Energy perspective of Sino-US trade imbalance in global supply chains

Abstract

Abstract The unprecedented global supply chain fragmentation brings an ever-increasing trade imbalance in terms of monetary flows between China and the United States. Associated with the bilateral trade imbalance is the reallocation of resources utilization and environmental stress. In this regard, this study presents an embodied energy model to investigate impacts of Sino-US trade imbalance on global energy use during 2000–2014. Distinguished from previous studies that only evaluate the Sino-US trade based on specific bilateral perspective, this study probes into overall impacts of the Sino-US trade on global primary energy use pattern from the perspective of global supply chains for the first time. A boost to eastbound trade and distinct export industrial structures fuel the unprecedented growth of Sino-US embodied energy trade imbalance, accounting for more than half of the total energy transfers embodied in Sino-US trade. Such imbalance firstly increases sharply from 1956.0 PJ in 2000 to 5265.3 PJ in 2006, followed by a short term decrease to hit a low point at 3267.7 PJ in 2009 because of financial crisis and then a gradual resuscitation with a slower pace in the following years. The exported energy embodied in manufacturing products dominates eastbound flows, whereas energy embodied in agricultural products, technology intensive products and primary energy commodities constitute majority of westbound flows. Due to the dispersed production process in global value chains, more than half of primary energy use embodied in the bilateral trade is geographically exploited in other economies along the supply chain (i.e., Europe, the Middle East and South Asia). Furthermore, security of energy supply is evaluated for the two economies. The results can help predict potential influences of trade conflicts on global energy extraction, illustrating policy implications to make Sino-US trade in line with global energy conservation goals. Considering Sino-US trade's impacts along complex supply chains, distinctive domestic energy conservation measures should give way to global collective and inclusive governance.