The World is Flat -- A New Perspective of International Trade

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Transcript The World is Flat -- A New Perspective of International Trade

国际贸易学
Introduction
© 2007 Pearson Addison-Wesley.
All rights reserved
联系信息 Contact Information
Instructor 教师:
余淼杰博士
Office办公室:
郎润园621
Office Hours答疑时间: 预约
Email:
[email protected]
Telephone:
6275-3109
Fax:
6275-1475
Course Web:
http://mjyu.ccer.edu.cn/courses/trade07.html
International Trade, Dr. Miaojie Yu, CCER, Fall 07Copyright © 2006 Pearson Addison-Wesley. All rights reserved.
Outline of the Talk
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Integration of Trade
Disintegration of Production
China’s Current Trade Situation
Sino-U.S. Trade Relationship
Traditional Trade Theory
Current Research Topics
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Integration of Trade
• How much do we trade?
• Trade still remains a seemingly small fraction of GDP for rich
countries.
• The decades leading up to 1913 was a golden age of global
trade and investment.
• The global integration of trade keeps the same level.
• Table 1 ( Feenstra, 1998)
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
The World Is More Integrated Than Ever
• Some facts are hidden.
• Industrial countries have increasing shares of their economies
devoted to services rather than manufacturing.
• Make comparison from different views.
• Should measure merchandise trade relative to merchandise
value-added.
• Almost all countries have experienced substantial growth in
trade.
• Table 2
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Table 1.2 Merchandise Trade Relative
to GDP and Merchandise Value-Added,
1960-1990 (percent)
Copyright © 2007 Pearson Addison-Wesley. All rights reserved.
4-8
Integration of Trade
Copyright © 2007 Pearson Addison-Wesley. All rights reserved.
4-9
Table 1.1 U.S. Merchandise Trade by Industry, 2001,
Shares of Total Trade and Production or Use (percentages)
Copyright © 2007 Pearson Addison-Wesley. All rights reserved.
4-10
Table 1.3 Percentage Distribution of
Exports by Major Trading Groups,
1985-1998
Copyright © 2007 Pearson Addison-Wesley. All rights reserved.
4-11
How to Explain Growing Trade?
• Trade Liberalization
– GATT/WTO
– Regional Trade Agreements: CUSFTA, NAFTA, CARICOM, CACM,
MERCOSUR, ASEAN, SPARTECA.
• Falling Transportation Cost
• 2/5 trade growth can be explained by these two factors.
• When trading partners becomes more similar in size.
-- Example: World GDP=150;
– Scenario 1: Country A= 100; country B=25, country C=25
– Scenario 2: Country A= 50; country B=50, country C=50
– Maximum exports are different.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Disintegration of Production
• Disintegration of production itself leads to more trade
due, in large part, to the calculation method.
• Outsourcing
• Barbie doll story (Tempest, 1996)
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Sell for about $10 in the U.S.
Made in Mainland China, but export from Hong Kong for $2
65 cents cover materials cost, 35 cents pay for Chinese labor.
The remaining 1$ for transportation in China
The remaining 7$ for transportation, marketing, wholesaling and
retailing.
– $1 for the Mattel.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Outsourcing
• First measurement: trade is categorized by the end-user.
• The U.S. trade shifts away from agriculture and raw materials,
and towards manufactured goods in the U.S. trade.
• Processed manufactured goods play an increasing important
role in U.S. trade.
• Outsourcing is important!
• U.S. firms have been substituting away from these processing
activities at home.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Outsourcing on the value-chain
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Another measurement: imported intermediate goods
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
The World is Flat
• Vertical specification : another name of Outsourcing
• U.S. has a doubling of the share of imported inputs between
1975 and 1995 for all manufacturing.
• The U.K. shows an especially large absolute increase in
foreign outsourcing.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Trade Openness
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
China’s Current Trade Situation
• Current trade openness is around 64% of GDP.
• China’s share in world trade has grown steadily since
1979.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
China’s Trade
• China has increased its penetration into rich countries’
market.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
China’s Trade
• Simultaneously, it also becomes a more important export
destination.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
China’s role in Asian Regional Trade
• China is now among the most important export
destinations for other Asian economies
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Strong Export Potential Forward in China
• China’s integration with the world economy so far is not
unprecedented in either its scope or speed.
