IDEAS home Printed from https://ideas.repec.org/a/eee/asieco/v40y2015icp47-58.html
   My bibliography  Save this article

China–US trade: A global outlier

Author

Listed:
  • Thorbecke, Willem

Abstract

This paper investigates whether China's exports to the U.S. are an outlier. Gravity model results indicate that these exports have been more than $100 billion greater than predicted in every year since 2005, and that both processed exports produced within regional value chains and ordinary exports produced using domestic inputs far exceed predicted values. Exports of parts and components from South Korea and Taiwan, the two leading supply chain economies, to China are also outliers. Cointegration evidence indicates that exchange rates throughout the supply chain impact China's exports. While the Chinese renminbi has appreciated since 2005, exchange rates in supply chain countries have depreciated and contributed to China's outsized exports to the U.S.

Suggested Citation

  • Thorbecke, Willem, 2015. "China–US trade: A global outlier," Journal of Asian Economics, Elsevier, vol. 40(C), pages 47-58.
    • Handle: RePEc:eee:asieco:v:40:y:2015:i:c:p:47-58
    DOI: 10.1016/j.asieco.2015.09.001
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1049007815000810
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.asieco.2015.09.001?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Berlemann, Michael & Wesselhöft, Jan-Erik, 2012. "Estimating Aggregate Capital Stocks Using the Perpetual Inventory Method – New Empirical Evidence for 103 Countries –," Working Paper 125/2012, Helmut Schmidt University, Hamburg.
    2. James E. Anderson & Eric van Wincoop, 2003. "Gravity with Gravitas: A Solution to the Border Puzzle," American Economic Review, American Economic Association, vol. 93(1), pages 170-192, March.
    3. Leamer, Edward E. & Levinsohn, James, 1995. "International trade theory: The evidence," Handbook of International Economics, in: G. M. Grossman & K. Rogoff (ed.), Handbook of International Economics, edition 1, volume 3, chapter 26, pages 1339-1394, Elsevier.
    4. Badi H. Baltagi & Peter Egger & Michael Pfaffermayr, 2014. "Panel Data Gravity Models of International Trade," CESifo Working Paper Series 4616, CESifo.
    5. Robert C. Feenstra & Shang-Jin Wei, 2010. "Introduction to "China's Growing Role in World Trade"," NBER Chapters, in: China's Growing Role in World Trade, pages 1-31, National Bureau of Economic Research, Inc.
    6. Thorbecke Willem, 2006. "How Would an Appreciation of the Renminbi Affect the U.S. Trade Deficit with China?," The B.E. Journal of Macroeconomics, De Gruyter, vol. 6(3), pages 1-17, December.
    7. Hsiao Chink Tang, 2014. "Exchange Rate Volatility and Intra-Asia Trade: Evidence by Type of Goods," The World Economy, Wiley Blackwell, vol. 37(2), pages 335-352, February.
    8. M. Hashem Pesaran & Yongcheol Shin & Richard J. Smith, 2001. "Bounds testing approaches to the analysis of level relationships," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(3), pages 289-326.
    9. Yin-Wong Cheung & Menzie D. Chinn & Eiji Fujii, 2010. "China's Current Account and Exchange Rate," NBER Chapters, in: China's Growing Role in World Trade, pages 231-271, National Bureau of Economic Research, Inc.
    10. J. M. C. Santos Silva & Silvana Tenreyro, 2006. "The Log of Gravity," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 641-658, November.
    11. Robert C. Feenstra & Shang-Jin Wei, 2010. "China's Growing Role in World Trade," NBER Books, National Bureau of Economic Research, Inc, number feen07-1.
    12. Willem Thorbecke, 2015. "Measuring the Competitiveness of China's Processed Exports," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 23(1), pages 78-100, January.
