices of the Internationalization of Higher Education in China,” Journal of Studies in International Education, vol. 7 no. 3 (2003): 225–240.

C. Cao, “Brain Drain/Brain Gain/Brain Circulation and China's High-Level Human Resource Problem,” Paper presented at the conference on China's Emerging Technological Trajectory in the 21st century, Rensselaer Polytechnic Institute, September 4–6, 2003. To be published as a chapter in a forthcoming book edited by Denis Simon and published by M.E. Sharpe.

J. M. Johnson, “Human Resource Contributions to U.S. Science and Engineering from China,” NSF #311 (January 2001).

National Science Foundation, Division of Science Resources Statistics, Survey of Earned Doctorates, 2002.

J. M. Johnson and M.C. Regets, “International Mobility of Scientists and Engineers to the United States—Brain Drain or Brain Circulation?” NSF #316 (June 1998).

C. Cao, “Brain Drain/Brain Gain/Brain Circulation and China's High-Level Human Resource Problem,” Paper presented at the conference on China's Emerging Technological Trajectory in the 21st century, Rensselaer Polytechnic Institute, September 4–6, 2003. To be published as a chapter in a forthcoming book edited by Denis Simon and published by M.E. Sharpe.

H. Choi, An International Scientific Community—Asian Scholars in the United States. (New York: Praeger, 1995).

J. Sigurdson, “China-Europe Relations in Science and Technology,” Paper presented at the conference on China's Emerging Technological Trajectory in the 21st century, Rensselaer Polytechnic Institute, Troy, New York, September 4–6, 2003. To appear as a chapter in a forthcoming book, edited by Denis Simon and published by M.E. Sharpe.

D. F. Simon, “China's High-Tech Thrust: Beijing's Evolving Approaches to the Process of Innovation,” China Economic Review, vol. 1 no. 1 (1989): 73–92.

MOST 1999, Cited in OECD, 2002: 202.

China in the World Economy, OECD, 2002: 206.

Yifei Sun and Hongyang Wang, “Technological Innovation in Rural Enterprises of Jiangsu, China,” Paper presented at the conference on China's Emerging Technological Trajectory in the 21st century, Rensselaer Polytechnic Institute, September 4–6, 2003. To be published as a chapter in a forthcoming book edited by Denis Simon and published by M.E. Sharpe.

Development Research Center, China's State Council, reported in The China Business Review, 6 December 2003; United States Trade Representative, 2003 report to Congress on China's WTO compliance, Washington, D.C., 11 December, 2003.

International Intellectual Property Alliance (IIPA), public comment on the identification of countries under Section 182 of the Trade Act of 1974 to the Office of the United States Trade Representative. Washington, D.C., February 13, 2004.

Daniel C. K. Chow, “Counterfeiting in the People's Republic of China,” Washington University Law Quarterly, vol. 78 no. 1 (2000): 1–57.

Kitty McKinsey, “Watching for Chinese Knock-Offs,” Electronic Business, 1 January 2003: 2–6; International Intellectual Property Alliance, 2003 Special 301 Report, People's Republic of China.

Business Week, 5 June 2002.

United States Trade Representative, 2003 report to congress on China's WTO compliance, Washington, D.C., 11 December 2003.

International Intellectual Property Alliance, 2003 Special 301 Report, People's Republic of China.

Time, 11 June 2001: 35.

International Intellectual Property Alliance, 2003 Special 301 Report, People's Republic of China.

United States Trade Representative, 2003 report to Congress on China WTO compliance, Washington, D.C. December 11, 2003.

Kitty McKinsey, “Watching for Chinese Knock-Offs,” Electronic Business, 1 January 2003: 3.

“Busting Software Pirates,” Time Europe, November 18, 2002, Cited in International Intellectual Property Alliance (IIPA), Public Comment on the Identification of Countries under Section 182 of the Trade Act of 1974 to the Office of the United States Trade Representative, Washington, D.C., February 13, 2004.

R. Buckman, “Blockbuster to Close All Stores in Hong Kong by Mid-2005,” The Wall Street Journal, February 2, 2004: B3.

G. A. Fowler, “Universal's China Business Plan Tries to Neutralize Music Piracy,” The Wall Street Journal, February 27, 2004: B5.

Ira Kalish, “The World's Factory: China Enters the 21st Century,” Deloitte Research, 2003.

“A Survey of Business in China,” The Economist, March 20, 2004.

U.S. Department of Commerce, Special report to the Congressional Textile Caucus on the administration's efforts on textile issues, December 2003.

F. Zhai and S. Li, “Quantitative Analysis and Evaluation of Entry to WTO on China's Economy,” China Development Review 3 no. 2 (2001), Development Research Center of the State Council, People's Republic of China.

