Adjusted Estimates of the United States-China Trade Balances: 1995-2002

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Journal of Asian Economics, Vol. 13, page(s): 489-496

May 2002

journal of asian economics

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.

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