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The Sustainability of Trade Balances in China

Author

Listed:
  • Fengbao Yin

    (Kobe University)

  • Shigeyuki Hamori

    (Kobe University)

Abstract

This study uses nonstationary time series approach to test the sustainability of the current account deficits in China over the period from 1982 to 2009. Our empirical results suggest that, despite the cointegrating relationship between imports and exports in China, the intertemporal external constraints may be violated. Thus, the trade balance surplus experienced over the past several years cannot be sustainable in the future. It is therefore necessary to ensure that an effective policy for controlling changes in trade accounts is established.

Suggested Citation

  • Fengbao Yin & Shigeyuki Hamori, 2011. "The Sustainability of Trade Balances in China," Economics Bulletin, AccessEcon, vol. 31(3), pages 2090-2097.
    • Handle: RePEc:ebl:ecbull:eb-11-00453
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    File URL: http://www.accessecon.com/Pubs/EB/2011/Volume31/EB-11-V31-I3-P188.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    sustainability; trade balances; China;
    All these keywords.

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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