    13. Thorbecke, Willem & Komoto, Ginalyn, 2010. "Investigating the Effect of Exchange Rate Changes on Transpacific Rebalancing," ADBI Working Papers 247, Asian Development Bank Institute.
    14. Thorbecke, Willem, 2010. "Investigating the Effect of Exchange Rate Changes on the People's Republic of China's Processed Exports," ADBI Working Papers 202, Asian Development Bank Institute.
    15. James E. Anderson & Mykyta Vesselovsky & Yoto V. Yotov, 2013. "Gravity, Scale and Exchange Rates," NBER Working Papers 18807, National Bureau of Economic Research, Inc.
    16. Jaime Marquez & John Schindler, 2007. "Exchange‐rate Effects on China's Trade," Review of International Economics, Wiley Blackwell, vol. 15(5), pages 837-853, November.
    17. Feenstra, Robert C. & Wei, Shang-Jin (ed.), 2010. "China's Growing Role in World Trade," National Bureau of Economic Research Books, University of Chicago Press, number 9780226239712, August.
    18. Guillaume Gaulier & Françoise Lemoine & Deniz Ünal-Kesenci, 2005. "China’s Integration in East Asia: Production Sharing, FDI & High-Tech Trade," Working Papers 2005-09, CEPII research center.
    19. Iapadre, P. Lelio & Tajoli, Lucia, 2014. "Emerging countries and trade regionalization. A network analysis," Journal of Policy Modeling, Elsevier, vol. 36(S1), pages 89-110.
    20. ., 2010. "Introduction to corruption in the Persian Gulf," Chapters, in: Corruption and its Manifestation in the Persian Gulf, chapter 1, Edward Elgar Publishing.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Berlemann Michael & Wesselhöft Jan-Erik, 2017. "Aggregate Capital Stock Estimations for 122 Countries: An Update," Review of Economics, De Gruyter, vol. 68(2), pages 75-92, August.
    2. Yin-Wong Cheung & Menzie D. Chinn & Xingwang Qian, 2014. "The Structural Behavior of China-US Trade Flows," CESifo Working Paper Series 5123, CESifo.
    3. Thorbecke, Willem & Chen, Chen & Salike, Nimesh, 2021. "China’s exports in a protectionist world," Journal of Asian Economics, Elsevier, vol. 77(C).
    4. Enkang Li & Mengqiu Lu & Yu Chen, 2020. "Analysis of China’s Importance in “Belt and Road Initiative” Trade Based on a Gravity Model," Sustainability, MDPI, vol. 12(17), pages 1-21, August.
    5. repec:zbw:bofitp:2014_023 is not listed on IDEAS
    6. Thorbecke, Willem, 2017. "Investigating Imbalances in Manufacturing Trade," RIEI Working Papers 2017-07, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
    7. Yin-Wong Cheung & Menzie Chinn & Xingwang Qian, 2016. "China–US trade flow behavior: the implications of alternative exchange rate measures and trade classifications," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 152(1), pages 43-67, February.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Willem Thorbecke, 2015. "Enjoying the Fruits of Their Labor: Redirecting Exports to Asian Consumers," Asian Development Review, MIT Press, vol. 32(2), pages 95-114, September.
    2. Willem Thorbecke & Hanjiang Zhang, 2009. "The Effect Of Exchange Rate Changes On China'S Labour‐Intensive Manufacturing Exports," Pacific Economic Review, Wiley Blackwell, vol. 14(3), pages 398-409, August.
    3. Cheung, Yin-Wong & Chinn, Menzie D. & Qian, XingWang, 2012. "Are Chinese trade flows different?," Journal of International Money and Finance, Elsevier, vol. 31(8), pages 2127-2146.
    4. repec:zbw:bofitp:2012_014 is not listed on IDEAS
    5. Thorbecke, Willem, 2017. "How Would a Slowdown in the People’s Republic of China Affect its Trading Partners?," ADBI Working Papers 634, Asian Development Bank Institute.
