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An Analysis of Core Factors Contributing to U.S – China Trade Imbalance

Author

Listed:
  • Ahmed, Khalid
  • Long, Wei

Abstract

This paper aims to highlight the trade imbalance between United States and China based on the analysis of core factors contributing the imbalance. These factors are comprise of trade inequality, exchange rate issue, difference in basic economic structure of both the countries, and methodology of calculating trade figures. This paper also highlights that where both the countries differ in their point of view on their bilateral trade and why? Beyond doubt this imbalance leads the United States to face huge deficit and China to enjoy the giant surplus in mutual trade. Now, how can we adjust the figures and narrow down the differences? The paper is also discussing the other issues which have reasonable implication on U.S -China trade relations. It also enumerates the future consequences on their bilateral trade keeping in view the current scenario. The importance of this paper is further enhanced as the trade imbalance is also counted as one of the factors of the 2008 recession which is not yet fully over because there is very slow recovery in developed countries and relatively faster in developing countries. The analysis is based on the U.S trade data from 2001 to 2010.

Suggested Citation

  • Ahmed, Khalid & Long, Wei, 2012. "An Analysis of Core Factors Contributing to U.S – China Trade Imbalance," MPRA Paper 44733, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:44733
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    File URL: https://mpra.ub.uni-muenchen.de/44733/1/MPRA_paper_44733.pdf
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    References listed on IDEAS

    as
    1. Ari Van Assche & Chang Hong & Veerle Slootmaekers, 2008. "China's International Competitiveness: Reassessing the Evidence," LICOS Discussion Papers 20508, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
    2. Martin Feldstein, 2008. "Resolving the Global Imbalance: The Dollar and the U.S. Saving Rate," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 113-125, Summer.
    3. Wing Thye Woo, 2006. "The Structural Nature of Internal and External Imbalances in China," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 4(1), pages 1-19.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Imports; exports; Exchange Rate; Economic Structure;
    All these keywords.

    JEL classification:

    • E4 - Macroeconomics and Monetary Economics - - Money and Interest Rates
    • F1 - International Economics - - Trade
    • P0 - Political Economy and Comparative Economic Systems - - General

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