The Effects Of Sexual Imbalance On China’s Global Trade Imbalance

The sex ratio at birth has been deviating from the normal level since the implementation of China’s birth-control policy. In year 2006, the sex ratio at birth reached to the historical highest point which was 125.28, and this fact means that China has became a country with severe sexual imbalance. Meanwhile, the sex ratio of population in marriage age also confronted of a dramatic rise in year 1995 after exceeding 106, and it reached the peak point which was 111.22 in year 2013. Due to the rising sex ratio, many social negative issues occurred one after another, such as the intensifying competition in marriage market, the increasing crime rate, the frequent occurrence of women trafficking, the rising marriages at young age, more wives sharing, and so on. In fact, in economic field, sexual imbalance also has some huge influence. To be more specific, sexual imbalance has affected the supply of young female workers in labor market negatively and social savings in asset market positively. As a consequence, more and more academics have conducted many researches about the rising sex ratio, aiming to figure out why it happened and what we can do to change it. In the field of international trade, huge international trade surplus started to emerge in the early 1990s, and has kept expanding for the past two decades. The global imbalance also has induced many economical problems, such as the rising trade conflicts, the appreciating RMB, the increasing domestic inflation, while has been contributing to the development of China’s economic hugely for the past 20 years. Because of the problems rose from trade surplus, many scholars have conducted a lot of researches about the rising global imbalance, trying to figure out why it happened and what we can do to change it.Although the two facts mentioned above have captured the interests from the academics, few scholars studied the possible link between them. The only several studies showed that the rise of sex ratio will make a positive impact on the expanding trade surplus. But the result needs more theoretical and empirical evidences and the studies have some weaknesses in terms of research methods.Aiming to study the possible link between the fact of sexual imbalance and the fact of global imbalance in depth, this paper made a theoretical supplement on the mechanism that rising sex ratio affects global surplus in China. On the base of the competitive saving motive theory, this paper pointed out that the theory of comparative advantage also contributes to explaining the sexual impacts on global imbalance. According to the competitive saving motive theory, the rise of sex ratio will make a positive impact on the expanding trade surplus. However, according to the theory of comparative advantage, this paper point out that the rising sex ratio will make a possible positive impact on the expanding trade surplus. As a result, on the foundation of these two theories, we found that the influence of sex ratio on trade surplus is ambiguous, which means we still needing more empirical evidences to figure out the true impact sexual imbalance on global imbalance. By establishing a linear regression model, this paper conducted an empirical study on the possible link between sexual imbalances and current account imbalance by using regional panel data of 31 proveniences of China from year 1990 to year 2013. And this paper used five control variables, which is social insurance, the degree of financial perfection, the relative average wages of workers, the population of elderly dependency, and the ratio of working population in the total population, as the parts of the linear regression model, excepting the core explanatory variables sex ratio and international trade surplus. The empirical regressions result showed that sexual imbalance positively affects the international trade surplus, which is same to the existing researches. Furthermore, in order to figure out the differences in the sexual impacts on global imbalance among different regions of China, we made several another regressions using subsamples of east China, center China and west China. We found that the influence of rising sex ratio on trade surplus in west China is larger than that in east China. In addition, considering the potential endogeneity problems inducing by statistical errors, data derivational bias and the causal relation between explanatory variable(cagdp, which means global imbalance) and explained variable(searatio, which means sexual imbalance), this paper used two instrument variables-medical conditions and the ratio of employers in SOEs-to conduct a more effective 2OLS estimate. After eliminating the endogeneity bias, the result suggested that sex ratio still could generate economically positive impact on current account. At last, we have done a robust analysis by excluding samples with extreme values and changing the data source, and the result showed that sex ratio could generate positive impact on current account robustly. Then, we came to conclusion that sex ratio have a significantly positive impact on trade surplus. Finally, this paper offered several relevant policies to change the situation of China’s sexual imbalance.