Chinese and U.S. trade Find the value of Chinese imports and exports of goods an

Question

Chinese and U.S. trade

Find the value of Chinese imports and exports of goods and services, and US imports and exports of goods and services, expressed as a proportion of GDP, since 1982. Graph the series and comment on any trend. A good source of information is the World Bank’s World Development Indicators at http://data.worldbank.org/data-catalog/world-development-indicators - go to “Databank” and extract the relevant countries, variables, and years.

Then repeat the exercise with an index of import volume, and an index of export volume. Graph the series and comment on any trend.

Explanation / Answer

China-

The role of foreign trade under the economic reforms increased in importance . Prior to the reform period, the combined value of imports and exports had rarely exceeded 10 percent of national income. In 1980 it was 15 percent, in 1984 it was 21 percent, and in 1986 it was 35 percent. Different from earlier periods, when China was committed to trying to achieve self-sufficiency, under Deng Xiaoping foreign trade was considered as an essential source of investment funds and modern technology. Hence, restrictions on trade were loosened further in the mid-1980s, and foreign investment was legalized. Joint ventures between foreign firms and Chinese ones became common.The Asian financial crisis impacted China at the margin, mainly through decreased foreign direct investment and a sharp drop in the growth of its exports.

US-

The US trade gap increased to USD 47.06 billion in February 2016 from an upwardly revised USD 45.88 billion deficit in the previous month and above market expectations of USD 46.2 billion. It is the largest gap in six months as imports rebounded and exports increased for the first time in five months.

The United States has had consistent trade deficits since 1976 because of high imports of oil and consumer products. In more recent years, the biggest trade deficits were recorded with China, Japan. United States records trade surpluses with Hong Kong, Netherlands, UAE and Australia

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