Foreign Trade Dependence Research Articles

Influencing factors on ecological efficiency: Based on 11 cities in Zhejiang Province, China.

Ecological efficiency (eco-efficiency) is the effectiveness of ecological resources in meeting human needs and is a good representation of the quality of a region's development. The traditional concept of improving eco-efficiency refers to maximizing economic benefits by minimizing resource costs and environmental loads. This article argues that the goal of eco-efficiency evaluation is not only to maximize economic benefits but also to achieve high-quality and coordinated development in many aspects so that more people can enjoy the fruits of development. Therefore, in the evaluation system of eco-efficiency, the input indexes take into account the consumption of human, energy resources, and the environmental load caused by them in a region. The output indexes take into account the four dimensions of "economy, innovation, social harmony, and openness." This study first establishes the nonexpected output superefficiency slacks-based measure model under the assumption of variable returns to scale to measure eco-efficiency in 11 cities of Zhejiang Province, China. Second, the spatial and temporal trends of eco-efficiency are studied with the help of the Malmquist index model. Moreover, regression analysis was conducted using the panel Tobit method to discuss the influencing factors of eco-efficiency. Several key results were obtained in this study: (1) The overall eco-efficiency in Zhejiang Province is rising steadily, but there are serious regional imbalances. (2) The improvement of eco-efficiency mainly relied on the scale efficiency from 2008 to 2013, but on pure technical efficiency from 2013 to 2018. (3) The share of tertiary industry, the number of scientific researchers, and the foreign trade dependence positively affect the improvement of eco-efficiency, but highway transportation mileage has a negative impact on the improvement of eco-efficiency. Integr Environ Assess Manag 2023;19:139-151. © 2022 SETAC.

The Impact of Foreign Trade and Urbanization on Poverty Reduction: Empirical Evidence from China

Poverty eradication is a worldwide development challenge, and China’s poverty reduction experience, evident in its sustainable development strategy, is receiving increasing attention. China has achieved high economic growth and success in poverty reduction over the past 40 years, since its reform and opening up. China’s experience can provide lessons for other countries, however, the situation of poverty in China is still severe, and the remaining people experiencing that condition have long been in a state where income poverty, capability poverty, and intergenerational transfer of poverty coexist. This requires systematic poverty reduction in multiple fields such as the following: population, production, consumption, capital, technology, finance and taxation, education, health care and environment. Foreign trade and urbanization are the best ways to implement poverty reduction. Despite the fruitful results of international studies, the impact of foreign trade, urbanization and their synergistic effects on poverty reduction have not been fully considered. Therefore, by selecting, as panel data, the urbanization rate, foreign trade dependence, and multiple dimensions of poverty indicators of different provinces in China from 2000 to 2017, this paper establishes regression models to study the poverty reduction effects of urban and rural areas. This is accomplished by focusing on three dimensions: poverty gap; income level and gap; and the numbers of under-insurance and guaranteed expenditure, in terms of both imports and exports, respectively. The paper not only considers the synergistic effects of foreign trade and urbanization on poverty reduction, but also investigates the heterogeneity of poverty reduction effects between urban and rural areas. The research results can be applied not only to poverty reduction policy formulation in China, but they can also provide empirical lessons for other developing countries with large urban-rural disparities. Therefore, the study has important implications for both poverty reduction theory development and poverty reduction policy formulation.

ГЛОБАЛИЗАЦИЯ ВО ВЬЕТНАМЕ: ЕЕ УСПЕХИ И РИСКИ В КОНТЕКСТЕ ПРОДОВОЛЬСТВЕННОЙ БЕЗОПАСНОСТИ

The article analyses the impact of changes in the Vietnamese consumer market on the country’s foreign trade relations, based on data from the General Statistics Office of Vietnam and the International Trade Centre. The focus of the study is the vietnamese food market. The main part of the paper consecutively discusses Vietnam’s achievements in addressing hunger and food security, changes in eating habits caused by economic growth and globalization, consequent shifts in production and imports of certain types of food. It is concluded that consumption patterns in Viet Nam are characterised by a moderate westernisation with an increasing proportion of meat and dairy products and wheat in the diet. Due to natural climatic and geographical constraints, the identified changes stimulate imports and pose the risk of foreign trade dependence and loss of food security.

