U.S. Trade Deficit with China: A Much Exaggerated Statistics Index Under Complex Supply Chain

Abstract

There has been trade imbalance between US and China for decades, represented as huge Sino-US trade surplus. Since the global financial crisis in 2008, there has been a series of changes in Sino-US trade. Trade surplus is nothing but a misleading statistical myth under the new global division of production model, with “China factors†only taking part in the cost of production, rather than the value added process. China’s trade surplus indicates the imbalance of economic structure. In order to eliminate the trade imbalance situation, China should adjust the policies towards foreign investment, reduce the dependence on global investment, and encourage the innovation.