IDEAS home Printed from https://ideas.repec.org/p/cda/wpaper/98-9.html
   My bibliography  Save this paper

The U.S.-China Bilateral Trade Balance: It'S Size And Determinants

Author

Listed:
  • Wing Thye Woo
  • Robert Feenstra
  • Wen Hai
  • Shunli Yao

    (Department of Economics, University of California Davis)

Abstract

This paper has two aims. The first is to reduce the range within which the true U.S.-China bilateral trade deficit lies. The second is to identify the determinants of the bilateral trade deficit, and offer an assessment of their relative importance. We calculate a smaller range of values for the bilateral trade deficit than in previous studies, due to a new estimation method that takes advantage of our access to detailed Chinese Customs data at the commodity level. For example, the revised U.S.-China bilateral trade deficit is $15 billion to $20 billion in 1994, and $16 billion to $22 billion in 1995, compared to the official range of $8 billion to $30 billion, and $9 billion to $34 billion, respectively. The widening of the U.S.-China bilateral trade deficit in recent years reflected many factors. In our opinion, the two chief factors are (i) macroeconomic forces in the U.S. and China moving in opposite directions, causing their respective overall trade balance to move in opposite directions; and (ii) the accelerated relocation of production of U.S. imports from East Asia to China.

Suggested Citation

  • Wing Thye Woo & Robert Feenstra & Wen Hai & Shunli Yao, 2003. "The U.S.-China Bilateral Trade Balance: It'S Size And Determinants," Working Papers 989, University of California, Davis, Department of Economics.
  • Handle: RePEc:cda:wpaper:98-9
    as

    Download full text from publisher

    File URL: http://wp.econ.ucdavis.edu/98-9.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Sheffrin, Steven M. & Woo, Wing Thye, 1990. "Present value tests of an intertemporal model of the current account," Journal of International Economics, Elsevier, vol. 29(3-4), pages 237-253, November.
    2. K. C. Fung, 1998. "Accounting for Chinese Trade: Some National and Regional Considerations," NBER Chapters,in: Geography and Ownership as Bases for Economic Accounting, pages 173-204 National Bureau of Economic Research, Inc.
    3. Liu, Liang-Yn & Woo, Wing Thye, 1994. "Saving Behaviour under Imperfect Financial Markets and the Current Account Consequences," Economic Journal, Royal Economic Society, vol. 104(424), pages 512-527, May.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Sebastián Claro, 2002. "Tariff and FDI Liberalization: What to Expect from China's Entry into the WTO?," Documentos de Trabajo 209, Instituto de Economia. Pontificia Universidad Católica de Chile..
    2. Hering, Laura & Poncet, Sandra, 2009. "The impact of economic geography on wages: Disentangling the channels of influence," China Economic Review, Elsevier, vol. 20(1), pages 1-14, March.
    3. 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.
    4. de Sousa, José & Poncet, Sandra, 2011. "How are wages set in Beijing?," Regional Science and Urban Economics, Elsevier, vol. 41(1), pages 9-19, January.
    5. Bruce A. Blonigen & Alyson C. Ma, 2010. "Please Pass the Catch-Up: The Relative Performance of Chinese and Foreign Firms in Chinese Exports," NBER Chapters,in: China's Growing Role in World Trade, pages 475-509 National Bureau of Economic Research, Inc.
    6. Paweł Młodkowski, 2009. "Poland’s Bilateral Foreign Trade Balances in 1993–2006," Contemporary Economics, University of Finance and Management in Warsaw, vol. 3(2), June.
    7. Wang, Zhi & Gehlhar, Mark & Yao, Shunli, 2010. "A globally consistent framework for reliability-based trade statistics reconciliation in the presence of an entrepôt," China Economic Review, Elsevier, vol. 21(1), pages 161-189, March.
    8. Ping HUA, 2004. "Compétitivité-prix des exportations chinoises sur les marchés des pays industrialisés," Working Papers 200417, CERDI.
    9. San Sau Fung & Marc Klau & Guonan Ma & Robert N. McCauley, 2006. "Estimation of Asian effective exchange rates: a technical note," BIS Working Papers 217, Bank for International Settlements.
    10. Alyson Ma, 2006. "Export Spillovers to Chinese Firms: Evidence from Provincial Data," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(2), pages 127-149.
    11. Fernald, John & Edison, Hali & Loungani, Prakash, 1999. "Was China the first domino? Assessing links between China and other Asian economies," Journal of International Money and Finance, Elsevier, vol. 18(4), pages 515-535, August.
    12. Shunli Yao, 2007. "Chinese agricultural reform, the World Trade Organization and preferential trade negotiations," STUDIES IN TRADE AND INVESTMENT,in: Studies in Trade and Investment - AGRICULTURAL TRADE - PLANTING THE SEEDS OF REGIONAL LIBERALIZATION IN ASIA, volume 60, pages 187-210 United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
    13. Yunfeng, Yan & Laike, Yang, 2010. "China's foreign trade and climate change: A case study of CO2 emissions," Energy Policy, Elsevier, vol. 38(1), pages 350-356, January.
    14. 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.
    15. WEI, Shang-Jin & Liu, Ligang & Wang, Zhi & Woo, Wing T., 2000. "The China money puzzle: will devaluation of the yuan help or hurt the Hong Kong dollar?," China Economic Review, Elsevier, vol. 11(2), pages 171-188, December.
    16. Zhi Wang & Mark Gehlhar & Shunli Yao, 2007. "A Globally Consistent Framework for Reliability-based Trade Statistics Reconciliation in the Presence of an Entrepôt," Trade Working Papers 22715, East Asian Bureau of Economic Research.
    17. Laura Hering & Sandra Poncet, 2010. "Market Access and Individual Wages: Evidence from China," The Review of Economics and Statistics, MIT Press, pages 145-159.
    18. Catherine Co & Patricia Euzent & Thomas Martin, 2004. "The export effect of immigration into the USA," Applied Economics, Taylor & Francis Journals, vol. 36(6), pages 573-583.
    19. Li, You & Hewitt, C.N., 2008. "The effect of trade between China and the UK on national and global carbon dioxide emissions," Energy Policy, Elsevier, vol. 36(6), pages 1907-1914, June.
    20. Hui, George W.L & Hui, Yer Van & Zhang, Anming, 2004. "Analyzing China's air cargo flows and data," Journal of Air Transport Management, Elsevier, vol. 10(2), pages 125-135.

    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cda:wpaper:98-9. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Scott Dyer). General contact details of provider: http://edirc.repec.org/data/educdus.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.