Sino-US Trade Friction From The Perspective Of Game Theory

Since the two countries established formal diplomatic relations, bilateraleconomic and trade have developed rapidly, the Sino-US trade relationship has played adecisive role in China’s foreign economic and trade relations. But since China began to appearon the trade surplus with the United States from1992, there have been some relatively sharpcontradiction between the two countries. In this background of trade imbalance, the UnitedStates frequently excuse to anti-dumping and countervailing issues, intellectual propertyprotection, trade quotas, and other trade frictions with China continue to occur. Especiallysince China joined the WTO, on one hand by the two countries trade more closely and gainhuge economic benefits, on the other hand, American become the state which has the mosttrade friction with China, and this situation has a trend of further development after thefinancial crisis of2008, people can not help but worry about the prospect of Sino-USeconomic and trade relations.Why the U.S has been frequently manufacturing trade disputes, what is the motivationbehind, what kind of impact will it bring to both sides, and how our country should deal with,these are problems worthy of discussion and research. Of course, in this area, there are manyacademic research, government and enterprises also have some experience in dealing withtrade friction problem. But with the complex of trade friction, the understanding and researchof trade friction need to be further deepened.This paper first introduces the history and current situation of Sino-US trade development,examines the factors affecting trade friction. Then introduce the related concepts of the gametheory, attempt to analyze the strategy thinking process of trade friction participants from theperspective of game theory. Because of the profit between the two countries in trade is notonly affected by domestic policy, at the same time by other policies, so the Sino-US tradefriction reflects two different interest group’s behavior based on process to maximize theirown interests, so it is a typical game process. Through the analysis we know that trade friction tends to cause destruction to both sides of the results, if a country pay more attention tolong-term interests, it would take a more open trade policy through cooperation. In the end ofthis paper, on how to change the game structure, American strategy selection, specificsuggestions put forward to deal with trade friction from two angles of government andenterprises. For example, the implementation of strong threat measures, vigorouslydeveloping the economy to increase bargaining power, make full use of the WTO mechanism,these measures will change the course of the game, increase the expected loss of Americanlaunch trade war. This paper is mainly to provide a way of understanding the trade friction,hoping it can help to promote economic and trade cooperation between the two countries.