Reading 6b

Reading 6b - Order Code RS22640 April 10, 2007 Whats the...

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1 For a more detailed discussion of key Sino-U.S. trade issues, see CRS Report RL33536, China- U.S. Trade Issues , by Wayne Morrison, and CRS Report RL31403, China’s Trade with the United States and the World , by Thomas Lum and Dick K. Nanto. Order Code RS22640 April 10, 2007 What’s the Difference? — Comparing U.S. and Chinese Trade Data Michael F. Martin Analyst in Asian Political Economy Foreign Affairs, Defense, and Trade Division Summary There is a large and growing difference between the official trade statistics released by the United States and the People’s Republic of China. According to the United States, the 2006 bilateral trade deficit with China was $232.5 billion. According to China, its trade surplus with the United States was $144.3 billion — $88.2 billion less. This paper examines the differences in the trade data from the two nations in two ways. First, it compares the trade figures at the two digit level using the Harmonized System to discern any patterns in the discrepancies between the U.S. and Chinese data. This comparison reveals that over two-thirds of the difference in the value of China’s exports to the United States is attributable to five types of goods. The second approach to examining the differing trade data involves a review of the existing literature on the technical and non-technical sources of the trade data discrepancies. This report will not be updated. U.S. trade with the People’s Republic of China (China) is becoming increasingly contentious as U.S. bilateral trade deficit rises. 1 Debate over this trade deficit is hampered because of disagreement between the two countries on how large the deficit actually is. According to U.S. figures, the 2006 bilateral trade deficit with China was $232.5 billion. However, according to the Chinese, its trade surplus with the United States was $144.3 billion — $88.2 billion less than the U.S. figure (see Table 1 ). The difference amounts to over one quarter of total trade between the two nations using the U.S. data as the base, or nearly a third of total trade using China’s figures as a base. The size of the bilateral trade deficit also is an issue in proposed legislation addressing trade relations with China. For instance, H.R. 1002, which would impose tariffs on Chinese imports unless China revalues its currency, explicitly lists the U.S.
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CRS-2 2 In this report, export data are valued “free on board,” or F.O.B.; import data are valued including Cost, Insurance, and Freight, or C.I.F. figures for the bilateral trade deficit with China among its findings. Similarly, H.R. 782 and S. 364, which would classify “exchange rate misalignment” or “exchange rate manipulation” as a countervailable export subsidy, both cite bilateral trade deficits as evidence of exchange rate misalignment or manipulation. Comparison of U.S. and Chinese Trade Data
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This note was uploaded on 09/06/2010 for the course ECON ECON0602 taught by Professor Qiu during the Fall '09 term at HKU.

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Reading 6b - Order Code RS22640 April 10, 2007 Whats the...

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