Examining the Degree of Foreign Trade Dependence and Its Influence on GDP Growth

Contemporary international economic environment registers an increasing relationship and interdependence of countries regardless of the degree of their development. In the open economy, the development of foreign trade mainly implies the growth of gross domestic product (GDP). The basic goal of this paper is to examine the influence and effects of trade dependence on GDP. Trade dependence is used to describe a country for which exports and imports are very important. This coefficient also shows the degree of national economy openness. The analysis included the area of Bosnia and Herzegovina for the period 2010-2018, whereby the relevant statistical data were processed for export, import, GDP, as well as the selected coefficient of foreign trade dependence. The results showed the existence of a short-term or long-term relationship between GDP and the total export and import, as well as between GDP and export.

China’s Eco-Efficiency: Regional Differences and Influencing Factors Based on a Spatial Panel Data Approach

From the Kyoto Protocol to the Copenhagen Conference and the Paris Agreement, eco-environmental problems have gradually become a matter of common concern worldwide. Eco-efficiency (EE) is an essential indicator for measuring levels of sustainable development. This study uses an epsilon-based measure (EBM) model with undesirable outputs to evaluate the EEs of 30 Chinese provinces during the research period 2008 to 2017, and a spatial Durbin model (SDM) to search for the impact factors of EE. The results indicate that most provinces in China have a low EE level. The EE value of the eastern area is higher than are those for the central, western, or northeastern areas. The EE in China as a whole demonstrates an inverted V-shaped trend with a high point in 2011. The SDM shows that economic development level, foreign trade dependence, and technological progress exert significant positive effects on EE, while population density exerts significant negative influences on EE. This paper provides scientific bases for the formulation of policies resulting in sustainable development.

我国外贸依存度的灰色关联度分析及灰色马尔科夫预测

我国外贸依存度的灰色关联度分析及灰色马尔科夫预测

Multi-Time Scale Spillover Effect of International Oil Price Fluctuation on China’s Stock Markets

With the continuous increase of China’s foreign-trade dependence on crude oil and the accelerating integration of the international crude oil market and the Chinese finance market, the spillover effect of international oil price fluctuation on China’s stock markets increasingly attracts the attention of the public. In order to explore the impact of international oil price fluctuation on China’s stock markets and the time-varying spillover differences of industry sectors, this study proposes three research hypotheses and constructs a multi-time scale analysis framework based on wavelet analysis and a time-varying t-Copula model. In this paper, we use the Shanghai Composite Index as the representative of a general trend of the stock market, and we use the stock index of the China Securities Industry as the counterpart of industrial sectors. Based on the data from 5 January 2005 to 31 May 2020, this paper measures and analyzes the spillover effect of international oil price fluctuation on China’s stock markets, under different volatility periods. The results show that, firstly, the spillover effect of international oil price fluctuation on the Chinese stock markets is different. In the short and medium volatility period, the changes in international oil price are ahead of the changes in the Chinese stock markets, while the latter is ahead of the former under long-term fluctuations. Secondly, the spillover effect of international oil price fluctuation on China’s industry stock indexes is persistent. As the time scale increases, the tail dependency will increase. Finally, the impact of risk events aggravates the volatility of the stock markets in the short-term, while the mid- to long-term impact mainly affects the volatility trend. Investment risk control can make overall arrangement on the basis of the characteristics of oil price impact under different fluctuation stages.

Green economic efficiency and its influencing factors in China from 2008 to 2017: Based on the super-SBM model with undesirable outputs and spatial Dubin model

Due to the pressure of global ecological degradation, the coordination of economic increase and ecological protection has drawn attention from policymakers and practitioners. Green economic efficiency (GEE) is a comprehensive index to measure economic, social, and environmental development. As China is the second-biggest economy in the world with high-energy consumption, it is necessary to investigate its green economy efficiency. In this paper, we innovatively adopt a super-SBM (slacks-based measure) model with undesirable outputs to calculate the GEE in 30 provinces of China between 2008 and 2017, and then comprehensively apply a spatial Dubin model (SDM) to investigated its influencing factors. The results showed that the overall GEE in China during the study period was at a low level with significant regional differences. The inter-regional GEE generally showed a gradient decreasing pattern of “East-Middle-West”, which demonstrates a gradual decline from the East to the West in China. The trend of the national GEE initially dropped and then gradually stabilized over the study period. Foreign trade dependence and direct investment had significant positive effects on the GEE, while the secondary industry and urbanization level had a significant negative effect.

