Abstract
Based on the theory of trade added value, this paper discusses the potential actual trade scale and benefit damage degree of the two countries under the background of big country game by measuring the real trade scale of China and the USA, simulating the economic impact of tariffs imposed by China and the USA and utilizing Wang–Wei–Zhu (WWZ) method to decompose the potential changes in Sino-US trade. The results show that: firstly, the size of China-US trade in terms of total value is significantly overestimated and China's overall trade with the USA in 2001–2014 was overestimated by an average of 3.06 percent, of which goods trade was overestimated by 8.06 percent. Secondly, although tariff increases can reduce the degree of trade imbalance between China and the USA to some extent, the adverse effects are mutual and global, and the European Union, the Association of Southeast Asian Nations (ASEAN), Japan and Canada become the main transfer countries of Sino-US trade. Thirdly, the pattern of China's final exports and the US' intermediate exports determines that China's trade interests are more damaged than those of the USA. It is proved that there is a big gap between China and the USA in the depth and breadth of China's participation in the value chain division of labor and the trade scale measured by Gross Domestic Product is more instructive than the total value.
Highlights
The global value chain is undergoing profound changes, and its rapid development has become an important feature of globalization; the rising China has gradually become the backbone of the global value chain
Based on the theory of value-added trade, this paper measures the actual scale of Sino-US trade, uses Global Trade Analysis Project (GTAP) to simulate the situation of Sino-US bilateral tariffs and utilizes WWZ decomposition framework to decompose the changes of Sino-US bilateral trade, bilateral trade and industry
By decomposing the changes of China and the USA, bilateral trade and industry, this paper deeply analyzes the real scale of China-US trade, and makes a detailed analysis of the potential trade scale changes and damage of the two countries and the world under the background of China US trade friction
Summary
The global value chain is undergoing profound changes, and its rapid development has become an important feature of globalization; the rising China has gradually become the backbone of the global value chain. Structure and the reconstruction of global value chain It broke the Sino-US industrial chain division of labor “balance.” The rise of China’s economy has made the longtime "global hegemony" of the USA unilaterally considered threatened and provoked trade disputes. The Sino-US trade dispute represents the result of Sino-US changes in the division of global value chains and reveals the domestic contradictions in the USA. This approach could be a means for the USA to curb China’s peaceful rise in order to form the inherent inevitability of intensification of the trade friction between China and the USA and express the trend of normalization, long-term and complication (Yu Zhen et al, 2018; Li Ji and Luo Ronghua, 2019)
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