Y. Yang, “China's Integration into the World Economy: Implications for Developing Countries,” International Monetary Fund Working Paper, WP/03/245, 2003.

Christopher Rhoads, “China Threat Fashions a Period of Upheaval for Italy's Textile Firms,” The Asian Wall Street Journal, 17 December 2002: A1.

Dan Morse, “Furniture Makers Seek Trade Duties,” The Wall Street Journal, 3 November 2002: A2.

“Furniture Makers Seek Trade Sanctions, CNN Money, 1 November 2003.

“Furniture Makers Seek Trade Sanctions, CNN Money, 1 November 2003.

D. Morse, “In North Carolina, Furniture Makers Try to Stay Alive,” The Wall Street Journal, February 20, 2004: A1; A. Higgins, “As China Surges, It Also Proves a Buttress to American Strength.” The Wall Street Journal, January 30, 2004: A1.

“The Sucking Sound from the East,” The Economist, 26 July 2003: 36.

R. Watkins, “Mexico Versus China: Factors Affecting Export and Investment Competition,” Industry Trade and Technology Review, July 2002.

Division of Trade Statistics, International Monetary Fund, cited in W.M. Cox and J. Koo, “China: Awakening Giant,” Federal Reserve Bank of Dallas, September 2003.

W. Michael Cox and Jahyeong Koo, “China: Awakening Giant,” Federal Reserve Bank of Dallas, September 2003.

Juan Forero, “As China Gallops, Mexico Sees Factory Jobs Slip Away,” The Wall Street Journal, 3 September 2003: A3.

R. Watkins, “Mexico Versus China: Factors Affecting Export and Investment Competition,” Industry Trade and Technology Review, July 2002.

Barbara Kastelein, “Mexico Balks at Growing China 'Invasion,'” Plastics News, vol. 15 no. 4 (24 March 2003).

F. Salim, Presentation at the Institute for International Research in San Diego, CA, March 19, 2002, based on a GE study. Cited in R. Watkins, “Mexico Versus China: Factors Affecting Export and Investment Competition,” Industry Trade and Technology Review, July 2002.

Ira Kalish, "The World's Factory: China Enters the 21st Century," Deloitte Research, 2003.

Joseph B. White, “Unglamorous Axle Maker Is As Good As Gold,” The Wall Street Journal, 10 November 2003: B1.

S. Diesenhouse, “To Save Factories, Owners Diversify,” The New York Times, 30 November 2002: 5.

Melissa Fowler, “Manufacturer Uses Chinese-Made Products to Grow, Dayton Business Journal, 4 August 2003.

D. Morse, “In North Carolina, Furniture Makers Try to Stay Alive,” The Wall Street Journal, February 20, 2004: A1.

The Nippert information has been provided by Chris Nippert, a former executive of the firm and a son of the founder.

E. Ramstad, “Flat-Panel, Plasma TV Sets Bring a Flood of New Brands,” The Wall Street Journal, January 13, 2004: B1.

Kletzer, Lori, “Job Loss from Imports: Measuring the Costs.” Washington DC: Institute for International Economics, 2001.

Ashok D. Bardhan and Cynthia Kroll, “The New Wave of Outsourcing.” Fisher Center for Real Estate and Urban Economics, #1103 University of California, Berkeley, 2003.

“New Opponents of Free Trade,” The Wall Street Journal, 10 October 2003.

Ashok D. Bardhan and Cynthia Kroll, “The New Wave of Outsourcing.” Fisher Center for Real Estate and Urban Economics, #1103 University of California, Berkeley, 2003.

“Job Migration: Is It a Win-Win Game?” McKinsey Global Institute, McKinsey & Company, 2003. The numbers include a high portion of software and other high-tech works, so tiny Israel, for instance, is a destiny for $3 billion in offshored work.

Honeck, J., “International Trade and Job Loss in Ohio,” Policy Matters Ohio, February 2004.

Ashok D. Bardhan and Cynthia Kroll, “The New Wave of Outsourcing,” Fisher Center for Real Estate and Urban Economics, #1103 University of California, Berkeley, 2003.

Hilsenrath, J.E., “Behind Outsourcing Debate: Surprisingly Few Hard Numbers,” The Wall Street Journal, April 12, 2004, A1.

Hira, Ron, Testimony on behalf of the IEEE to the Committee on Small Business. U.S. House of Representatives, 18 June 2003.

“Job Migration: Is It a Win-Win Game?” McKinsey Global Institute, McKinsey & Company, 2003.

