An analysis of the causes of the Sino-US trade war

Abstract

Since the establishment of diplomatic relations between China and the United States, the economy between the two countries has been developing rapidly, but it also inevitably brings about a lot of trade friction.On the issue of trade war that has just started, this article first analyzes the trade structure between China and the United States by calculating the Comparative Advantage Index.Then this article puts forward several real reasons for Sino-US trade friction based on the empirical analysis. Finally, the relevant countermeasures are briefly introduced at the end of the article. 1. Analyze the comparative advantages of the two countries by using RCA index Before we analyze the reasons why the trade gap between China and the United States has increased year by year, an important indicator should be used to analyze the comparative advantages of China and the United States in trade to show the structure of trade between China and the United States. The Revealed Comparative Advantage Index is proposed by the American economist and is used to reflect the Comparative advantages of a certain industry of a country relative to the world average level.The formula is as follows: wt wj it ij ij X X X X RCA = . (1) Among them, ij RCA means the The Revealed Comparative Advantage Index of product j in country i. ij X shows the value of country i export product j. it X means the total export value of country i. wj X shows that the total value of all the countries in the world export product j. wt X represents total world exports to all products. Generally speaking, if the RCA index is greater than 2.5, it indicates that the country has a very strong comparative advantage in such products.If the RCA index is greater than 1.25 and less than 2.5, it indicates that the country has a strong comparative advantage in such products. If the RCA index is larger than 0.8 and smaller than 1.25, the country's international competitiveness of such products is considered to be strong. However, if the RCA index is lower than 0.8, it indicates that the country does not have a comparative advantage in international competition. Table 1. China's export RCA index for all types of products from 2008 to 2017 Year and product category 2008 2009 201