Consumer Savings Structure And Sino-us Trade Imbalances Correlation Studies

Three has been a continuous imbalance of Sino-US trade which caused a series ofmacro-economic problems. What caused this situation? Many scholars have donesome studies from the angles of exchange rate, FDI, etc. This paper begins with thediscussion of the different structure of the consuming and the savings between Chinaand the USA. According to the theoretical derivation and the quantitative analysis ofthe correlation between the consuming and the trade balance, the savings&investment and the trade balance, we find how and to what degree the structure of theconsuming and the savings effect the trade balance.The main content of this paper contains five parts. The first part is the introduction.The second part is the current situation of the Sino-US trade and the status of theconsuming and savings structure of both China and the USA. The third part is thetheoretical derivation of the imbalance of the Sino-US trade. The forth part is thequantitative analysis of the impact the consuming and savings structure to theSino-US trade. The fifth part is the conclusion and the policy suggestion.The research method of this paper is the combination of the theoretical analysis andthe quantitative analysis. The theoretical basis are the saving-investment-trade modeland the theory of international capital flow under the open economy. The quantitativeanalysis based on the1993-2010data of consuming, saving, trade balance, etc. Thecorrelation examine, ADF examine, co-integration test and the Granger test had beendone and we found that three are persistent relation between the consuming andsavings structure and the balance of current account.China has to expand the consuming and reduce the saving to narrow the trade surplus.This means that China must change her existing growing model from relying on theinvestment and export to relying on the domestic demand.