Transcript World Forecast Overview

International Trade Data: Classification,
Sources, and Applications
Prepared for NABE’s 5th Annual
Professional Development Seminar
June 16-18
Federal Reserve Bank of Dallas
Allen Shaw
Chief Economist
Global Economic Consulting Associates, Inc.
1437 Country Club Drive
Springfield, PA 19064
Phone: (610) 490-2548
Fax: (610) 399-3575
Email: [email protected]
Discussion Outline
1. International Data Classifications
2. Sources
3. Applications
3.1 Forecasting
3.2 Potential Market Analysis
3.3 International Trade Analysis
2
1. International Trade Data
Classifications

Three commonly used classifications:
1. Broad economic category (BEC)
Equivalent to BEA’s end-use category
2. Standard international trade classification (SITC)
3. Harmonized system (HS)
3
1. International Trade Data
Classifications (Continued)
1.1 Broad Economic Category (BEC)
4
1. International Trade Data
Classifications (Continued)
1.1 Broad Economic Category (BEC)

The BEC was originally designed to serve as a
means for converting external trade data compiled on
the SITC into end-use categories that are meaningful
within the framework of the System of National
Accounts (SNA), namely categories approximating
the three basic classes of goods in the SNA: capital
goods, intermediate goods and consumption goods.
Specifically, the subcategories of the BEC can be
aggregated to approximate these three classes of
goods.
5
1. International Trade Data
Classifications (Continued)

This aggregation permits external trade statistics to
be considered jointly with other sets of general
economic statistics, such as national accounts and
industrial statistics, for national, regional or world
level economic analysis.
6
Table 1: Imports by Broad Economic Category, 2006
World
South Africa Cote d'Ivoire
Zambia
Ghana
Uganda
Tanzania
Imports by End Use, Million $
4,862.4
39,637.3
5,072.3
5,555.9
6,012.5
1,905.1
1,236.9
64,282
3,327.5
923.8
1,180.4
14.6
6.8
42.1
12.4
5,508
72.8
2,253.3
1.6
7.6
3.3
21.8
44.8
2,405
1,625.2
694.5
69.9
11.8
2.1
26.3
25.0
2,455
403.2
94.6
0.0
7.3
3.7
29.6
9.4
548
479.0
697.7
49.0
15.9
6.1
38.6
4.7
1,291
5.53
7.56
1 - Food and beverages
26.61
61.66
2 - Industrial supplies nes
14.61
7.89
3 - Fuels and lubricants
25.62
8.64
4 - Capital goods (except transport equipment), and parts and accessories
12.41
9.35
5 - Transport equipment, and parts and accessories
12.62
2.96
6 - Consumption goods nes
2.60
1.92
7 - Goods nes
100.00
100.00
Total
Source: Global Economic Consulting Associates (GECA), Inc. (www.gecainc.com)
Note: Computed from UN Comtrade using GECA's international trade software package - VITAL.
60.42
16.77
21.43
0.27
0.12
0.76
0.23
100.00
3.03
93.68
0.06
0.32
0.14
0.91
1.86
100.00
66.20
28.29
2.85
0.48
0.09
1.07
1.02
100.00
73.59
17.26
0.01
1.33
0.68
5.41
1.72
100.00
37.10
54.05
3.80
1.23
0.47
2.99
0.36
100.00
1 - Food and beverages
2 - Industrial supplies nes
3 - Fuels and lubricants
4 - Capital goods (except transport equipment), and parts and accessories
5 - Transport equipment, and parts and accessories
6 - Consumption goods nes
7 - Goods nes
Total
629,422
3,026,975
1,661,767
2,913,770
1,411,109
1,435,116
295,777
11,373,936
Import Distribution, %
7
1. International Trade Data
Classifications (Continued)
1.2 SITC

SITC was developed by the UN with the intention of
classifying traded products not only on the basis of
their material and physical properties and stage of
processing but also their economic functions in order
to facilitate economic analysis.
Rev. 1 from 1962,
Rev. 2 from 1976,
Rev. 3 from 1988, and
Rev. 4 from 2007
8
1. International Trade Data
Classifications (Continued)

