ADJUSTED ESTIMATES OF UNITED STATES–CHINA BILATERAL TRADE BALANCES: AN UPDATE

Abstract.  Large differences exist between the official United States and Chinese data on trade balances between the two countries. In this paper, four adjustments are made to the export and import data of the two governments: (i) freight along side (f.a.s.)-free on board (f.o.b.) and cost, insurance and freight (c.i.f.)-f.o.b. conversions; (ii) re-exports through Hong Kong (and elsewhere); (iii) re-export markups; and (iv) trade in services. After adjustments, our best estimate for the 2005 bilateral trade balance is $US170.7 billion, in China's favour, which is much larger than the official Chinese balance of $US114.2 billion but also much smaller than the official US balance of $US201.6 billion.     

BILATERAL TRADE RELATIONSHIP BETWEEN THE UNITED STATES AND CANADA: IMPLICATIONS OF THE FREE TRADE AGREEMENT

This study's primary objective is to evaluate empirically the economic effects of the U.S.-Canada Free Trade Agreement (FTA). The paper emphasizes bilateral trade flows of agricultural and industrial products between the United States and Canada, given that the FTA removes tariff and non-tariff barriers. It evaluates the FTA's impact on the two countries' trade with third countries. The paper specifies a traditional log-linear trade model consisting of import demand and export supply equations for both agricultural and industrial products. It uses quarterly time-series U.S. and Canadian trade data for 1972–1985.
The study uses the two-stage least-squares estimator to estimate the models. The models had R coefficients ranging from 0.78 to 0.99, indicating that the models' explanatory variables explain most causes of variations in the dependent variable. This study reveals that U.S. imports of agricultural and industrial products from Canada were more sensitive than were Canadian imports not only to import and domestic prices but also to world prices. This is because Canadian consumers have less domestic substitutes than do their U.S. counterparts. Also, Canada has a smaller internal market than does the United States. The study estimates that U.S. imports from Canada will increase $2.8 billion while Canadian imports from the United States will increase $1.2 billion. The impact on the two countries' trade with third-party countries will be insignificant.     

TRADE AND WAGE INEQUALITY: THE HONG KONG CASE

Abstract. This paper examines the effects of Hong Kong–mainland China trade on the wage inequality in Hong Kong. Because of the large volume of trade and the large income disparity between these two regions, this empirical study provides a good test of the theories on North–South trade. The econometric analyses show that the relative wage between the skilled and unskilled workers in Hong Kong increased as the share of the volume of Hong Kong's trade with mainland China in Hong Kong's total trade volume rose.     

FREE TRADE, NATIONALISM, AND THE COMMON MAN: THE FREE TRADE AGREEMENT BETWEEN CANADA AND THE UNITED STATES

This paper discusses the forces that have been at play in the debate over the recently concluded Canada-U.S. Free Trade Agreement. Most economists agree that free trade is desirable and that both parties likely will gain from specialization and exchange. But many objections to this agreement have been raised, some of which are very different from those that economists usually consider. A review of the agreement and many of the arguments raised against it reinforces the basic credo that freer exchange between consenting parties leads to improved economic well-being.     

TRADE LIBERALIZATION AND FIRM PERFORMANCE: THE CASE OF THAILAND

After the Asian Financial Crisis, Thailand's trade policy has been driven by the proliferation of free trade agreements (FTAs). We use firm‐level data to estimate the effects of reductions in tariffs applied to Thai imports on Thai firms. Reductions in Association of Southeast Asian Nations (ASEAN) tariffs were associated with increasing firm employment and exports, lower ASEAN‐China import tariffs were associated with increasing firm employment, while lower tariffs from the Japan‐Thailand FTA were associated with reductions in firm employment and increasing likelihood of International Organization for Standardization (ISO) certifications. FTAs were associated with a decrease in firm R&D spending. (JEL F1, F2, F6)     

