Country trade report

China is one of the largest economies in the world and plays a significant role in global

trade. In terms of overall exports and total imports in 2021, China came in first and second,

respectively. China's top commodities include phones, office machine parts, PCs, coordinated

circuits, and communication gear. Copper metal, iron mineral, petroleum gas, integrated circuits,

and unrefined petroleum are China's top imports. Japan and the US are two of China's main

trading partners.

Bilateral tariffs have expanded on average to 17% between the US and China, and the

Stage One Understanding endorsed in January 2020 between the two nation’s just prompts minor

decreases in the duties to 16% (Bekkers & Schroeter, 2020). There has been a reorganization of

value chains in (East) Asia as a result of the trade conflict, which has resulted in a significant

reduction in trade between the US and China in 2019. Additionally, there has been a significant

diversion of trade toward imports from other regions.

The reproduction examination shows that the immediate impacts of the duty increments

on the worldwide economy are restricted (0.1% decrease in worldwide Gross domestic product)

(Bekkers & Schroeter, 2020). The effect of the Stage One Settlement on the worldwide economy

is considerably more modest, albeit the US is projected to transform genuine pay misfortunes

into genuine pay gains as a result of the Chinese responsibilities to purchase extra US products.

The greatest effect of the exchange struggle is incited by rising vulnerability about exchange

strategy and the paper gives a system to investigate the vulnerability impacts (Bekkers &

Schroeter, 2020).
 The percentage of Chinese imports into the global market increased from 2 to 11 percent

between 1990 and 2010. It was a much larger increase for the US, going from 3 to 19 percent

(Handley & Limão, 2017). The amount of US fabrication used on Chinese goods has increased

by more than 10 times as a result of this, and there is evidence that this has also contributed to

reductions in US expenses for assembly work and neighborhood compensation (Handley &

Limão, 2017).

Fig 1: China import penetration in US. Actual versus counterfactual under policy

uncertainty

Japan and China's commercial connection has a major effect on the world economy.

China shipped goods valued at $168 billion in 2021 to China's imports from Japan, valued at

$153 billion, were a major supply source (Stewart, 2020). China and Japan have comparative

advantage with Japan in that China benefits similarly from labor-intensive assembly due to its

large labour pool and cheaper labour prices. However, Japan has a comparative advantage in
cutting edge businesses due to its reputation for mechanical prowess and capital-intensive

endeavors (Yang & Zhao, 2021). Strengthening the political common trust, expanding

international exchange markets, lowering barriers to entry into the monetary market, boosting

scientific, innovative, and training exchanges between China and Japan, and other measures

would all help to mitigate the impact of Japan's monetary differences on China's economy (Yang

& Zhao, 2021).

Fig 2: China- Japan relationship

In conclusion, an essential component of the global economy is China's trading relations

with the United States and Japan. Numerous factors, including as trade tactics, economies of

scale, factor enrichments, and proximate advantages, have an impact on these relationships. A

clearer picture of the exchange components between these important financial factors can be

obtained by comprehending these variables. These trade relations have led to increment in

market size, permitting firms to accomplish economies of scale, prompting expanded assortment

and lower costs for consumers.