An Analysis Of The Dual Margin Of Sino-USA Export Trade

China is the largest developing country in today’s global economy while theUnited States is the largest developed countries. And the trade relation between thetwo countries is very compelling. Since the formal establishment of the diplomaticrelation between China and the USA in1979, bilateral trade between the twocountries maintained a high-rising growth trend. Especially after China’s accessionto WTO in2001, China’s merchandise exports to the United States is showing anunprecedented scene and the USA. has become China’s most important exporttrading partner. How did China achieve her growth to the United Statescontinuously?The New-New Trade Theory which is also known as the Trade-Models-with-Heterogeneous-Firms Theory for the study of the microscopic structure provides anew theoretical foundation, making a new dimension study about trade growthmethod become possible. In this paper, we analyze the trade growth method ofSino-USA with the dual margin that is formed during China’s merchandise exportsto the United States based on the Trade-Models-with-Heterogeneous-Firms Theory.The dual margin is a new decomposition method to explore trade growth and it’scomposed with the intensive margin and the extensive margin. The intensive marginrefers to the growth for the export of products in a single volume. And the extensivemargin is the expansion of exports marginal changes in the species.Firstly, we summarized the existing literature of domestic and foreign scholarson the dual margin and systematically explained the Trade-Models-with-Heterogeneous-Firms Theory and the classical models about the dual margins ofexport trade. Secondly, we made a statistical analysis on the scale of China’s exports to the United States based on the trade data from the UN-Comtrade. On the one handwe analyzed the growth rate and the proportion of the value of exports of Chineseexports to the USA. to study the overall situation of Sino-USA export. On the otherhand we analyzed changes in the export trend of different products with theproportion of merchandise exports. Once again, we decomposed the micro-level dataof the export trade of Sino-USA in2001-2012according to the definition of the dualmargin in product level and further studied the dual margin structure of themerchandise export between China and the USA from the three different dimensionsof product species, product value and the grow rate. The results showed that theexport growth from China to the USA was mainly achieved along the intensivemargin. But the extensive margin showed a better stability through externaleconomy shocks.Finally, after analyzing the both the theory and empirical data, the article putforward relative proposals about Chinese export method towards the USA whichmainly depended on the intensive margin by now. In the first place, we shouldencourage enterprises to strengthen their product differentiation through productinnovation and research and development. Then we should change the method oftrade growth of China by continuously improve the quality and the added-value ofexport products. Also we need to adjust the structure of export markets to diversifythe market to and finally effectively circumvent the risks of a single and centralizedmarket.