UNITED STATES-CHINA TRADE AT THE COMMODITY LEVEL AND THE YUAN-DOLLAR EXCHANGE RATE

In 1978 when China began her economic reforms of moving toward a free market economy and trade liberalization, the trade balance between China and the United States was in favor of the United States in the magnitude of 600 million dollars. Over the 1978–2002 period, however, it has changed in favor of China such that in 2002 China had a surplus of 120 billion dollars against the United States. Over the same period, the Chinese yuan has depreciated almost fourfold. Is real depreciation of the yuan against the dollar a factor in the trade between the two countries? In this article, we employ data at the industry level (88 two‐ and three‐digit industries) and recent advances in error‐correction modeling to show that indeed the real yuan‐dollar rate has played a significant role. This contradicts most previous research that used trade data at the aggregate level. (JEL F31, F32, F14)     

TRADE LIBERALIZATION AND THE MANUFACTURING SECTOR: THE CASE OF THE SMALL DEVELOPING COUNTRY

Historically, the lack of competition in developing countries has resulted in highly concentrated domestic industries that suffer from diseconomies of scale but prosper behind high walls of protection. Liberalization is expected to reverse this trend but at what cost? This article utilizes an import demand framework to examine the potential impact of trade liberalization on the manufacturing sector in the Caribbean using the case of Barbados. The results indicate that the manufacturing industry could encounter tremendous price competition, which could compromise the future survival of these industries. The study recommends that industries reorganize production processes to increase efficiency, which will allow them to compete effectively in the new global trading environment. These results may also be applicable to the wider Caribbean.     

服务外包与产业链长度：来自中国的经验证据*

本文参考Antrs et al（2012）方法，利用中国1997年、2002年、2007年、2012年和2017年投入产出表测度30个省份17个细分行业的产业链长度，并在此基础上分析服务外包对延伸产业链长度的作用。实证结果表明：第一，从整体上看，服务外包对我国产业链长度攀升具有显著促进作用，服务外包每提高10%，可以促进我国产业链长度提升062%。第二，从细分类型的服务外包看，交通仓储外包对产业链长度延伸的促进作用最大。第三，分地区研究发现，服务外包对中部地区产业链长度提升最大，其次是西部地区，东部地区最小。第四，分行业后发现，服务外包对制造业和服务业产业链长度均有提升作用，但是对服务业促进作用是制造业的近2.7倍。     

服务外包与产业链长度：来自中国的经验证据*

本文参考Antrs et al（2012）方法，利用中国1997年、2002年、2007年、2012年和2017年投入产出表测度30个省份17个细分行业的产业链长度，并在此基础上分析服务外包对延伸产业链长度的作用。实证结果表明：第一，从整体上看，服务外包对我国产业链长度攀升具有显著促进作用，服务外包每提高10%，可以促进我国产业链长度提升062%。第二，从细分类型的服务外包看，交通仓储外包对产业链长度延伸的促进作用最大。第三，分地区研究发现，服务外包对中部地区产业链长度提升最大，其次是西部地区，东部地区最小。第四，分行业后发现，服务外包对制造业和服务业产业链长度均有提升作用，但是对服务业促进作用是制造业的近2.7倍。     

TRADE,TECHNOLOGICAL CHANGE,AND WAGE INEQUALITY: THE CASE OF MEXICO

Following the U.S.–Mexico trade integration, the skill premium rose dramatically in Mexico. Standard trade theory predicts the skill premium in a skill‐scarce country should fall—not rise—following such an integration. This article reconciles theory and data by building a model in which intermediate producers in Mexico begin to produce for the U.S. supply chain following liberalization. To do so, they must rent ideas from the United States, which are more skill‐intensive, thus increasing the skill premium. This mechanism is supported by the data: Mexican plants and industries that trade more with the United States rent more U.S. technology and have higher skill premia.     

