The Influences Of Relative Standings On Sino-US Trade Frictions:a Non-Cooperative Game Perspective

There is a paradox in the process of capital and market’s globalization, that is economic frictions booming along with the interdependence-not only within the developed world, but also among nations with similar industrial structures; moreover, this also happens between the ascending states and the patriarchic powers, and the economic inter-complementary nations are also not immune to that. The first decade of this century, witnessed the booming of China’s economy as well as the down turning of U.S.’s. Consensus had been achieved that the stabilization of their mutually beneficial trade relations, is crucial to both China and U.S.’s security and prosperity, however, it seldom blocked the escalating and complicating of Sino-U.S. economic frictions.The frictions between U.S. and China, are not in accordance with the theory of comparative advantages, but originate from the asymmetric power structures of their interdependence. This reminds us that, the root of such frictions not only can be found in trade itself, but also related with the distributions of power in the international system, or in other words, the relative standings of the two states.This dissertation considers that, relative standings contain three elements:level, gap, and the cognitions of former two. And these elements cast their influences in two dimensions:status and variations. As a result, the objective existence of power asymmetry permeated the U.S-Sino interdependence. The frictions between China and U.S, according to difference of actors, can be categorized as state-led and market-driven; while the influences of relative standings majorly take place in state-led frictions, and magnify the possibilities of eruption. A model of non-cooperative game will be employed in this dissertation, in order to better demonstrate the author’s hypotheses. Firstly, how the three elements of relative standings imbued themselves into U.S-Sino trade, and how they shape the power asymmetry, will be clarified from a process-analysis perspective, with the help of a macro-model of U.S.-Sino trade. Secondly, four sub-models will be established, which respectively focusing on expectancies, costs, risks, and evolution, with the aim of explaining how power asymmetry is inputted and outputted in trade frictions, with these, some detailed deductions will be given. Lastly, the contexts of2005’s Sino-American Understanding Memorandum Signed on Textiles and Garments Trade will be reviewed, as an examination of this dissertation’s deductions. Generally speaking, the approaches this dissertation followed, are game-model analyses, and complemented with a case study, and the aim is explaining how systemic factors influence economic interactions. Innovation of this dissertation, is applying process-analysis to the economic interdependence, which is heavily influenced by the power asymmetry originate from relative standings. The author hopes that, this study can unfold the process of how relative standings accelerate the US.-Sino trade frictions.