Advantages
Classifies all commodities into headings suitable for
economic analysis
Longer historical data

Disadvantages
Lack of newer products
9
1. International Trade Data
Classifications (Continued)

Rev. 4 has:
10 one-digit sections,
67 two-digit divisions,
262 three-digit groups,
1,023 four-digit groups, and
2,970 five-digit headings
10
1. International Trade Data
Classifications (Continued)

SITC’s 10 Sections:
0 - Food and live animals
1 - Beverages and tobacco
2 - Crude materials, inedible, except fuels
3 - Mineral fuels, lubricants and related materials
4 - Animal and vegetable oils, fats and waxes
5 - Chemicals and related products, nes
6 - Manufactured goods classified chiefly by material
7 - Machinery and transport equipment
8 - Miscellaneous manufactured articles
9 - Commodities and transactions not classified
elsewhere in the SITC
11
1. International Trade Data
Classifications (Continued)
1.3 Harmonized System (HS)

HS has a more precise breakdown of the products'
individual categories and is widely used by customs
authorities.
HS1988,
HS1996,
HS2002, and
HS2007
Has
about 6,000 commodities
12
1. International Trade Data
Classifications (Continued)

HS’s 96 Chapters:
01-05
06-15
16-24
25-27
28-38
39-40
41-43
44-49
50-63
64-67
68-71
72-83
84-85
86-89
90-97
98-99
Animal & Animal Products
Vegetable Products
Foodstuffs
Mineral Products
Chemicals & Allied Industries
Plastics / Rubbers
Raw Hides, Skins, Leather, & Furs
Wood & Wood Products
Textiles
Footwear / Headgear
Stone / Glass
Metals
Machinery / Electrical
Transportation
Miscellaneous
Unspecified, Reserved for National Use
13
Discussion Outline
1. International Data Classifications
2. Sources
3. Applications
3.1 Forecasting
3.2 Potential Market Analysis
3.3 International Trade Analysis
14
2. Sources
2.1 Annual Data
1. United Nations - Commodity Trade Statistics
Database (Comtrade) (http://comtrade.un.org/db/)
Has all three classifications in various revisions
 Small lunch is free and all you can eat is $5,775/yr.

2. Statistics Canada - World Trade Analyzer
(http://www.statcan.ca/bsolc/english/bsolc?catno=6
5F0016X)
 Adjusts
and simplifies UN’s Comtrade
 Uses SITC Rev. 2 for trade data for over 180
partners and over 800 commodities from 1985
15
2. Sources (Continued)

1-3 Users: $4,155 initial purchase, $2,070
subsequent update
3. Individual countries’ customs or statistical
agency (see IMF’s SDDS or GDDS websites)
4. Global Economic Consulting Associates, Inc.
(http://www.gecainc.com)

Carries Comtrade with analytical indicators
16
2. Sources (Continued)
2.2 Monthly Data
1. Individual countries’ customs or statistical
agency (see IMF’s SDDS or GDDS websites)


EU countries, Japan, etc. are free. Others cost as
much as $10,000 per month.
Difficult to establish right contacts because of
language and technical problems
2. IMF Direction of Trade Statistics
(http://www.imfstatistics.org/DOT/)
Contains
only total merchandise
$525/yr.
17
2. Sources (Continued)
3. Global Economic Consulting Associates, Inc.
(http://www.gecainc.com)



6-10 digit HS commodity details for about 60
countries.
With analytical software
Affordable
18
Discussion Outline
1. International Data Classifications
2. Sources
3. Applications
3.1 Forecasting
3.2 Potential Market Analysis
3.3 International Trade Analysis
19
3. Applications
3.1 Forecasting

