In a series of papers (Fung & Lau, 1996, 1998, 2001), we have argued that neither the U.S. nor the Chinese bilateral trade balance data are accurate. In this paper, we utilize the most up-to-date information and provide more accurate estimates. The adjustments include f.a.s.-f.o.b. and f.o.b.-c.i.f. conversion, re-exports via Hong Kong, re-export markups of Hong Kong middlemen and trade in services. With these adjustments, the best estimate of the U.S.-China bilateral trade balance in goods and services in 2002 is US$ 74.3 billion. This is a large figure, but is more than 25% smaller than the official estimate of the U.S. government.