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China–US trade: A global outlier

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  • 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
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    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.

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    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

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