Use end-use classification that can link imports to
final demand
20
Table 2A: Exports of Goods by Type of Product
Bill. of $
Total Exports of goods
Foods, feeds, and beverages
Industrial supplies and materials
Capital goods, except automotive
Automotive vehicles, engines, and parts
Consumer goods, except automotive
Other
% Distribution
Total Exports of goods
Foods, feeds, and beverages
Industrial supplies and materials
Capital goods, except automotive
Automotive vehicles, engines, and parts
Consumer goods, except automotive
Other
Source: NIPA Table 4.2.5
2001
2002
2003
2004
2005
731.2
49.4
155.3
321.7
75.4
88.3
41.0
697.6
49.6
153.5
290.4
78.9
84.4
40.7
724.4
55.0
168.3
293.7
80.6
89.9
36.9
818.3
56.6
199.5
331.4
89.2
103.2
38.4
907.0 1,030.5 1,152.9
59.0
66.0
84.7
227.5 267.3 303.4
362.3 413.9 447.3
98.6 107.2 121.0
116.1 130.0 146.6
43.6
46.2
49.9
100.0
6.8
21.2
44.0
10.3
12.1
5.6
100.0
7.1
22.0
41.6
11.3
12.1
5.8
100.0
7.6
23.2
40.5
11.1
12.4
5.1
100.0
6.9
24.4
40.5
10.9
12.6
4.7
100.0
6.5
25.1
39.9
10.9
12.8
4.8
21
2006
100.0
6.4
25.9
40.2
10.4
12.6
4.5
2007
100.0
7.3
26.3
38.8
10.5
12.7
4.3
Table 2B: Imports of Goods by Type of Product
2001
Bill. of $
Total Imports of goods
Foods, feeds, and beverages
Industrial supplies and materials,
except petroleum and products
Petroleum and products
Capital goods, except automotive
Automotive vehicles, engines, and parts
Consumer goods, except automotive
Other
% Distribution
Total Imports of goods
Foods, feeds, and beverages
Industrial supplies and materials,
except petroleum and products
Petroleum and products
Capital goods, except automotive
Automotive vehicles, engines, and parts
Consumer goods, except automotive
Other
Source: NIPA Table 4.2.5
2002
2003
2004
2005
2006
2007
1,167.9 1,189.3 1,283.9 1,499.5 1,702.0 1,880.4 1,979.4
46.6
49.7
55.8
62.1
68.1
74.9
81.7
164.8
103.6
298.0
189.8
284.5
80.7
158.4
103.5
283.3
203.7
308.0
82.7
174.4
133.1
295.9
210.1
334.0
80.6
225.1
180.5
343.6
228.2
377.1
82.9
264.8
251.9
379.3
239.5
411.5
87.0
290.1
302.4
418.3
256.7
446.1
91.9
291.5
330.7
444.9
258.9
478.1
93.6
100.0
4.0
100.0
4.2
100.0
4.3
100.0
4.1
100.0
4.0
100.0
4.0
100.0
4.1
14.1
8.9
25.5
16.3
24.4
6.9
13.3
8.7
23.8
17.1
25.9
7.0
13.6
10.4
23.0
16.4
26.0
6.3
15.0
12.0
22.9
15.2
25.1
5.5
15.6
14.8
22.3
14.1
24.2
5.1
15.4
16.1
22.2
13.7
23.7
4.9
14.7
16.7
22.5
13.1
24.2
4.7
22
Table 2C: Trade Balance, Bill. $
Total Goods and Services
Goods
Foods, feeds, and beverages
Industrial supplies and materials
Capital goods, except automotive
Automotive vehicles, engines, and parts
Consumer goods, except automotive
Other
Services
Source: NIPA Table 4.2.5
2001
-367.0
-436.7
2.8
-113.1
23.7
-114.4
-196.2
-39.7
69.7
23
2002
-424.3
-491.7
-0.1
-108.4
7.1
-124.8
-223.6
-42.0
67.4
2003
-499.3
-559.5
-0.8
-139.2
-2.2
-129.5
-244.1
-43.7
60.2
2004
-615.4
-681.2
-5.5
-206.1
-12.2
-139.0
-273.9
-44.5
65.8
2005
-714.6
-795.0
-9.1
-289.2
-17.0
-140.9
-295.4
-43.4
80.4
2006
-762.0
-849.9
-8.9
-325.2
-4.4
-149.5
-316.1
-45.7
87.9
2007
-708.0
-826.5
3.0
-318.8
2.4
-137.9
-331.5
-43.7
118.5
3. Applications (Continued)
3.1 Forecasting

