||An Analysis of the Principal Determinants of the US - China Trade Deficit
||Master's Program in Taiwan and Asia-Pacific Studies, College of International Studies (English-Taugh
real exchange rate
||本研究的目的是弄清楚美國跟中國貿易的赤字是否由於不平的貨幣比率或者由於微分的儲蓄率形成。 研究壞繞兩個時期： 1. 1997-2017； 2. 2004-2017. 資料是按照每個月安排的。 根據作者的算， 貿易流的收入效果比較大並且具有時間的穩定性。 進口確定符合經濟的發展， 因此中國的更快的發展會取消跟美國的貿易的赤字。 價格比收入變化得更快。 一般來講， 人民幣的實在的價值跟中國對美國的進口的水準有負面的關係。 從進口與出口價格指數角度來看， 可以發現美國從中國的進口收到進口價格指數的深刻的影響: 價格指數越高，進口容量越低。儲蓄率對GDP不重要或者不屬於期望的效果。中國的FOREX 積累 對美國的出口不會有很大的影響。
||This thesis attempts to answer the question whether the merchandise US trade deficit with China is due to an artificially high exchange rate between the RMB and the US dollar, or whether such deficits are due mainly to differential saving rates. The results encompass two time periods: 1997-2017 and 2004-2017 and the data frequency is monthly. According to the calculations, income effects on trade flows are large and consistent over time. Imports certainly respond to growth in the economy and faster growth in China would help to eliminate the trade deficit with the US. The price variable is less consistent than the income variable. In general, the real value of the RMB is negatively related to the flow of imports from China into the US. With regards to the issue of import and export price indexes, we find that US imports from China are very much impacted by changes in the import price index: a higher price index leads to a lower import flow. Inclusion of saving rates and debt to GDP ratios are either not significant or not signed as expected. Inclusion of variables of forex accumulation by China is not well correlated with exports to US.
||Table of Contents
Chapter 1 Introduction 1
1.1 Research Question 1
1.2 Research Motivation 4
1.3 Research Methodology 7
1.5 Summary of Results 10
Chapter 2 Literature Review 12
2.1 The Problem of Data 13
2.2 Political Aspects of the US-China Trade Deficit 14
2.3 The Elasticities Controversy and the US-China Trade Deficit 16
Chapter 3 Theoretical Issues to Consider 20
3.1 Early US Deficit Experiences 20
3.2 A Closer Look at the Three Basic Theories 21
3.3 Summary of Theoretical Implications 27
Chapter 4. Empirical Model and Findings 31
4.1 The Structure of the Empirical Model 31
4.2 Data and Transformations 34
4.3 Statistical Estimation and Model Validation 49
4.4 Discussion of Empirical Results 54
Chapter 5 Conclusions 64
Appendix 1 69
Appendix 2 79
List of Tables and Figures
Table 1: Summary of Elasticities 18
Table 2: Summary on Elasticities 19
Table 3 Granger Causality Tests 34
Table 4: Granger Causality Tests 34
Table 5: Comparison of Macroeconomics 39
Table 6: Unit Root Tests on Principal Variables – 48
Table 7: Correlations 1997-2017 59
Table 8: Correlations 2004-2017 59
Figure 1 log of Real US Trade with China (1997-2017) 8
Figure 2 The widening trade gap between US and China 12
Figure 3: The Real Exchange Rate of 1 Ream RMB in terms of Real USD 44
Figure 4: US Percentage Trade Deficit/GDP with China 45
Figure 5: Real US Price Indexes for Imports from China and Exports to China 46
||“Accounting for Intermediates: Production Sharing and Trade in Value Added - ScienceDirect.” n.d. Accessed December 17, 2018. https://www.sciencedirect.com/science/article/pii/S002219961100122X.
“Adjusted Estimates of United States–China Bilateral Trade Balances: 1995–2002 - ScienceDirect.” n.d. Accessed December 17, 2018. https://www.sciencedirect.com/science/article/pii/S104900780300040X.