Can China’s underdeveloped regions catch up with green economy? A convergence analysis from the perspective of environmental total factor productivity

As the weak effect of previous economy catch-up policies in the context of growth traps in underdeveloped regions, this paper contributes to the knowledge area of establishing a coordinated economy-environment developing mode that aims at green economy catch-up from the perspective of long-term convergence of environmental total factor productivity (ETFP). To verify the feasibility of this convergence as a practical path for green economy catch-up, we investigate the existence of conditional β-convergence and the effect of its convergence conditions through comparing Eastern, Central, Western, and Northeastern China with the aid of convergence model. Empirical results indicate that club convergence of ETFP has not appeared in these four regions, thus supporting the existence of conditional convergence. Further analysis shows when ETFP increases by 1%, the foreign trade dependence, pollution intensity, and input biases on ETFP as convergence conditions in China will decrease by 29.5%, 40.32% and 91.74%, respectively. However, it exists heterogeneous embodiments of convergence conditions among four regions. What’s more, unskilled human capital, energy structure, and foreign trade dependence all significantly act on ETFP growth with marginal effect as 0.0012, 0.0039, and −0.012 in China’s underdeveloped regions (Western and Northeastern provinces), respectively. Overall, our findings reveal that the input of human capital, greenization criterion, and international openness should be viewed as important factors for green economy catch-up in China’s underdeveloped regions.

Understanding the trend of total factor carbon productivity in the world: Insights from convergence analysis

Improving carbon emission performance is widely regarded as one of the most cost-effective ways to combat clime change. This paper employs a parametric Malmquist index approach to measure total factor carbon productivity in 88 economies over the period of 1975–2013. Then, we explore the trend of carbon productivity with the log t regression test and identify potential convergent clubs. Furthermore, the Ordered Probit model is employed to examine the factors affecting the club convergence of carbon productivity growth. The main findings are as follows: (1) the carbon productivity on average increased by 63.5% during the sample period, mainly driven by technological progress; (2) the developed countries performed better than the developing countries. Meanwhile, the developed economies were far ahead in terms of technological progress, while the developing ones have performed slightly better in terms of carbon efficiency improvement; (3) although the whole sample did not show convergent trend, five convergence clubs formed with significant differences in carbon productivity growth; (4) the economies with higher GDP per capita and R&D investment tended to converge to the club with a higher carbon productivity, while the economies with higher energy intensity and foreign trade dependence tended to converge to the club with a lower carbon productivity. Finally, we draw some important policy implications.

The Threshold Effect of Environmental Regulation, FDI Agglomeration, and Water Utilization Efficiency under “Double Control Actions”—An Empirical Test Based on Yangtze River Economic Belt

In this study, the SE-SBM model considering undesirable outputs was used to measure the water utilization efficiency of the Yangtze River Economic Belt from 2006 to 2016, and the panel threshold model was used to estimate the impact of environmental regulation and foreign direct investment (FDI) agglomeration on water utilization efficiency. The results show that the water utilization efficiency presents a “U”-shaped trend as a whole, declines incrementally along the eastern, central, and western regions of the economic belt, and that the water utilization efficiency of the economic belt first converges and then diverges. In the estimation of the double threshold panel model, when the per capita GDP is lower than 2.635 or greater than 12.058 thousand dollars, the environmental regulation shows a significant positive effect. Otherwise, the environmental regulation barely shows a significant negative effect. FDI has not had a great impact on water resources utilization efficiency, and neither the “pollution aura” nor “pollution shelter” are significant. When the per capita GDP is lower than 2.184 or greater than 12.058 thousand dollars, FDI can significantly improve the water utilization efficiency through environmental regulation. Besides, the positive effects of technological innovation and foreign trade dependence are significant, and so are the negative effects of industrialization. Differentiated environmental regulation policies should be formulated; industrial upgrade should be promoted; innovation of water-saving and emission reduction should be strengthened in the Yangtze River Economic Belt.

A Statistical Model for China's Degree of Foreign Trade Dependence

This study studies China's degree of Foreign Trade Dependence (FTD), which shows a persistent increasing tendency from 1981 to 2009. The speed and scope of its increasing exceed those of many other countries since the practicing of the reform and open policy. One of the reasons we cannot ignore is the rapid development of processing trade. To analyze this influence, we use an exponential model and a quadratic model to analyze some data sets of trade. Finally we result that the processing trade can explain our high FTD to a great extent, but the levels that FTD depends on processing trade are not the same in different periods.

