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Accounting for discrepancies in bilateral trade: The case of China, Hong Kong, and the United States

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  • Ferrantino, Michael J.
  • Wang, Zhi

Abstract

China's reported exports to the United States have long been smaller than U.S.-reported imports from China. Earlier explanations for this focused on re-exports through Hong Kong, and appeared to account for most of the difference. Now, even after taking Hong Kong into account properly, there has emerged a new and growing discrepancy which amounted in 2005 to $46 billion, perhaps 20% of the "true" value. Comparisons of detailed customs records from China, Hong, Kong, and the United States show that direct exports from Chinese ports and Chinese exports through third countries account for much of the discrepancy, relative to trade flows involving Hong Kong. Transshipment and re-exports through Hong Kong seem no longer to be the major explanation of the discrepancies, especially in recent years. Adjustment for a likely double-counting between re-exports and transshipments make the estimated discrepancy for 2005 increase to $59 billion.

Suggested Citation

  • Ferrantino, Michael J. & Wang, Zhi, 2008. "Accounting for discrepancies in bilateral trade: The case of China, Hong Kong, and the United States," China Economic Review, Elsevier, vol. 19(3), pages 502-520, September.
  • Handle: RePEc:eee:chieco:v:19:y:2008:i:3:p:502-520
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    References listed on IDEAS

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    Cited by:

    1. Victor Abola & Deborah Sy & Ryan Denniston & Anthony So, 2014. "Empirical measurement of illicit tobacco trade in the Philippines," Philippine Review of Economics, University of the Philippines School of Economics and Philippine Economic Society, vol. 51(2), pages 83-96, December.
    2. repec:eme:ceftpp:v:9:y:2016:i:3:p:177-189 is not listed on IDEAS
    3. Dietzenbacher, Erik & Pei, Jiansuo & Yang, Cuihong, 2012. "Trade, production fragmentation, and China's carbon dioxide emissions," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 88-101.
    4. Mohammad Farhad & Michael Jetter & Abu Siddique & Andrew Williams, 2018. "Misreported Trade," CESifo Working Paper Series 7150, CESifo Group Munich.
    5. Iris Day, 2015. "Assessing China’s Merchandise Trade Data Using Mirror Statistics," RBA Bulletin, Reserve Bank of Australia, pages 19-28, December.
    6. Ferrantino, Michael J. & Liu, Xuepeng & Wang, Zhi, 2012. "Evasion behaviors of exporters and importers: Evidence from the U.S.–China trade data discrepancy," Journal of International Economics, Elsevier, vol. 86(1), pages 141-157.
    7. Shaar, Karam & Baharumshah, Ahmad Zubaidi, 2016. "US-China trade and exchange rate dilemma: The role of trade data discrepancy," Working Paper Series 5145, Victoria University of Wellington, School of Economics and Finance.
    8. Francisco Benita & Carlos M. Urzúa, 2016. "Mirror trade statistics between China and Latin America," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 9(3), pages 177-189, October.
    9. Temesgen Worku & Juan P. Mendoza & Jacco L. Wielhouwer, 2016. "Tariff evasion in sub-Saharan Africa: the influence of corruption in importing and exporting countries," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 23(4), pages 741-761, August.
    10. Shaar, Karam & Baharumshah, Ahmad Zubaidi, 2016. "US-China trade: Who is telling the truth?," Working Paper Series 5146, Victoria University of Wellington, School of Economics and Finance.
    11. repec:gam:jsusta:v:10:y:2018:i:5:p:1348-:d:143358 is not listed on IDEAS

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