The U.S.-China Trade Deficit And The Cause Analysis

With the rapid development of Sino-U.S. trade exchange, the trade deficit is increasingly outstanding since U.S.-China establish diplomatic relation. According to United States official statistic, the trade deficit appeared from 1983 and it reached to 250.5 billion dollar in 2006. While the China custom statistic show that China had trade deficit from 1979 to 1992, and changed to trade surplus from 1993 .The trade surplus is 144.5 billion dollar in 2006. Which not only strengthen trade friction between the two countries, but also make China facing the pressure of RMB appreciation. It becomes the most important problem that how to deal with the trade deficit. Studying the cause of U.S-China trade deficit make us not only realize the problem reasoningly, but also solve a series of trade issues rightly. Which have important signification to lessen bilateral trade friction and develop bilateral trade relation.Firstly, the paper summarizes correlative study at home and abroad to realize the status quo and the method in this field.Secondly, we make an analysis of actuality from three aspects which are U.S.-China trade deficit gross, commodity structure, enterprise property and trade methods. China's trade surplus mainly come from Labor-intensive products. The foreign companies account for 70 percent in exporting products to America. As a result of processing trade method, China export mainly low-skilled and labor-intensive products.Thirdly, the paper analyzes the cause of U.S.-China trade deficit theoretically and realistically. The results are following: 1. Different statistical methods of two countries lead to great trade balance which is adjacent to some extent after modifying by price-recording methods, re-export and trade increment from 1989 to 2005. 2. Comparative advantage decides that U.S.- China' trade is supplementary. China export a mass of labor-intensive and low-skilled products to America, while America export technology-intensive and capital-intensive products to China. The trade deficit is pricked up owing that America enforced exports controls on hih-tech products to china. 3. East Asia' transferring of industry make China carry on the trade surplus of East Asia to United State. 4. The multinational make that the pure commodity trade stat can not reflect real relation of the two countries.Finally, the paper puts forward some advice: l.Pefecting statistical regulation and build statistic system characterized by principle of "Ownership". 2. regulating industry structure and speed industry upgrade. 3. Developing overseas trade and transfer partial trade surplus. 4. Strengthing cooperation of the two countries and promote America hih-tech exports to China.