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A query to the paper “Are the forces that cause China's trade surplus with the USA good?”: A response to Professor Jonathan E. Leightner

Author

Listed:
  • Xiang Dai
  • Erzhen Zhang

Abstract

Purpose - This paper aims to conceptually argue that China's trade surplus with the USA is good by clarifying its fundamental forces from specific perspective. Design/methodology/approach - China's trade surplus with the USA is simply the result of comparative advantage under the background of international intra-product specialization. Being the consequence of global resources optimization allocation, China's trade imbalance, including trade surplus with the USA, is certainly a win-win game in international trade. Findings - There are strong reasons to believe that China's trade surplus with the USA is beneficial to both China and the USA. Originality/value - The forces causing China's trade surplus with the USA are complex and multiple different conclusions may be reached from different perspectives. This paper argues that one of the fundamental forces driving China's trade surplus with the USA is international intra-product specialization, and from this perspective, it can help us understand that China's trade surplus with the USA is good for both nations to some extent.

Suggested Citation

  • Xiang Dai & Erzhen Zhang, 2011. "A query to the paper “Are the forces that cause China's trade surplus with the USA good?”: A response to Professor Jonathan E. Leightner," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(1), pages 45-54, February.
  • Handle: RePEc:eme:ceftpp:v:4:y:2011:i:1:p:45-54
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    References listed on IDEAS

    as
    1. Milton Friedman, 1957. "Introduction to "A Theory of the Consumption Function"," NBER Chapters,in: A Theory of the Consumption Function, pages 1-6 National Bureau of Economic Research, Inc.
    2. Eswar S. Prasad, 2011. "Rebalancing Growth in Asia," International Finance, Wiley Blackwell, pages 27-66.
    3. Jonathan E. Leightner, 2010. "Are the forces that cause China's trade surplus with the USA good?," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 3(1), pages 43-53, February.
    4. Milton Friedman, 1957. "A Theory of the Consumption Function," NBER Books, National Bureau of Economic Research, Inc, number frie57-1.
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