RETRACTED: IoT study on the total risk management and cluster-coordinated development based on synergy theory

Abstract Based on the new perspective of the financial crisis contagion channel of the international listed companies, this Paper aims to a real-time, targeted and international financial risk warning index system of listed companies and synthesize the financial stress index of listed company that adapt to China’s situations from such three dimensions as foreign exchange market, banking industry and stock market. The empirical study of financial risk early warning in Chinese listed companies based on the Markov regime-switching model has shown that the M2/GDP growth rate, the volatility of stock market and the foreign trade dependence have a positive relationship with the current financial risk of the listed companies in China; stock market returns and foreign exchange reserves/GDP have inverse relationship with the financial risks of listed companies; the financial risks of listed companies in China mainly come from the excessively loose monetary policy during the crisis and the imperfection of the stock market and its regulatory system. The forecast shows that China will be in the state of low financial risk in listed companies from 2014 to 2015.

The Relationship between Trade Freedom and Gender Discrimination in Industrial Employment - Based on the Research of Multinational Panel Data

This paper is based on the multinational panel data of 226 countries and regions from 1985 to 2016, using the ratio of industrial female employees to industrial male employees to measure gender discrimination in industrial employment, measuring the degree of trade freedom forwardly and reversely by foreign trade dependence and MFN weighted average tariff rate respectively, analyzing the impact of trade freedom on the ratio of industrial employment of women to men by empirical test. The lag phase of foreign trade dependence and weighted MFN weighted average tariff rate are used as the instrumental variables of the two models to deal with the endogeneity problem. The empirical result shows that increasing the degree of trade freedom will reduce the ratio of industrial female employees to industrial male employees, so trade freedom aggravates the gender discrimination in industrial employment.

Regional Economic Resilience: Resistance and Recoverability of Resource-Based Cities during Economic Crises in Northeast China

This paper quantitatively analyzes the economic resilience of resource-based cities (RBCs) in Northeast China in terms of resistance and recoverability during two economic crises: the Asian financial crisis and the global financial crisis. Moreover, it analyzes the main factors that affected regional resilience. There are three main findings. First, the RBCs in general demonstrated poor resistance during both recessions, but there were variations among the different types of RBCs. Petroleum and metal cities demonstrated the most resistance, whereas coal cities performed the worst. Second, the influential factors affecting economic resilience varied across the two economic cycles, but location advantage, research and development (R and D) intensity, foreign trade dependence ratio, and supporting policies had positive effects on resilience during both economic cycles, while the proportion of employed persons in resource industries had a negative effect. Industrial diversity had a weak and ambiguous effect on resilience. Third, the secondary industry was more resilient during the Asian financial crisis, but the tertiary industry was more resilient during the global financial crisis. This shift may be attributed to both the nature of the crises and the strength of the sectors at the time of the crises.

Türkiye İle BRICS Ülkeleri Arasındaki Dış Ticaret İlişkileri: Girdi-Çıktı Yöntemi İle Bir Analiz

