Accounting for the China–US Trade Imbalance: An Ownership-Based Approach

12 Pages Posted: 19 Jul 2010

See all articles by Yiping XU

Yiping XU

affiliation not provided to SSRN

Guijun Lin

University of International Business and Economics (UIBE) - School of International Trade and Economics

Huayu Sun

affiliation not provided to SSRN

Abstract

This paper focuses on measuring the trade imbalance between China and the United States (US) within the framework of the ownership-based approach. It extends the baseline model developed, respectively, by NAS, Julius, and BEA into a three-country framework, consisting of the domestic economy, the foreign economy, and the rest of the world. The results of the study show that the non-US foreign direct investment in China is mostly responsible for China's trade surplus with the US. As a result, China's ownership-based trade surplus is surprisingly small relative to the conventional measure.

Suggested Citation

XU, Yiping and Lin, Guijun and Sun, Huayu, Accounting for the China–US Trade Imbalance: An Ownership-Based Approach. Review of International Economics, Vol. 18, No. 3, pp. 540-551, August 2010, Available at SSRN: https://ssrn.com/abstract=1640839 or http://dx.doi.org/10.1111/j.1467-9396.2010.00882.x

Yiping XU (Contact Author)

affiliation not provided to SSRN ( email )

Guijun Lin

University of International Business and Economics (UIBE) - School of International Trade and Economics

10 East Huixin Street
Chaouang District
Beijing, 100029
China

Huayu Sun

affiliation not provided to SSRN

No Address Available

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