Accounting gap between China’s real and nominal trade balance with Asia-Pacific economies from the perspective of global value chains
【Abstract】Based on the World Input-Output Tables and the decomposition framework proposed by Wang et al.(2017), this paper calculates the accounting gap between China’s real and nominal balance of trade with major Asia-Pacific economies. The results indicate that China’s nominal trade surplus has been largely overestimated, with about 24% of the nominal value as the overestimated component. The largest accounting gap exists in the trade with the US, South Korea, and China’s Taiwan, with nominal surplus significantly overestimated in the trade with the US and nominal deficit substantially underestimated in the trade with South Korea and China’s Taiwan. Manufacturing industries, especially those highly involved in the global value chains (GVCs), contribute the most to the accounting gap. It is noteworthy that despite a nominal deficit in China’s high-end service export, there is indeed a real and growing surplus from the perspective of value-added trade. In the context of GVCs, the accounting gap between real and nominal trade balance has become a stylized fact.
【Keywords】 global value chain; trade balance; accounting gap;
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