Analysis focuses on:
Exchange rate pass-through
Relative price and income elasticities between exports and
imports
24
3. Applications (Continued)
3.2 Potential Market Analysis


Use HS classification that gives commodity details
Analysis focuses on market size or market share
25
3. Applications (Continued)
3.3 International Trade Analysis


Use annual data in SITC for longer historical data and
HS for the latest periods
Analysis focuses on:
A. Exports:
 Market share
 Export concentration as measured by Herfindahl
indices
 Similarity
 Balassa’s revealed comparative advantage
 Export decomposition
26
3. Applications (Continued)
B. Imports:
Import distribution
Import concentration as measured by Herfindahl
indices
Shaw-Kilpatrick-Lee’s revealed symmetric
import concentration
C. Intra-industry Trade
Grubel-Lloyd index
Vona index
27
3. Applications (Continued)
D. Overall International Trade Analysis
Trade openness ratio
Trade complementarity
Shaw-Kilpatrick-Lee’s revealed symmetric
competitiveness index
Mirror trade data discrepancies as an indicator for
customs evasion
Cross-sectional unit price variation as an indicator for
trade-based laundering or customs evasion
28
3. Applications (Continued)
Question: Does China compete with the US
in the world export markets?
 We could address the question by:
Analyzing the degree of overlapping in top 40
commodities in exports
Examining similarity index (SI), 0 < SI < 100
0
= not similar at all
100 = identical export distribution
Comparing revealed comparative advantages
29
3. Applications (Continued)

