Research On Coordination Mechanism Of Solve Sino-US Trade Imbalance

Sino-US relations have become the most significant bilateral relationship. Moreover Sino-US economic and trade relation devoted much to Sino-US relations. The world's largest developing country China and developed country the US have highly complementary aspects on natural and human resources, market, capital and technology. The stable and healthy development of Sino-US economic and trade relations meets the long-term interests of both countries. However, Sino-US trade imbalance becomes an important factor which influences Sino-US relations, so how to solve this problem is a core issue facing the two countries.We can see that the huge Sino-US trade surplus is only a surface phenomenon in international trade and a natural process determined by different national conditions and development models. Therefore studying the trade surplus issue is essentially studying a series of economic problems. "The high trade surplus is an external symptom of China's macro-economy, not a root cause"said the former Minister of Commerce Bo Xilai. The adjustment of economic growth pattern is a fundamental method managing trade surplus, which requires setting a series of coordination mechanisms to facilitate its realization.This paper sorts out the relevant literature of mechanism design theory and research on Sino-US trade imbalance, and then reviews mechanism design theory proposed by Leonid·Hurwitz and other scholars. It shows that we should use an effective coordination mechanism to deal with trade imbalance, while we find that the literature primarily designs two aspects: first, what caused the Sino-US trade imbalance; second, how to resolve this problem. The studies of the former are relatively mature, and there are a lot of different points. However, at present the studies of the later are not many and don't form a scientific system to solve the problem.Based on the deficiency of the above research, this paper conducts an empirical analysis using detailed data on Sino-US trade. The methods include the model of two countries under the principle of ownership, the Grubel-Lloyd index of intra-industry trade and the models of Econometric Analysis, showing a comprehensive analysis of the factors causing Sino-US trade imbalance such as diameter of trade statistics, intra-industry trade and direct investment. The results prove that:Firstly, we use the model of two countries under the principle of ownership analyzing trade data in 2009, which shows that the Sino-US trade balance is less 31% than using the rules of origin. Secondly, the inter-industry trade between China and the U.S.A accounts for 24.19%, the complete intra-industry trade only 10.66%, and the third type of the industry 47.85% (GLT value is roughly stable at 0.4 ~ 0.6). Thirdly, if U.S .A's direct investment in China increases by 1%, it will cause China's export to the U.S.A as well as Sino-US trade surplus respectively growing 11.4% and 1.15%.Viewing to the above analysis and binding mechanism design theory, comparative advantage theory from Ricardian and complementary trade and investment theory from Kojima, this paper presents three coordination mechanisms about comparative advantage in technology, complementary trade and investment theory, consultation and conversation. In short, the Sino-US trade imbalance can be resolved through effective coordination mechanism. Of course this issue requires long-term, in-depth study. This article is to make a thinking guide, a research direction and a goal of endeavor for addressing the issue of Sino-US trade balance in order to pave the way for future research.