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Re-estimation of China-EU trade balance

Author

Listed:
  • Jiang, Xuemei
  • Kong, Yishu
  • Li, Xinru
  • Yang, Cuihong
  • Chen, Xikang

Abstract

Significant discrepancy exists between official Chinese and EU trade statistics on the magnitudes of the China-EU trade in goods as well as in services. While the discrepancy of China-U.S. trade surplus has been thoroughly studied by scholars and policymakers, the discrepancy of China-EU trade surplus is barely discussed in literatures. This may lead to seriously bias in understanding China-EU trade relationship, and even cause unnecessary trade friction. In this paper, we discuss the reasons behind the discrepancy of China-EU trade and quantify the extent to which the discrepancy is contributed by transportation costs, re-exports and their markups. We also employ the input-output tables of both EU and China, and measure the China-EU trade balance of goods and services in both domestic value-added (DVA) terms as well as in gross terms. The discrepancy of China-EU trade balance in goods (and services) still exists after adjustments, but is significantly reduced. With the adjustments on price and re-exports, in 2016, the discrepancy of China-EU trade in goods and services of Chinese release over EU release would shrink from an initial estimation of US$90.6 billion to an estimation of US$20.4 billion in gross terms, and further to US$15.8 billion in value-added terms.

Suggested Citation

  • Jiang, Xuemei & Kong, Yishu & Li, Xinru & Yang, Cuihong & Chen, Xikang, 2019. "Re-estimation of China-EU trade balance," China Economic Review, Elsevier, vol. 54(C), pages 350-366.
    • Handle: RePEc:eee:chieco:v:54:y:2019:i:c:p:350-366
    DOI: 10.1016/j.chieco.2019.01.008
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    References listed on IDEAS

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    Cited by:

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    2. Lavoie, Nathalie & Joseph, Siny, 2020. "Trade War and Incomplete Labeling Regulation: Lose-Lose Situation for U.S. Consumers," 2020 Annual Meeting, July 26-28, Kansas City, Missouri 304645, Agricultural and Applied Economics Association.

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