“US-China Trade Deficit in the Perspective of Global Value Chains” by Professor Wang Zhi
STRATEGY AND IB
Professor Wang Zhi
As U.S.–China economic ties expanded substantially over last two decades, the U.S. trade deficit with China also increased from about $10 billion in 1990 to about $350 billion in 2016. Most economists agree that bilateral trade balances should not be a focus of national policy because of the multilateral nature of international trade. However, as the bilateral trade balance is frequently headline news and a regular topic in the trade policy debate in the United States, a detailed analysis of economic factors that are driving the U.S.–China trade deficit from a global value-chain, especially “factory Asia” perspective, would help the public and policy makers to better understand the deeply rooted nature of bilateral trade issues and thus inform expectations as to what might happen in next decades due to the underlying structural change in global production network.