The Impact of China’s Import Substitution Policy on Bilateral Trade with the United States

Relevance of the research topic is determined by the growing role of import substitution policy in the development of national economy of the People’s Republic of China and its impact on the structure of bilateral economic relations with the United States. Import substitution allows China to reduce dependence on external supplies while stimulating the development of its own high-tech industries, significantly affecting the trade balance between the two largest global economies. The purpose of this article is to analyze the impact of China’s import substitution policy on bilateral trade with the United States, including assessing its consequences for exports and imports, as well as changes in the trade strategies of both countries. Methodology: the study used statistical data, official reports, and scientific publications, as well as comparative and systemic analysis to identify trends and factors which made an impact on trade and economic relations between the People’s Republic of China and the United States. Scientific novelty: the article singles out specific aspects of China’s import substitution policy of the most significant effect in the context of its impact on trade with the United States, such as high-tech industries and agriculture. The article has advanced for the first time a comprehensive approach to evaluate such impact, taking into account international economic conditions and political tensions. Research results prove that import substitution policy of the People’s Republic of China leads to structural changes in bilateral trade. Namely, it was revealed, that the Chinese strategy of import substitution stimulates the development of domestic production, reducing imports from the United States in several sectors of industries, while China’s exports turned out to be more diversified. The analysis also shows that the United States, in turn, increases trade protectionist policies in response to changes in Chinese policy. The practical significance of the research work refers to the recommendations for government agencies, the business community, and research institutions interested in cooperation strategies and adaptation to new circumstances in global trade, as well as for analysts involved in forecasting potential scenarios in the trade conflict between China and the United States.