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Global Production Sharing And US-China Trade Relations

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Executive Summary

This paper examines US-China trade relations, focusing on the ongoing process of global production sharing global production sharing - the breakup of the production processes into geographically separated stag - and the resulting trade complementarities between the two countries in world manufacturing trade. The results suggest that the US-China trade imbalance is basically a structural phenomenon resulting from the pivotal role played by China as the final assembly centre in East-Asia centered global production networks. Given the current state of China's factor market conditions, US-China trade patterns are unlikely to change dramatically in the short to medium run.

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