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In recent years, we have witnessed rising trade protectionism with broad ranges of tariffs imposed on intermediate products. In this article, we develop an accounting framework to evaluate the sectoral impacts of the current U.S.-China trade war. We find that U.S. final demand and intermediate demand for goods produced by China decline significantly, with the largest losses occurring in the Electronic and ICT (information and communications technology) industry and the Electrical industry. We obtain sizable deadweight losses for the United States, particularly in the Electronic and ICT; Electrical; and Furniture industries. We also find that, with a leakage rate of 20 percent, total losses to U.S. consumers and importers are $3.3 billion, about 0.05 percent of gross U.S. output, whereas the full leakage losses are $10.7 billion, or 0.16 percent of gross U.S. output, which is twice as much as the annual welfare gains from the North America Free Trade Agreement. [ABSTRACT FROM AUTHOR]

The article presents the author's views on an article by Jinghai Zheng, Angang Hu, and Arne Bigstenon, regarding China's recent pattern of economic growth, which has been published in this issue of the journal. The author analyzes the calculation of China's gross domestic product (GDP) growth using a labor share of 0.5. He appreciates the suggestion in the article regarding the importance of total factor productivity growth in measuring the country's economic performance in the long run.

This article provides an overview of the concept of a liquidity trap and its implications for macroeconomic policies. It explains that a liquidity trap occurs during a recession when there is excessive saving and the nominal interest rate drops to its lowest point. The article explores how policymakers can avoid liquidity traps through macroprudential policies, such as leverage regulations, but also highlights the potential unintended consequences of these measures. It discusses the impact of leverage regulations on the interest rate and aggregate demand, and emphasizes the importance of ensuring that savers' marginal utility of consumption remains above the zero lower bound. The article concludes by discussing factors that could make a liquidity trap more likely, such as pessimism, deflation expectations, a collapse in real estate prices, and bank runs. [Extracted from the article]

China is both a major trading partner of the United States and the largest official holder of U.S. assets in the world. The value of Chinese foreign exchange reserves peaked at just over $4 trillion in June 2014 but has since declined to $3.19 trillion (as of August 2016). This very large decline in foreign exchange reserves is unprecedented, and some analysts have speculated that continued sales of these (mostly U.S.) assets might significantly impact the U.S. and global economies. This article explains the reasons for this large decline in official assets, China's available policy choices, and how these choices could affect the U.S. economy. [ABSTRACT FROM AUTHOR]

China is undergoing its long-awaited industrial revolution. There is no shortage of commentary and opinion on this dramatic period, but few have attempted to provide a coherent, in-depth, politicaleconomic framework that explains the fundamental mechanisms behind China's rapid industrialization. This article reviews the New Stage Theory of economic development put forth by Wen (2016a). It illuminates the critical sequence of developmental stages since the reforms enacted by Deng Xiaoping in 1978: namely, small-scale commercialized agricultural production, proto-industrialization in the countryside, a formal industrial revolution based on mass production of labor-intensive light consumer goods, a sustainable "industrial trinity" boom in energy/motive power/infrastructure, and a second industrial revolution involving the mass production of heavy industrial goods. This developmental sequence follows essentially the same pattern as Great Britain's Industrial Revolution, despite sharp differences in political and institutional conditions. One of the key conclusions exemplified by China's economic rise is that the extent of industrialization is limited by the extent of the market. One of the key strategies behind the creation and nurturing of a continually growing market in China is based on this premise: The free market is a public good that is very costly for nations to create and support. Market creation requires a powerful "mercantilist" state and the correct sequence of developmental stages; China has been successfully accomplishing its industrialization through these stages, backed by measured, targeted reforms and direct participation from its central and local governments. (JEL B00, H10, H40, H70, K00, L10, N00, O10, O20, O30, O40, O50, P00). [ABSTRACT FROM AUTHOR]

Despite the recent rapid development and greater openness of China's economy, FDI flows between China and technologically advanced countries are relatively small in both directions. We assess global capital flows in light of China's quid pro quo policy of exchanging market access for transfers of technology capital-accumulated know-how such as research and development (R&D) that can be used in multiple production locations. We first provide empirical evidence of this policy and then incorporate it into a multicountry dynamic general equilibrium model. This extension leads to a significantly better fit of the model to data. We also find large welfare gains for China-and welfare losses for its FDI partners-from quid pro quo. [ABSTRACT FROM AUTHOR]

The article discusses the raw patent file data on China-published patents and the technology capital transfers for market access in China. It states that the patents in China and U.S., and World Intellectual Property Organization (WIPO) applications are linked through foreign priority information included with the patent records. Moreover, it also mentions that the Applicant name text field of the records are manually process to define whether there is any connection to China in the field.

The article discusses the technology capital transfers for market access in China. It states that the China has a bigger share of proprietary capital with 9.3 percent by 2010. It notes that the country find low levels of consumption and high levels of savings and investments. Moreover, several tables which provide information on the model parameters common across countries, populations relative to the U.S., and the total factor productivities relative to U.S. are presented.

China's average household saving rate is one of the highest in the world. One popular view attributes the high saving rate to fast-rising housing prices and other living costs in China. This article uses simple economic logic to show that rising housing prices and living costs per se cannot explain China's persistently high household saving rate. Although borrowing constraints and demographic changes can help translate housing prices to the aggregate saving rate, quantitative simulations using Chinese data on household income, housing prices, and demographics indicate that rising mortgage costs contribute at most 5 percentage points to the Chinese aggregate household saving rate, given the down payment structure of China's mortgage markets. [ABSTRACT FROM AUTHOR]

The authors use a growth accounting framework to examine growth of the rapidly developing Chinese economy. Their findings support the view that, although feasible in the intermediate term, China's recent pattern of extensive growth is not sustainable in the long run. The authors believe that China will be able to sustain a growth rate of 8 to 9 percent for an extended period if it moves from extensive to intensive growth. They next compare potential growth in China with historical developments in the United States and the European Union. They discuss the differences in production structure and level of development across the three economies that may explain the countries' varied intermediate-term growth prospects. Finally, the authors provide an analysis of "green" gross domestic product and the role of natural resources in China's growth. [ABSTRACT FROM AUTHOR]

In a sharp departure from earlier trends, the price of U.S. imports from China rose 6 percent in the 2006-08 period. To explore the forces behind this surprising increase, the authors create a new import index that uses highly disaggregated data to track price developments in different product types. The index reveals that the largest price increases were concentrated in industrial supplies—goods that rely heavily on commodity inputs. The authors conclude that the surge in commodity prices through mid-2008 was the primary driver of the rising import prices from China. [ABSTRACT FROM AUTHOR]