Table 3 compares Chinese and US exports to the
world (the top 40 products) in terms of export
distribution at HS2002 6-digit level in 2006. It is
interesting to note that among the top 40 products (in
terms of export distribution), only 11 products
overlap.
30
Table 3: Comparison of China and US Exports to the World, Top 40 Products in Terms of Export Distribution at the HS2002 6-digit Level, 2006
Ranking
Commodity
China
1
847130 - Portable digital auto. data processing machines, weighing not >10kg, consis ...
3.97
2
852520 - Transmission app. for radio-telephony/radio-telegraphy/radio-broadcasting/t ...
3.69
3
847330 - Parts & accessories (excl. covers, carrying cases and the like) suit. for u ...
3.37
4
847160 - Input/output units (of auto. data processing machines), whether or not cont ...
2.65
5
852990 - Parts suit. for use solely/princ. with the app. of 85.25-85.28, other than ...
2.47
6
854221 - Monolithic integrated circuits, digital
1.85
7
901380 - Liquid crystal devices not constituting arts. provided for more specificall ...
1.37
8
847170 - Storage units (of auto. data processing machines)
1.23
9
852812 - Reception app. for television, whether or not incorp. radio-broadcast recei ...
0.91
10
852190 - Video recording/repr. app. other than magnetic tape-type, whether or not in ...
0.79
11
853400 - Printed circuits
0.79
12
852540 - Still image video cameras & oth. video camera recorders; digital cameras
0.71
13
850440 - Static converters
0.71
14
611030 - Jerseys, pullovers, cardigans, waist-coats & sim. arts., knitted or crochet ...
0.62
15
860900 - Containers (incl. conts. for the tpt. of fluids) specially designed & equip ...
0.62
16
851999 - Sound repr. app. n.e.s. in 85.19, not incorp. a sound recording device
0.61
17
640399 - Footwear (excl. waterproof) with outer soles of rubber/plastics/composition ...
0.58
18
851750 - Apparatus for carrier-current line systems/digital line systems (excl. of 8 ...
0.55
19
640299 - Footwear (excl. waterproof) with outer soles & uppers of rubber/plastics (e ...
0.55
20
610910 - T-shirts, singlets & oth. vests, knitted or crocheted, of cotton
0.53
21
950410 - Video games of a kind used with a television receiver
0.52
22
890190 - Vessels for the tpt. of gds. & for the tpt. of both persons & gds. (excl. o ...
0.52
23
847141 - Automatic data processing machines comprising in the same housing at least ...
0.51
24
847150 - Digital processing units other than of 8471.41/8471.49, whether or not cont ...
0.50
25
847180 - Automatic data processing machine units (excl. of 8471.50-5471.70)
0.49
26
620462 - Women's/girls', trousers, bib & brace overalls, breeches & shorts (excl. sw ...
0.48
27
900912 - Electrostatic photocopying app. op. by repr. the original image via an inte ...
0.47
28
611020 - Jerseys, pullovers, cardigans, waist-coats & sim. arts., knitted or crochet ...
0.46
29
420212 - Trunks, suit-cases, vanity-cases, executive-cases, brief-cases, school satc ...
0.46
30
271019 - Petroleum oils & oils obt. from bituminous mins. (excl. crude) & preps. oth ...
0.42
31
852290 - Parts (excl. pick-up cartridges) & accessories suit. for use solely/princ. ...
0.40
32
848180 - Taps, cocks, valves & sim. appls. for pipes/boiler shells/tanks/vats or the ...
0.38
33
850780 - Electric accumulators, incl. separators therefor, whether or not rect. (inc ...
0.37
34
392690 - Articles of plastics & arts. of oth. mats. of 39.01-39.14, n.e.s. in Ch.39
0.36
35
950490 - Articles for funfair/table/parlour games (excl. playing cards), incl. pinta ...
0.36
36
841510 - Window/wall type air-conditioning machines, self-contained/split-system, co ...
0.35
37
270112 - Bituminous coal, whether or not pulverised but not agglom.
0.34
38
620342 - Men's/boys' trousers, bib & brace overalls, breeches & shorts (excl. swimwe ...
0.33
39
940490 - Other arts. of bedding & sim. furnishing...fitted with springs/stuffed/inte ...
0.32
40
730890 - Structures...& parts of structures...of iron/steel (excl. of 7308.10-7308.4 ...
0.32
Source: Global Economic Consulting Associates (GECA), Inc.
Note: Computed from UN Comtrade using GECA's international trade software package - VITAL.
31
Ranking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
Commodity
US
880240 - Aeroplanes & oth. aircraft, of an unladen wt. >15000kg
3.54
854221 - Monolithic integrated circuits, digital
3.18
999999 - Commodities not specified according to kind Commodities not specified according to kind
3.13Commodities n
847330 - Parts & accessories (excl. covers, carrying cases and the like) suit. for u ...
1.92
870323 - Vehicles (excl. of 87.02 & 8703.10) princ. designed for the tpt. of persons ...
1.83
880330 - Parts of aeroplanes/helicopters, other than propellers, rotors, under-carri ...
1.75
271019 - Petroleum oils & oils obt. from bituminous mins. (excl. crude) & preps. oth ...
1.55
870324 - Vehicles (excl. of 87.02 & 8703.10) princ. designed for the tpt. of persons ...
1.28
300490 - Medicaments (excl. of 30.02/30.05/30.06) consisting of mixed/unmixed prods. ...
1.23
870899 - Parts & accessories of the motor vehicles of 87.01-87.05, n.e.s. in 87.06-8 ...
1.12
841191 - Parts of the turbo-jets/turbo-propellers of 8411.11-8411.22
0.97
870829 - Parts & accessories of bodies (incl. cabs) of the motor vehicles of 87.01-8 ...
0.95
854229 - Monolithic integrated circuits, other than digital
0.93
710239 - Diamonds, non-industrial other than unwkd./simply sawn/cleaved/bruted
0.88
843143 - Parts suit. for use solely/princ. with the boring/sinking mach. of 8430.41/ ...
0.71
710812 - Gold (incl. gold plated with platinum), in unwrought forms (excl. powder)
0.69
100590 - Maize (corn), other than seed
0.69
120100 - Soya beans, whether or not broken
0.67
880230 - Aeroplanes & oth. aircraft, of an unladen wt. >2000 kg but not >15000kg
0.64
901890 - Instruments & appls. used in medical/surgical/veterinary sciences, incl. ot ...
0.62
271011 - Light petroleum oils & preps.
0.58
847989 - Machines & mech. appls. having individual functions, n.e.s./incl. in Ch.84
0.58
852520 - Transmission app. for radio-telephony/radio-telegraphy/radio-broadcasting/t ...
0.58
870431 - Motor vehicles for the tpt. of gds. (excl. of 8704.10), with spark-ignition ...
0.53
847180 - Automatic data processing machine units (excl. of 8471.50-5471.70)
0.52
851790 - Parts of the app. & equip. of 85.17
0.52
852990 - Parts suit. for use solely/princ. with the app. of 85.25-85.28, other than ...
0.49
840734 - Spark ignition recip. piston engines of a kind used for the propulsion of v ...
0.44
520100 - Cotton, not carded/combed
0.43
300210 - Antisera & oth. blood fractions & modified immunological prods., whether or ...
0.42
841199 - Parts of the oth. gas turbines of 8411.81 & 8411.82
0.42
851750 - Apparatus for carrier-current line systems/digital line systems (excl. of 8 ...
0.42
970110 - Paintings, drawings & pastels, executed entirely by hand (excl. drawings of ...
0.41
711319 - Articles of jewellery & parts thereof , of oth. precious metal (excl. silve ...
0.40
847170 - Storage units (of auto. data processing machines)
0.40
847160 - Input/output units (of auto. data processing machines), whether or not cont ...
0.40
392690 - Articles of plastics & arts. of oth. mats. of 39.01-39.14, n.e.s. in Ch.39
0.39
100190 - Wheat other than durum wheat; meslin
0.39
841112 - Turbo-jets, of a thrust >25 kN
0.38
847150 - Digital processing units other than of 8471.41/8471.49, whether or not cont ...
0.38
3. Applications (Continued)

