Abstract
Based on monthly data from 2005–2012, using the econometric method, this chapter discusses the relationship between US Exports to China and US Imports from China. The empirical results show that there is a long-run cointegration relationship and a one-way causality between the changes of US Exports to China and US Imports from China. The error correction model shows that the short-term fluctuation of US Exports to China would cause the same type of change in US Imports from China. The impulse response function shows that US Exports to China have an important impact on US Imports from China. As a result, vertical specialization could be taken into consideration for a policy of balancing US-China bilateral trade.
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