Adjusting Chinese Bilateral Trade Data: How Big is China's Trade Surplus

Abstract

Hong Kong plays a prominent role as a re-exporter of a large percentage of trade bound for or coming from China. Current reporting practices in China and its trading partners do not fully reflect this role and therefore provide a misleading picture of the origin or ultimate destination of Chinese exports and imports. We adjust bilateral trade data for both China and its trading partners to correct for this problem. We also correct for differences due to markups in Hong Kong and different standards for reporting trade (c.i.f. versus f.o.b.). For 2003, we estimate that China's overall trade surplus was between $53 billion and $126 billion, larger than that reported in official Chinese data, but smaller than that reported by China's trading partners. We also provide evidence that, in general, the actual origin of a good that is transshipped through Hong Kong is correctly reported by the importing country, but the final destination of such goods is not correctly reported by the exporting country.

Beggar thy neighbor or beggar thy domestic firms? Evidence from 2000 to 2011 Chinese customs data

“…Koopman, Wang, and Wei, 2012). These differences are discussed in detail in Schindler and Beckett (2005…”

Assessing Environmental Impacts Embodied in Manufacturing and Labor Input for the China−U.S. Trade

“…First, for exports from China to the U.S., the amounts from the U.S. statistics are much higher than the amounts from the Chinese statistics. This is mainly due to the re-exports through intermediate third destinations 4,5 . In particular, a great deal of Chinese goods is not directly exported to the U.S. from China ports, but first shipped to third destinations, primarily Hong Kong 6,7 , and re-exported to the U.S.…”

Adjusted Estimates of United States–china Bilateral Trade Balances: An Update

“…The difference between the estimates of the US-China trade deficit in goods derived bySchindler and Beckett (2005) and by us, based on official US data, is mostly due to the adjustment for re-export markups. If no adjustments were made for re-export markups, our estimate of the US trade deficit for 2003 would have been $US112.6 billion (seeTable 10), very close to the Schindler and Becket (2005) estimate of $US110 billion.…”

“…However, ultimately there still remains a large discrepancy of $US26.5 billion in 2005 that must be attributed mainly to re-exports through unknown intermediate third destinations. Schindler and Beckett (2005), using a methodology and assumptions similar to those used here, have adjusted the official US trade data to derive for 2003 a US trade in goods deficit with China of $US110 billion, compared with our $US101.8 billion. Similarly, by adjusting the official Chinese trade data, they derive a Chinese trade surplus with the USA of $US86 billion, compared with our $US86.1 billion.…”

“…It has since been determined that the official Chinese import data by countries of origin include in principle both direct and indirect imports from the respective countries. Whether this is fully and successfully implemented in practice is a different matter Schindler and Beckett (2005),. in their study of Chinese bilateral trade data, also use the same assumption.…”