The Federal Reserve Bank of Chicago cites a figure of only 13 percent of the sales of China-based U.S. multinationals being shipped back to the United States; it acknowledges that contracts of such affiliates with China-owned plants are not included in the count. See Midwest manufacturing and trade with China, Chicago Fed Letter, The Federal Reserve Bank of Chicago, Essays on Issues #196, November 2003. In addition, with overall sales of China-based affiliates growing, the same percentage will yield more U.S. imports.

There are reasons to believe that this number is understated because of the difficulty of measuring virtual offshoring and the negative political atmosphere surrounding the practice.

Forrester Research; “Job Migration: Is It a Win-Win Game?” McKinsey Global Institute, McKinsey & Company, 2003.

Scott, Robert E., “Fast Track to Lost Jobs.” The Economic Policy Institute. October 2001.

Kletzer, Lori, “Job Loss from Imports: Measuring the Costs.” Washington DC: Institute for International Economics. See also “Trade Balance: Tipping Scales to Add Workers.” The Wall Street Journal, 30 August 2001: A1.

“Job Migration: Is It a Win-Win Game?” McKinsey Global Institute, McKinsey & Company, 2003.

OECD, 1999 Employment Report, chapter 2.

Bulkeley, Willliam M., “IBM Documents Give Rare Look at 'Offshoring,'” The Wall Street Journal, 19 January 2004: A1.

Budman, Matthew, “Looking Ahead to Our Place in the Next Economy,” Across the Board, 16.

Colvin, Jeffrey, “Value Driven,” Fortune. 27 October 2003. Jon E. Hilsenrath and Rebecca Buckman, “Factory Employment Is Falling Worldwide,” The Wall Street Journal, 20 October 2003: A2.

Groshen, Erica L. and Potter, Simon, “Has Structural Change Contributed to a Jobless Recovery?” Current Issues in Economics and Finance, vol. 9 no. 8 (2004). See also Federal Reserve Bank of New York, August 2003. Interview with Erica Groshen in January, 2004.

“U.S. Job Losses 'Not China's Fault,'” The Standard (Hong Kong), 6 December 2003: A4.

“U.S. Blames Job Loss on China,” CNN.com, 8 January 2004.

Bjorhus, Jennifer, “The Tradeoff of Trade with China: Jobs,” Twin Cities.com, Pioneer Press, 27 April 2003.

“Where Free Trade Hurts,” Business Week, 15 December, 2003.

Kletzer, Lori, and Litan, Robert, “A Prescription to Relieve Workers' Anxiety,” Policy Brief 01-2, IIE, February 2001.

Denlinger, Paul, China Business Strategy, 4 September 2003.

“Offshore, Onshore,” The Wall Street Journal, February 26, 2004: B4.

Fisher, A., “Where the Jobs Are Now and How to Get Them,” Fortune.com, March 16, 2004.

Gongloff, M., “Is the Job Market Broken?” CNNmoney, February 9, 2004.

Zeynep Gurhan-Canli and Durairaj Maheswaran, “Cultural Variations in Country of Origin Effects, Journal of Marketing Research, July 2000: 309.

Tracie Rozhon, “Decking the Stores with No-Name Brands, International Herald Tribune, 11 December 2003: 14.

International Trade Commission, “Wooden Bedroom Furniture from China.” Investigation No. 731-TA-1058 (Preliminary), Publication 3667, Washington, D.C. January 2004.

Jill Gabrielle Klein, Richard Ettenson, and Marlene D. Morris, “The Animosity Model of Foreign Product Purchase: An Empirical Test in the People's Republic of China,” Journal of Marketing, vol. 62 no. 1: 89.

Gary S. Insch, “The Impact of Country-of-Origin Effects on Industrial Buyers' Perceptions of Product Quality,” Management International Review, vol. 43 no. 3 (2003): 291–310.

“The Last Sector Where Made in Europe Matters,” Financial Times, 4 December 2003: 16.

Dana Frank, Buy American: The Untold Story of Economic Nationalism (Boston: Beacon Press, 1999), 131–213.

Michael Forsythe, “Wal-Mart's China Goods Fuel U.S. Suppliers' Anger,” International Herald Tribune, 8 July 2003.

Reich, Robert B., “Nice Work If You Can Get It,” The Wall Street Journal, 26 December 2003.

Jefferson, Thomas, “On the Present Need to Promote Manufacturers,” Memoirs, Correspondence, and Private Papers of Thomas Jefferson, 1829, Annals of American History, vol. IV, 276-279.

United States Trade Representative, 2003 report to Congress on China's WTO compliance, Washington, D.C., 11 December 2003.

Cox, Tench, “Prospects for American Manufacturers,” A View of the United States of America, etc., etc., Philadelphia, 1794, Annals of American History, 35-36.

Basken, P. and Forsythe, M., “China's Powerful Friends in High Places,” The Japan Times, Sec. 12, 2003: 19.