<P> Pascal Lamy cautioned: "The statistical bias created by attributing commercial value to the last country of origin perverts the true economic dimension of the bilateral trade imbalances . This affects the political debate, and leads to misguided perceptions . Take the bilateral deficit between China and the US . A series of estimates based on true domestic content can cut the overall deficit--which was $252 bn in November 2010--by half, if not more ." </P> <P> In early 2012, a dispute over rare earth minerals was brought into the light between the two countries . President Obama made an announcement that the United States would be one of a few countries to file a dispute with China . Amongst the United States, Japan and other Western European countries would also be filing disputes as well . This is simply just one of few disputes between the United States and China . It is believed by many experts, including Chris Isidore, a writer for CNN Money, that "any one of the disputes could damage the economies of both countries as well as the relationship between them ." The dispute was filed, and China was charged with putting unfair restrictions on the exportation of rare earth minerals . These minerals were crucial and in high demand by all countries . President Obama believed the United States should have those minerals in the United States whereas China disagreed . China denied all of the said charges brought forth "saying its rules are defensible on grounds of environmental and economic sustainability, and suggests there would be consequences if the United States presses the case ." It is important to understand the relationship between the United States and China, especially economically . There is not one without the other . China's state news agency commented that "past experiences have shown that policymakers in Washington should treat such issues with more prudence, because maintaining sound China - U.S. trade relations is in the fundamental interests of both sides" </P> <P> From 2003 to 2014, China was a major currency manipulator . Economist C. Fred Bergsten, writing for the Peterson Institute for International Economics, wrote that "During this' decade of manipulation,' China bought more than $300 billion annually to resist upward movement of its currency by artificially keeping the exchange rate of the dollar strong and the renminbi's exchange rate weak . China's competitive position was thus strengthened by as much as 30 to 40 percent at the peak of the intervention . Currency manipulation explained most of China's large trade surpluses, which reached a staggering 10 percent of its entire GDP in 2007 ." During this period, China's currency manipulation was a point of conflict with the United States . Domestic leaders within the United States pressured the Obama administration to take a hard - line stance against China and compel them to raise the value of their currency, and legislation was introduced to the United States Congress calling on the President to impose tariffs on Chinese imports until China properly values its currency . </P> <P> Since 2014, the situation changed dramatically, as China stopped artificially deflating its currency, as the growth in the Chinese economy slowed and Chinese investors made more investments outside the country, leading to a drop in the yuan's value in relation to the dollar, as well as a decline in China's reserves . </P>

Why did friendly relations with china become important at the turn of the century