中国贸易开放与通货膨胀持续性关系研究

本文分别利用修正的综合贸易强度公式和卡尔曼滤波方法估计了中国改革开放以来的贸易开放度和时变的通货膨胀持续性,并在此基础上对中国贸易开放与通货膨胀持续性关系进行了实证研究。结果表明:中国贸易开放度的变化表现出明显的阶段性特征;中国的通货膨胀持续性处于不断波动的过程中,从趋势来看,中国的通货膨胀持续性呈现出不断下降的趋势;贸易开放度的提高对中国的通货膨胀持续性具有显著的负向影响。     

COMPARABLE HOUSEHOLD SAVING RATES FOR CHINA AND THE UNITED STATES

This paper focuses on how the household saving rate should be measured. The current method used in China to measure the saving rate is compared with that used in the U.S. Significant differences in concept and scope are discovered. Using these differences as a basis, we make relevant adjustments to the official measurement and recalculate the household saving rates of the two countries on a comparative scale. Our results show that the average of the Chinese household saving rate during the 1992–2004 period falls from 29.4 to 22.9 percent, and is lower than 20 percent in 2000, 2001, and 2003. The gap between China's household saving rate and that of the U.S. narrows by 8.6 percent on average and the adjusted difference is merely 17.5 percent on a comparable scale. It is therefore reasonable to conclude that the difference between the household saving rates of these two countries is in fact much smaller than is often suggested. Our study also shows that the household saving rates of these two countries are experiencing the same decreasing trend, but that both have increased slightly since 2002.     

财政不平衡与城乡公共服务均等化：理论分析与实证检验*

本文基于中国分税财政体制下中央和地方财政不平衡这一事实分析了政府间的财政关系，并利用省级面板数据和SYS GMM方法实证研究了财政缺口、财政不平衡对城乡基本公共服务均等化的影响效应。结论表明：在分税财政体制下基层政府财政缺口的存在，并不利于缩小城乡基本公共服务均等化，而转移支付作为弥补财政缺口、均衡中央与地方财政不平衡的主要机制，对缩小城乡基本公共服务均等化产生了显著的激励效应。另外，尽管较高的转移支付筹资水平和专项补助方式有助于提高城乡基本公共服务的供给激励，但在我国中央和地方财政不平衡的分税财政体制框架内，这一供给激励机制将会大打折扣。     

财政不平衡与城乡公共服务均等化：理论分析与实证检验*

本文基于中国分税财政体制下中央和地方财政不平衡这一事实分析了政府间的财政关系，并利用省级面板数据和SYS GMM方法实证研究了财政缺口、财政不平衡对城乡基本公共服务均等化的影响效应。结论表明：在分税财政体制下基层政府财政缺口的存在，并不利于缩小城乡基本公共服务均等化，而转移支付作为弥补财政缺口、均衡中央与地方财政不平衡的主要机制，对缩小城乡基本公共服务均等化产生了显著的激励效应。另外，尽管较高的转移支付筹资水平和专项补助方式有助于提高城乡基本公共服务的供给激励，但在我国中央和地方财政不平衡的分税财政体制框架内，这一供给激励机制将会大打折扣。     

INVERSE RELATIONSHIP BETWEEN PRODUCTIVITY AND FARM SIZE: THE CASE OF CHINA

In developing agricultures, past research has suggested an inverse relationship between farm productivity and size. The raw data from China show such an inverse relationship. However, the inverse relationship disappears after we instrument for land area using the fact that one of the objectives of the land allocation process in rural China is to ensure local households to meet their nutritional needs. The empirical inverse relationship is likely due to the failure to account for the unobserved land quality that is unevenly distributed across the farm size continuum, rather than inherent to China's agriculture. (JEL O13, Q12, Q15)     

LONG‐RUN DETERMINANTS OF JAPANESE EXPORTS TO CHINA AND THE UNITED STATES: A SECTORAL ANALYSIS

During the period 1971–2007, Japanese sectoral exports to China and the United States depended on real exchange rate fluctuations and external demand (GDP of the country of destination). This result holds for both geographical destinations and for all six sectors under investigation in this study: foods, textiles, metal products, chemicals, non‐metal products, and machinery and equipment. For both China and the United States and for almost all sectors, the real exchange rate fluctuations and GDP have had the expected effects. Real appreciation of the yen and greater uncertainty derived from increased exchange rate volatility have reduced Japanese exports.