Empirical Estimates for how Changes in China¡¯s Foreign Reserves Are Hurting Chinese Exports and Helping US Exports

Jonathan E. Leightner

International Journal of Financial Research, 2018, vol. 9, issue 2, 55-63

Abstract: This paper estimates the change in China's exports and the change in US exports due to a one dollar increase in China's foreign reserves. The statistical technique used produces reduced form estimates that capture the influence of omitted variables without having to construct and estimate complex structural models. I find that in August 2000 China's accumulation of 621 million dollars of foreign reserves is correlated with China's exports increasing by 151 million and the US's exports falling by 628 million dollars. In contrast, in November 2016, China spending 69 billion dollars of its foreign reserves supporting the value of the yuan is correlated with China's exports falling by 4.77 billion and the US's exports rising by 2.42 billion. Donald Trump's accusation that China is suppressing the yuan exchange rate to help Chinese exports at the expense of US exports did not fit the facts between August 11, 2015 and December 31, 2016.

Keywords: China¡¯s trade surplus; the US¡¯s trade deficit; fixed exchange rates; currency manipulation (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciedu.ca/journal/index.php/ijfr/article/view/13172/8117 (application/pdf)
http://www.sciedu.ca/journal/index.php/ijfr/article/view/13172 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:jfr:ijfr11:v:9:y:2018:i:2:p:55-63

DOI: 10.5430/ijfr.v9n2p55

Access Statistics for this article

International Journal of Financial Research is currently edited by Gina Perry

More articles in International Journal of Financial Research from International Journal of Financial Research, Sciedu Press
Bibliographic data for series maintained by Gina Perry ().