Why Chinese Exports Face so Many Trade Remedy Actions: An Empirical Study Based on Multi‐Country and Multi‐Industry Data

19 Pages Posted: 17 Nov 2016

See all articles by Xiangyu Tian

Xiangyu Tian

Shanxi University of Finance and Economics

Shenxiang Xie

Shandong University of Finance and Economics

Qi Wang

The People's Bank of China (PBC)

Xiaosong Wang

Renmin University of China - School of Economics

Date Written: November–December 2016

Abstract

This paper offers a comprehensive analysis of the reasons for the large number of trade remedy actions taken against China. Using a multi‐country and multi‐industry dataset, the present paper shows that the macroeconomic situation of China's partners has a great influence on the probability of trade frictions arising with China. Moreover, the more powerful the industry is, the more likely it is to take trade remedy actions against China. The empirical results reveal that China has been hurt under the operating mechanism of the WTO, and the number of free trade agreements is negatively related to the initiation and approval of trade remedy actions. Basically, the determinants for countervailing and double remedy measures are identical, while they are different from determinants of antidumping measures. Accordingly, strengthening communication with trade partners will alleviate friction between China and its trade partners. Meanwhile, making use of foreign lobbies' power, actively integrating into the international trading system and participating in regional trade agreements are effective ways for China to deal with the “new normal” of trade frictions.

Keywords: industrial competitiveness, macroeconomic status, preferential trade agreement, trade friction, WTO regime

JEL Classification: B41, D72, F13

Suggested Citation

Tian, Xiangyu and Xie, Shenxiang and Wang, Qi and Wang, Xiaosong, Why Chinese Exports Face so Many Trade Remedy Actions: An Empirical Study Based on Multi‐Country and Multi‐Industry Data (November–December 2016). China & World Economy, Vol. 24, Issue 6, pp. 108-126, 2016. Available at SSRN: https://ssrn.com/abstract=2870121 or http://dx.doi.org/10.1111/cwe.12183

Xiangyu Tian (Contact Author)

Shanxi University of Finance and Economics ( email )

No. 696, Wucheng Road
Taiyuan City, 030006
China

Shenxiang Xie

Shandong University of Finance and Economics ( email )

Erhuan East Road 7366
Jinan, Shandong 250014
China

Qi Wang

The People's Bank of China (PBC) ( email )

No.32 Chengfang Street
Xi Cheng, Beijing 100800
China

Xiaosong Wang

Renmin University of China - School of Economics ( email )

No. 59, Zhongguancun Street
Beijing, Beijing 100080
China

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