The US-China Bilateral Trade Balance: Its Size and Determinants

Robert Feenstra, Wen Hai, Wing Woo and Shunli Yao

No 6598, NBER Working Papers from National Bureau of Economic Research, Inc

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 US-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 US-CHINA bilateral trade deficit in recent years reflected many factors. In our opinion, the two chief factors are (i) macroeconomic forces in the US and China moving in opposite direction, causing their respective overall trade balance to move in opposite directions; and (ii) the accelerated relocation of production of US imports from East Asia to China.

JEL-codes: F14 (search for similar items in EconPapers)
Date: 1998-06
Note: ITI PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (26)

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Related works:
Working Paper: THE U.S.-CHINA BILATERAL TRADE BALANCE: IT'S SIZE AND DETERMINANTS (2003)
Working Paper: THE U.S.-CHINA BILATERAL TRADE BALANCE: IT'S SIZE AND DETERMINANTS
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