size of the U.S. bilateral trade deficit with China has been and continues to
be an important issue in bilateral trade relations. Some Members of
Congress view the deficit as a sign of unfair economic policies in China,
and have introduced legislation seeking to redress the perceived competitive
disadvantage China’s policies have created for U.S. exporters.
There is a large and growing difference between the official trade statistics
released by the United States and the People’s Republic of China.
According to the United States, the 2012 bilateral trade deficit with
China was $315.1 billion. According to China, its trade surplus with the United
States was $224.1 billion—$91.0 billion less.
This paper examines the differences in the trade data from the two nations in
two ways. First, it compares the trade figures at the two digit level
using the Harmonized System to discern any patterns in the discrepancies
between the U.S. and Chinese data. This comparison reveals that over
three-quarters of the difference in the value of China’s exports to the United
States in 2012 was attributable to five types of goods. Those five types
of goods, in order of the size of the discrepancy, were electrical
machinery; machinery; toys and sporting goods; footwear; and woven
The second approach to examining the differing trade data involves a review of
the existing literature on the technical and non-technical sources of the
trade data discrepancies, including two joint China-U.S. reports on
statistical discrepancies in merchandise trade data. The literature reveals
that the main sources of the discrepancies are differences in the list value of
shipments when they leave China and when they enter the United States, and
differing attributions of origin and destination of Chinese exports that
are transshipped through a third location (such as Hong Kong) before
arriving in the United States.
Because of the differences in the official bilateral merchandise trade data,
the U.S.-China Joint Commission on Commerce and Trade (JCCT) established a
statistical working group. The working group has released two
reconciliation studies to identify the causes of the statistical discrepancies.
The adjustments contained in the two studies are not meant to imply errors in the official
statistics of either country.
This report is updated annually, after the release of official trade data by
China and the United States.
Date of Report: February 25, 2013
Number of Pages: 11 Order Number: RS22640 Price: $29.95
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