Aiello, Francesco, Graziella Bonanno, and Alessia Via. n.d. “Trade-Elasticities for China and the OECD Countries. Facts and Myths of Global Disequilibria,” 26.
Aziz, Jahangir, and Xiangming Li. 2008a. “China’s Changing Trade Elasticities.” China & World Economy 16 (3): 1–21. https://doi.org/10.1111/j.1749-124X.2008.00111.x.
———. 2008b. “China’s Changing Trade Elasticities.” China & World Economy 16 (3): 1–21. https://doi.org/10.1111/j.1749-124X.2008.00111.x.
Calì, Massimiliano. 2018. “The Impact of the US-China Trade War on East Asia.” VoxEU.Org (blog). October 16, 2018. https://voxeu.org/article/impact-us-china-trade-war-east-asia.
Cheung, Yin-Wong, Menzie D. Chinn, and Xingwang Qian. 2015. “China–US Trade Flow Behavior: The Implications of Alternative Exchange Rate Measures and Trade Classifications.” Review of World Economics 152 (1): 43–67. https://doi.org/10.1007/s10290-015-0232-y.
Cline, William R. 2010. “Renminbi Undervaluation, China’s Surplus, and the US Trade Deficit,” 7.
“Cmstheme_633.Pdf.” n.d. Accessed December 17, 2018.
Dorn, James A. 2008. “The Debt Threat: A Risk to US—China Relations?” The Brown Journal of World Affairs 14 (2): 151–64.
“Download.Pdf.” n.d. Accessed December 17, 2018. http://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.438.5324&rep=rep1&type=pdf.
“Dragon Versus Eagle: The Chinese Economy and US-China Relations - Wei-Chiao Huang - Google Books.” n.d. Accessed December 17, 2018.
Duesterberg, Thomas J. 2015. “A NEW FOCUS: The Future of US Trade.” World Affairs 178 (2): 23–32.
“Economic Integration within Greater China: Trade and Investment Flows Between China, Hong Kong and Taiwan* | The China Quarterly | Cambridge Core.” n.d. Accessed December 17, 2018. https://www.cambridge.org/core/journals/china-quarterly/article/economic-integration-within-greater-china-trade-and-investment-flows-between-china-hong-kong-and-taiwan/5383EFD960A480120588FE3A4936D8D4.
“Effects of Renminbi Appreciation on Foreign Firms: The Role of Processing Exports - ScienceDirect.” n.d. Accessed December 17, 2018. https://www.sciencedirect.com/science/article/pii/S0304387815000565.
Eichengreen, Barry, and Hui Tong. 2011. “The External Impact of China’s Exchange Rate Policy: Evidence from Firm Level Data.” Working Paper 17593. National Bureau of Economic Research. https://doi.org/10.3386/w17593.
“Estimating US-China Trade Elasticities: Some Very Preliminary Results | Econbrowser.” n.d. Accessed December 17, 2018. http://econbrowser.com/archives/2006/11/estimating_usch.
Feenstra, Robert C., Wen Hai, Wing T. Woo, and Shunli Yao. 1999. “Discrepancies in International Data: An Application to China-Hong Kong Entrepot Trade.” American Economic Review 89 (2): 338–43. https://doi.org/10.1257/aer.89.2.338.
Fordham, Benjamin O., and Katja B. Kleinberg. 2011. “International Trade and US Relations with China.” Foreign Policy Analysis 7 (3): 217–36.
Galantucci, Robert A. 2015. “The Repercussions of Realignment: United States–China Interdependence and Exchange Rate Politics.” International Studies Quarterly 59 (3): 423–35. https://doi.org/10.1111/isqu.12178.
Garrison, Jean A. 2007. “Managing the US-China Foreign Economic Dialogue:: Building Greater Coordination and New Habits of Consultation.” Asia Policy, no. 4: 165–86.
