An Analysis of the Impact of US-China Trade Frictions on Chinese Manufacturing Industries from the Perspective of Trade Gains

Yanfang Lyu (), Linhui Zhao () and Dong Wang ()
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Yanfang Lyu: Institute of Quantitative Economics, Huaqiao University
Linhui Zhao: Institute of Quantitative Economics, Huaqiao University
Dong Wang: School of Business, Minnan Normal University

Journal for Economic Forecasting, 2023, issue 4, 43-56

Abstract: Economies are under the influence of global macroeconomic variables as well as national This paper shows that the impact of US-China trade frictions on the trade gains of Chinese manufacturing industries is a nonlinear effect. The trade gains in the Chinese manufacturing industries exhibit an increasing trend when the average anti-dumping and anti-subsidy duties imposed by the United States on China are relatively low. However, the trade gains decrease as the average anti-dumping and anti-subsidy duties reach higher levels. On the one hand, US-China trade frictions directly undermine trade gains in the Chinese manufacturing industries by elevating its trade costs. On the other hand, trade frictions compel Chinese manufacturing companies to phase out outdated production methods and transform their trade structures. These measures result in long-term improvements and contribute to an increase in the trade gains in the Chinese manufacturing industries. We establish a dynamic semi-parametric panel model to quantify the nonlinear effect of US-China trade frictions. We find that the trade gains of Chinese manufacturing industries can either increase, decrease or remain constant with average anti-dumping and anti-subsidy duties imposed by the United States on China.

Keywords: US-China trade frictions; manufacturing industries; the trade gains; nonlinear effect (search for similar items in EconPapers)
JEL-codes: F10 (search for similar items in EconPapers)
Date: 2023
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