    6. Thorbecke, Willem, 2017. "Investigating Imbalances in Manufacturing Trade," RIEI Working Papers 2017-07, Xi'an Jiaotong-Liverpool University, Research Institute for Economic Integration.
    7. Dreyer, Heiko & Fedoseeva, Svetlana & Herrmann, Roland, 2016. "Gravity Meets Pricing To Market: What A Combinedmethod Approach Tells Us On German Beer Exports," Working Papers 234640, American Association of Wine Economists.
    8. Yu, Miaojie, 2009. "Revaluation of the Chinese Yuan and triad trade: A gravity assessment," Journal of Asian Economics, Elsevier, vol. 20(6), pages 655-668, November.
    9. Maria Cipollina & Luca De Benedictis & Luca Salvatici & Claudio Vicarelli, 2016. "Policy Measurement And Multilateral Resistance In Gravity Models," Working Papers LuissLab 16130, Dipartimento di Economia e Finanza, LUISS Guido Carli.
    10. Head, Keith & Mayer, Thierry, 2014. "Gravity Equations: Workhorse,Toolkit, and Cookbook," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 131-195, Elsevier.
    11. Brülhart, Marius & Trionfetti, Federico, 2009. "A test of trade theories when expenditure is home biased," European Economic Review, Elsevier, vol. 53(7), pages 830-845, October.
    12. Chen, Liming & Felipe, Jesus & Kam, Andrew J.Y. & Mehta, Aashish, 2021. "Is employment globalizing?," Structural Change and Economic Dynamics, Elsevier, vol. 56(C), pages 74-92.
    13. Juyoung Cheong & Do Won Kwak & Kam Ki Tang, 2016. "The distance effects on the intensive and extensive margins of trade over time," Empirical Economics, Springer, vol. 50(2), pages 253-278, March.
    14. Sayed Gulzar Ganai & Abdul Hamid Mir & Showkat Ahmad Bhat & Javid Ahmad Khan, 2024. "Impacting Instruments for Export Competitiveness: Evidence from India and China in the Global Manufacturing Market," Global Journal of Emerging Market Economies, Emerging Markets Forum, vol. 16(1), pages 130-142, January.
    15. Adelaide Baronchelli & Raul Caruso & Roberto Ricciuti, 2022. "Trade in Small Arms and Light Weapons: Are embargoes effective?," The World Economy, Wiley Blackwell, vol. 45(5), pages 1336-1361, May.
    16. Inmaculada Martínez-Zarzoso, 2019. "The Euro and the CFA Franc: Evidence of Sectoral Trade Effects," Open Economies Review, Springer, vol. 30(3), pages 483-504, July.
    17. Rahman, Mizanur, 2008. "The Impact of a Common Currency on East Asian Production Networks and China’s Exports Behavior," MPRA Paper 13931, University Library of Munich, Germany.
    18. Roberto Patuelli & Maurizio Mussoni & Guido Candela, 2016. "The Effects of World Heritage Sites on Domestic Tourism: A Spatial Interaction Model for Italy," Advances in Spatial Science, in: Roberto Patuelli & Giuseppe Arbia (ed.), Spatial Econometric Interaction Modelling, chapter 0, pages 281-315, Springer.
    19. Bailey, Michael & Gupta, Abhinav & Hillenbrand, Sebastian & Kuchler, Theresa & Richmond, Robert & Stroebel, Johannes, 2021. "International trade and social connectedness," Journal of International Economics, Elsevier, vol. 129(C).
    20. Daude, Christian & Fratzscher, Marcel, 2008. "The pecking order of cross-border investment," Journal of International Economics, Elsevier, vol. 74(1), pages 94-119, January.
    21. de Melo, Jaime & Carrère, Céline & Wilson, John, 2009. "The Distance Effect and the Regionalization of the Trade of Low-Income Countries," CEPR Discussion Papers 7458, C.E.P.R. Discussion Papers.

    More about this item

    Keywords

    Chinese exports; Exchange rate elasticities; Gravity model;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F40 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:asieco:v:40:y:2015:i:c:p:47-58. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/asieco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.