Hughes, Neil C. 2005. “A Trade War with China?” Foreign Affairs 84 (4): 94–106. https://doi.org/10.2307/20034423.
“Impact of RMB Appreciation on Trade and Labor Markets of China and the USA: A Multi‐country Comparative General Equilibrium Model - Li - 2011 - China & World Economy - Wiley Online Library.” n.d. Accessed December 17, 2018.
Kang, Joong Shik, JKang@imf.org, Wei Liao, and WLiao@imf.org. 2016. “Chinese Imports: What’s Behind the Slowdown?” IMF Working Papers 16 (106): 1. https://doi.org/10.5089/9781484368626.001.
“Leiming+Hong+Master+Thesis.Pdf.” n.d. Accessed December 17, 2018. https://www.duo.uio.no/bitstream/handle/10852/17136/Leiming%2BHong%2BMaster%2BThesis.pdf?sequence=1.
Li, Xin, and Dianqing Xu. n.d. “The Effect of China’s Real Exchange Rate Appreciation in the Next Decade,” 13.
Marchant, Mary A., and H. Holly Wang. 2018. “Theme Overview: US–China Trade Dispute and Potential Impacts on Agriculture.” Choices 33 (2): 1–3.
Marquez, Jaime. n.d. “Estimating Elasticities for US Trade in Services,” 43.
Quinlan, Joseph, and Marc Chandler. 2001. “The US Trade Deficit: A Dangerous Obsession.” Foreign Affairs 80 (3): 87–97. https://doi.org/10.2307/20050153.
“RIETI - The Exposure of US Manufacturing Industries to Exchange Rates.” n.d. Accessed December 17, 2018. https://www.rieti.go.jp/en/special/policy-update/073.html.
“The China–United States Bilateral Trade Balance: How Big Is It Really? - Fung – 1998 - Pacific Economic Review - Wiley Online Library.” n.d. Accessed December 17, 2018. https://onlinelibrary.wiley.com/doi/abs/10.1111/1468-0106.00040.
“The Role of the World Trade Organization in Shaping China’s International Trade Behavior - ProQuest.” n.d. Accessed December 17, 2018. https://search.proquest.com/openview/96eb232c4f06eaf73b2fce383f2b8182/1?pq-origsite=gscholar&cbl=18750&diss=y.
Thoma, G. A. 1986. “The Structure of Trade Between the U. S. and China.” Business Economics 21 (4): 32–36.
“Us China Import Elasticities - Google Search.” n.d. Accessed December 17, 2018. https://www.google.com/search?source=hp&ei=v4QXXOGULomBoAT_1bvYBg&q=us+china+import+elasticities&btnK=Google+Search&oq=us+china+import+elasticities&gs_l=psy-ab.3..33i22i29i30j33i10.3302.8526..8697...0.0..0.348.4182.12j12j2j3......0....1..gws-wiz.....0..0j0i22i30j0i22i10i30.D5jW_9SLugE.
“US-China Trade Negotiations: Practices, Procedures and Outcomes | SpringerLink.” n.d. Accessed December 17, 2018. https://link.springer.com/article/10.1057/palgrave.jibs.8490548.
Wang, Di. 2015. “An Examination Of The Impact Of Yuan Appreciation On The Sino-US Trade Imbalance.” Thesis, Georgetown University. https://repository.library.georgetown.edu/handle/10822/760934.
“Will There Be a US-China Trade War? A Case Study Analysis - ProQuest.” n.d. Accessed December 17, 2018. https://search.proquest.com/openview/905f1b7c392f9bd410686307a8732c89/1?pq-origsite=gscholar&cbl=18750&diss=y.
Xin, Li, and Dianqing Xu. 2016. From Trade Surplus to the Dispute Over the Exchange Rate: Quantitative Analysis of RMB Appreciation. World Scientific.
Yun, Can. n.d. “GDP Elasticity in China’s Export to the US and Other Countries,” 31.