Anahtar Sozcukler: BRICS Ulkeleri, Girdi-Cikti Modeli, Girdi-Cikti Tablolari ve Analizi, Kilit Endustriler, Uluslararasi TicaretKeywords: BRICS Countries, Input-Output Models, Input-Output Tables and Analysis, Key Industries, International Trade1. GirisDis ticaret, ulkelerin ekonomik gelisimi acisindan onem arz etmektedir. Turkiye ekonomisi 1980'li yillardan itibaren, tum dunyada oldugu gibi dis ticaretteki liberallesme politikalari ile birlikte ihracata yonelik bir sanayilesme stratejisi izlemistir. Izlemis oldugu dis ticaret politikasina bagli olarak da hem ihracat hem de ithalatta onemli miktarlarda artis meydana gelmistir.Turkiye ekonomisi, cografi ve tarihsel yakinligi nedeniyle dis ticaretinin buyuk bir bolumunu Almanya, Ingiltere, Italya, Fransa gibi Avrupa Birligi ulkeleriyle gerceklestirmektedir. Avrupa Birligi ulkelerinden sonra basta Rusya, Cin, ABD olmak uzere diger gelismis ve gelismekte olan ulke ekonomileriyle de dis ticaret faaliyetlerini ilerletmeye calismaktadir. Dolayisiyla cesitli ulkelerle ticari isbirliklerini gelistirmeye yonelen Turkiye ekonomisi farkli piyasalarla ticari faaliyetleri arttirarak bolgesel guc olmaktan ziyade, dunya ekonomisi icerisinde diger gelismis ekonomiler ile rekabet eden bir ulke olmayi amaclamaktadir. Bu amaca bagli olarak da farkli ulkelerle ticari isbirlikleri gelistirerek ekonomik buyume ve refah duzeyini arttirmaya yonelik uygulamalar ortaya koymaktadir.Dis ticaret faaliyetleri acisindan BRICS ulkeleri (Brezilya, Rusya, Cin ve Hindistan) ile Turkiye arasindaki iliskileri degerlendirdigimizde, uye ulkeler icerisindeki Rusya ve Cin, diger uye ulkelere gore Turkiye'nin onemli ticaret ortaklari olarak karsimiza cikmaktadir. Cin, 2015 yili itibariyle %12 ile Turkiye'nin en fazla ithalat yaptigi birinci ulke olurken, Rusya ise %9.8 ile ucuncu ulke konumundadir (TUIK, 2016). Diger ulkelerin payi ise sinirli duzeyde olup, cografi uzaklik bu payin sinirli olmasinda onemli bir faktor olarak nitelendirilebilmektedir (Ersungur ve Ekinci, 2015: 721). Turkiye ekonomisi, Rusya ve Cin disinda diger uye ulkelerle isbirliklerini gelistirerek ve bu ulkelerdeki yatirimlarini arttirarak, dis ticaret acisindan daha etkin bir rol oynayabilecegi ve ayni zamanda hem Rusya hem de Cin'e yapmis oldugu ihracat hacmini arttirarak BRICS ulkeleri ile olan ticaret hadlerini kendi lehine cevirebilecegi soylenebilir.Bu calismanin amaci, BRICS ulkeleri ve Turkiye'nin Girdi-Cikti Akim tablolarini kullanarak yillara gore, bu ulkeler arasindaki endustriler arasi ara girdi alim-satimlarina bagli olarak dogrudan veya dolayli bir sekilde ortaya cikan etkileri ortaya koymak ve ithalata bagimliligi belirleyerek, bagimliligin meydana getirdigi degisimleri yillara gore incelemektir. Ayni zamanda, yapilan analiz sonucunda Turkiye ile BRICS ulkeleri arasinda ticaretin yapisina yonelik olarak oneriler sunulmasi amaclanmaktadir. Calisma hem Turkiye'nin hem de BRIC ulkelerinin kilit sektorleri ve ithalata bagimli olan sektorlerini belirlemek acisindan onem arz etmektedir. Bu, kilit sektorler belirlenerek aralarindaki ticaret iliskilerinin gelistirilmesi hususunda daha etkin politika onerileri soylenebilir. Calismada kullanilan veri seti World Input-Output Database (WIOD)'dan elde edilmistir. Turkiye ve BRIC ulkelerinin 1995, 2000, 2005, 2008 ve 2011 yillarina ait Girdi-Cikti tablolari kullanilarak analizler yapilmis, ulkelerin kilit endustrileri ve ithalata bagimli sektorleri belirlenmistir.Calismada oncelikle BRICS kavraminin nasil ortaya ciktigi, ticari iliskileri ve ekonomik buyume yapilari incelenerek, bu ulkelerle Turkiye arasindaki ekonomik ve ticari iliskiler ele alinmistir. Ayrica calismanin yontemi Girdi-Cikti analizine dair teorik bilgi verilerek, Turkiye ve BRIC ulkelerinin ekonomik yapisi analiz edilmistir. BRICS ulkelerine sonradan katilan Guney Afrika'nin incelenen doneme ait Girdi-Cikti verileri yeterli olmadigindan, bu ulke calismanin uygulama kismina dâhil edilmemistir. …

Efficiency pattern and spatial strategy of ports in Yangtze River Delta Region

This paper measures the efficiency of ports in the Yangtze River Delta Region (YRDR) in 2008 and 2013 using port berth quantity, quay length, and human resources as input indicators, using cargo and container throughput as output indicators, and considering traditional (foreign trade dependence and industrialization level) and modern environmental factors (traffic line density, financial development level, and informatization level). To achieve such aim, this study constructs a multi-stage data envelopment analysis model (DEA) that identifies effective port decision-making units (DMUs) and generates a highly accurate conclusion by eliminating the interference from the exogenous environment and random errors. First, the external environment significantly affects port efficiency, with the traditional environmental factors showing huge fluctuations and the modern environmental factors producing great benefits. Second, the efficiency of ports in YRDR has increased from 2008 to 2013 primarily because of their pure technical efficiency. Third, the weighted standard deviation ellipse (SDE) analysis results reveal that the efficiency pattern of ports significantly deviates from their throughput pattern, while the center of SDE of port efficiency moves from the eastern coastal regions to the northwest regions. Based on these findings, this paper proposes spatial development strategies for YRDR, such as creating an unblocked environment where spatial elements can freely circulate, intensifying port-city joint development, implementing differentiated policies, and focusing on the spatial collaboration of port efficiency.

