The Study About Trade Structure Between China And The United States

As two of the biggest trading countries in the field of international trade, there is no doubt that China and the US are both the world's leading trade countries, but in terms of trade structure, China's technology level involved in exports is lower than that of the US.Therefore, comparing the trade structure between the two countries can provide reference of the further development of international trade for our country. And using the “Trade Similarity Index” to make the analysis is not only able to reflect the difference between the two countries' trade structure, but also can show the fierce degree of trade competition between the two countries.This paper, based on the trade structure theory, firstly from five aspects include comparative advantage, factor endowments, industrial structure, technological progress and trade protection to analysize the theoretical reasons affecting the trade structure. Then combined with the specific situation and case to explain the comparability of trade structure between the US and China, we make the conclusion that the trade structure is likely to convergence between the two countries. Secondly, this paper analysizes the circumstance of the trading development as well as the export and import structure between the US and China during 1995 to 2014, and finding that the trade structure of US has little change during the period, which is mainly exporting and importing capital and technology intensive products. By comparison, China has a bigger change in export structure which is from exporting labor-intensive products to exporting capital-intensive products, and its import trade structure though is still dominated by capital-intensive products, the import of resource-intensive products accounted for a larger increase.For further analysis, this paper uses the”trade similarity index” and the data about the division commodity trade from 1995 to 2014 from United Nations Statistics to calculate the similarity index of foreign trade between China and the US. The results show that, the export similarity appeared to rise firstly and then be steady, which means that the trade structure between China and the US is converging and the commercial competition is becoming more competitive. This situation has been lasting until 2000, it stabilizes. In contrast, the import similarity index is higher between the US and China and the import competition is more intensive. But, the trend has been relatively stable, and it ends until 2010 when China begins to adjust its import trade structure greatly. From that moment on, the import trade similarity of the two countries begin to have a slight improvement, this means that the import competition is more intensive.In order to make further analysis about the similarity of export and import trade structure of the US and China, this part combines with the changes of the export and import share in SITC 1 digit product categories to calculate the cross similarity index between China and the US each year. And we find that in the field of export trade, no matter what year it is, Chinese trade structure is always approaching to that of the US in 2000. In import side, however, it shows a parallel development in the import structure, which means it makes no difference in different year in the import trade similarity index. In other words, it has a fierce competition in the aspect of import, which to a large degree depends on the inevitable demand of the two countries. Based on the conclusion, this paper uses the ARMA model to make short-term prediction about the change of trade structural similarity in the next year between the US and China, it shows that the export similarity index will further increase, while the data of import similarity index is checked out to be random sequence which is unable to make the prediction.Therefore, in order to improve the competitiveness of China's international trade, and ease the trade competition led by the US and other developed countries, this paper proposes three suggestions: making reasonable choice of key markets to highlight the advantages;promoting the development of intra-industry trade to balance the competition between different product categories; increasing the development of high technology industry to enhance the fundamental power. In a word, in the future international trade, China should not only avoid the conflict of trade, but also should improve the value added of international trade. Only in this way can China be the world's first trade power.