• Compared to Japan, Korea, and other NIEs in their fast
development period, China’s exports have grown at a
slower rate than theirs.
• This suggests that China could maintain relatively high
strong export growth for years to come.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Composition of Trade
• Diversify from an initial heavy reliance on textile and
other light manufacturing.
• In the early 1990s, exports profiles rank as follows: light
manufacturing, textile, machinery and transport (small
electronics).
• Today, China exports more sophisticated electronics,
furniture, travel goods, and industrial supplies.
• Statistical indicators of dispersion illustrate an increase
in overall export diversification.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Outsourcing in China
• A high degree of vertical specification of production
within the Asia region.
• Evidence 1: The ratio of import for processing to total
imports increased from 35% in the early 1990s to more
than 50% today.
• One example
• Evidence 2: Pattern of Trade
• An increasing imports from Asia and a corresponding
increase in exports to the U.S. and Europe.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Trade Balance
• China keeps a modest overall trade surplus.
• China has significant trade surplus from trade with the
U.S.
• But it was offset by an increasing trade deficit with the
rest of Asia.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Sino-U.S. Bilateral Trade
• This year China reaches a $144 billion trade surplus with
the U.S.
• Simultaneously, more than 3 million workers lost their
jobs.
• Congressmen in the U.S. threat to perform trade
sanction with China.—Impose 27.4% high tariffs.
• Push RMB revaluate strongly and quickly.
• Pending the permanent most favored nation (MFN)
treatment.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Questions
• Economically speaking, is it deficit necessary bad for the
deficit country, and good for the surplus country?
• Any essential link between the blue-worker
unemployment and trade deficit?
• Is it credible for the U.S. congressional threat?
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Trade Deficit is not necessarily bad!
• Check the basic trade identity:
Trade Deficit=Net Inflow of Foreign Capital
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Trade deficit is like borrowing money from foreigners.
The key point is how to use.
Investment or Consumption?
Historical stories in 1980s, 1990s, and 2000s.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Trade Surplus is not necessarily good!
• Statistically, it is good for GDP calculation.
• But GDP does not mean anything!
• Export Booming and Productivity Improvement
– The termination of Multilateral Fiber Agreement (MFA) in 2005.
• Green GDP
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
The Far Cry from U.S. Workers
• Any essential link between the blue-worker
unemployment and trade deficit?
• No.
• The elasticity of substitution between Chinese export
and other Asian countries’ export is very high.
• The essential reason for huge unemployment is due to
the economy recession in years 2001-2003 in the U.S.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
The Congressional Threat
• It is incredible.
• The U.S. does not have any right to terminate our
permanent MFN treatment.
• They don’t dare to uni-laterally impose high tariffs on
Chinese textile and garments.
– It violates the WTO principles.
– It worse the U.S. itself due to the elasticity of exports and imports.
– It already gets historical lesson from the stupid policy.
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
What do we study in Trade?
• Gains from Trade
– Each trading country gains
– Within a country, some gain but some lose
• Pattern of Trade
– Who trade with whom for what?
– Inter-sectional v.s. intra-sectional trade
• Government Effect of Policy on Trade
• Multinational Cooperation and Foreign Direct
Investment (FDI)
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Traditional Trade Theory
• Smith’s Absolute Advantage
• Ricardian Comparative Advantage
• Heckscher-Ohlin Theory
• Viner’s Specific Factors Model
• Krugman’s Increasing Returns to Scale Model
• Feenstra’s Product Variety Model
• Melitz’s Intra-industry Trade
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Top 10 Research Topics (Theoretical & Empirical)
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Heckscher-Ohlin Model (Leontief Paradox)
Trade in Intermediate Goods, Wages, and Outsourcing
Increasing Returns and the Gravity Equation
Gains from Trade and Regional Trade Agreement
Import Tariffs and NTBs ( Dumping, Quotas, and Subsidies)
International Political Economy of Trade Policy
Trade and Endogenous Growth
Multinationals and Organization of the Firm
Trade and Environment
Trade and Geography
International Trade, Dr. Miaojie Yu,
CCER, Fall 07
Top World-class Trade Economists
• Theory
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Bhagwati
Grossman
Helpman
Krugman
Staiger
Melitz
• Empirics
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Baldwin
Feenstra
Leamer
Trefler
Blonigen
International Trade, Dr. Miaojie Yu,
CCER, Fall 07