Complementary Or Substitutional? An Estimation And Analysis Of Sino-US Trade Relationship

Existing literature on trade structure, bilateral trade cooperation and competition is mostly classified beforehand according to the existing classification of technical products. Based on the theory of trade structure, this paper explores the calculative mothodology of the added value of export products based on the revealed value added index (RTV) proposed by Fan Gang (2006). The paper constructs a Revealed Complexity index by using 2002-2014 4-digit ISIC classification of export data from Bureau van Dijk-Chelem database, while the high-tech industry directory of China’s Bureau of Statistics serves as a testament to the validity of the index. Thereafter, on the basis of products’value added ranking, the paper proves the overall Sino-US export structure to be more complementary than competitive by investigating the indexes of competition and complementarity. Furthermore, the Sino-US trade imbalance and complementary is mainly reflected in the range of low added value and high added value products. From the perspective of competition, China’s pressure on U.S. is mainly reflected in low value-added products, China’s medium value-added products competitiveness is growing rapidly, switching from relative disadvantage to relative dominant position; the United States has an absolute advantage in high added value products, of which the competitiveness of China increased significantly from 2002. Dynamically, despite of the rapid growth of trade quantity, China’s export growth biased towards to low and mideum value-added products category, and export growth in the United States, though more slowly, but obviously biased in high added value products. The paper further compares the added value structure and the changes of Chinese and American export products in the EU market, and the results show that the two countries have different traits. The structure of U. S. exports to the EU is characterized by pharmaceuticals, refined oil, aircraft and space shuttle, medical equipment which are all high added value products. Unfortunately, China still mainly exports textile and garment. The structure of China’s exports to the EU deviates consecutively from the EU’s import demand structure, which may render Chinese exports to the EU’s growth vulnerable in the future.