By Zhuo Xian, Department of Development Strategy and Regional Economy, DRC & Song Wenyue, School of Economics and Management, Northwest University

Research Report, No.19, 2019 (Total 5519) 2019-2-25

Abstract: Based on an analysis of the comparative advantage and substitutability of 8,842 kinds of goods imported by the U.S. from China, this paper gives a detailed evaluation of the tariff transmission coefficient and price elasticity of all kinds of goods, as well as an estimation of the impact of Sino-US trade frictions on China’s economic growth and employment opportunities in view of export value-added rate. In different scenarios, China’s export of goods to the U.S. will decline by 3.2%-8.2% in 2019, economic growth will slow down by 0.09-0.24 percentage points, and job opportunities will decrease by 0.694-1.844 million. Due to China’s low comparative advantage and irreplaceability of mid-high-end level of technology, the export volumes, added value and employment opportunities of the mid-high-end manufacturing industries would be greatly affected. In order to grasp the initiative of Sino-US trade talks, we need to improve the comparative advantages and irreplaceability of “Made in China” products, support enterprises to diversify export markets, hedge tariff costs with trade facilitation, and strive to avoid employment shocks caused by large-scale cross-border industrial transfer.

Key words: Sino-US trade frictions, economic growth, employment