Xia Xianliang: Sino-American Trade Imbalance, Industrial Division of Labor and America’s Rate of Unemployment

Abstract: US trade deficit with China only covers a small proportion of its foreign trade deficit. Traditional trade theory combines trade deficit directly with the ups and downs of employment, which has mistakenly twisted people’s judgment. This article upholds the view that it is international industrial division of labor that determines the international employment structure and international trade, not international trade determines international employment. Trade surplus does not necessarily lead to more employment, while trade deficit may not make people lose their jobs. The trade imbalance between China and the US does not make any negative impact on Americans’ employment, which demonstrates that it is not the direct cause of the unemployment of the US. The unemployment rate of the US is keeping a low level during all periods other than the crises. American financial or economic crisis is the main cause of the rise of unemployment rate. The economic complementarity between China and the US and the economic structural imbalance, on the contrary, brings about more employment to the US.