中国城镇居民消费函数模型—基于社会嵌入性视角的分析

论文基于相对收入消费理论的影响因素、社会嵌入性因素和多层统计模型，建立了社会嵌入性视角下，中国城镇居民消费函数影响因素模型。解决了居民消费影响因素的作用路径问题以及社会嵌入性变量对居民消费支出影响的精确性问题。利用全国31个省级行政区的面板数据，实证分析了城镇居民人均当期消费支出的影响因素。结果表明，在整体差异中，有28.79%是由社会嵌入性因素的不同所造成。消费欲望、消费习惯、外贸依存度和城市化率均为正向直接影响因素；另外，地区的产值结构对当期消费支出有间接促进作用。因此在分析居民消费结构时需要考虑社会嵌入性因素。 This essay, based on the influences of relative income consumption theory, social embedded fac-tors and multilevel statistical model, establishes a model of the influences of the consumption function of Chinese urban residents from the perspective of the social embeddedness. It solves problems of the influential path of residents’ consumption and the accuracy of how embedded variables affect residents’ spending. Using the panel data from 31 provinces, this paper empirically analyzes the influences of current expenditure of per urban residents. The results show that 28.79% of the differences are caused by the social embeddedness. Consumption desire, consumption habits, foreign-trade dependence and urbanization rate are all positive and direct factors; in addition, the structure of regional output value has indirect and positive effect. So when analyzing consumption structure, we should consider social embeddedness.

Analysis of the Croatian vegetables market

Croatian accession to the European Union has increased exposure of domestic vegetable growers to competition from foreign markets making this market more vulnerable. The aim of this study was to determine the situation and problems on the Croatian vegetables market. Based on the method of supply balance sheets this paper analyzes the vegetable market in Croatia in the period from 2010 to 2012. Results showed that Croatia is not self-sufficient in vegetables production (self- sufficiency rate is less than 67%). In the last three years potatoes, tomatoes, carrots, onions and garlic were Croatia’s most important commodities, which made up 66% of the total domestic production of vegetables. Total vegetables human consumption in 2012 amounted to 114.3 kg / per capita (pc), with the highest per capita consumption being for potatoes (44 kg / pc), followed by tomatoes (15.8 kg / pc), onion and garlic (9.9 kg / pc), and carrots (6.7 kg / pc). The domestic vegetable market is characterized by a negative foreign trade balance and dependence on imports. The biggest amount of vegetables is imported from the Netherlands, Italy and Spain. Insufficient domestic vegetable productions is the result of fragmented structure of mostly small family farms, unmanaged production infrastructure, lack of heating and irrigation systems, as well as lack of systems for protection from hail and frost, and lack of storage capacity. Also, one of the biggest problems of Croatian vegetable market is inefficient distribution because growers often do not have the financial and/or organizational ability to act independently in the market which causes high logistics costs. Competitiveness of the Croatian vegetable market can be increased by consolidation and technological modernization of production, and encouraging vertical and horizontal integration of all stakeholders in the supply chain of vegetables.

Re-estimation of China’s Degree of Trade Dependence and External Imbalance: Value-added Statistics in the Global Production Chain

The distortion of GDP and foreign trade data has exaggerated China’s foreign trade dependence degree and external imbalance degree. The distortion of GDP is mainly caused by the difference between the exchange rate method and purchasing power parity (PPP) estimation. The distortion of trade data includes double counting of customs statistics as well as the discrepancy between the international trade flows of goods and of capital caused by the ownership issue. The re-estimation of China’s trade dependence degree and external imbalance degree reveals that according to official statistics, in 2007 the dependence degree of China’s foreign trade decreased to 31.59 percent from 68.02 percent and its imbalance degree decreased to 2.11 percent from 10.13 percent. Therefore, it is utterly groundless to accuse China of “manipulating the exchange rate.”