Similarity index is defined by Finger and Kreinin as:
S(ab,c) =  Min [X i (ac), X i (bc)]
0 < S(ab,c) < 100
Where:
S(ab,c) = similarity between exports of countries
a and b to a common market c
X i (ac) = % share of commodity i in a’s exports to c
X i (bc) = % share of commodity i in b’s exports to c
32
Table 4: Examples of Similarity Index
Country A's Exports to the
Country B's Exports to the
World
World
Commodity
$
% Distribution
$
% Distribution
Case A: Somewhat Similar
1
20
16.7
500
50.0
2
40
33.3
300
30.0
3
60
50.0
200
20.0
Total
120
100.0
1,000
100.0
Minimum of Two
Countries' %
Distribution
16.7
30.0
20.0
66.7
Case B: Totally Different
1
120
2
0
3
0
Total
120
100.0
0.0
0.0
100.0
0
1,000
0
1,000
0.0
100.0
0.0
100.0
0.0
0.0
0.0
0.0
Case C: 100% Similar
1
2
3
Total
25.0
30.0
45.0
100.0
250
300
450
1,000
25.0
30.0
45.0
100.0
25.0
30.0
45.0
100.0
30
36
54
120
33
3. Applications (Continued)

Table 5 shows the similarity index between Chinese
and US exports at the HS2002 6-digit level. The
similarities between China’s exports to the world and
US exports to the world were also relatively low.
34
Table 5. Similarity Between Chinese and US Exports
at the HS2002 6-digit Level, 2002-2006
2002
2003
2004
2005
2006
China’s exports to the
world and US exports
to the world
33.01
33.30
34.11
35.38
Source: Global Economic Consulting Associates (GECA), Inc.
Note: 1/ Computed from UN Comtrade using GECA's international trade
software package - VITAL.
35
35.46
3. Applications (Continued)

Revealed Comparative Advantage (RCA), developed
by Bela Balassa1 in his 1965 paper, is a commonly
used indicator to show (“reveal”) export
competitiveness:
 RCA of
a commodity or sector is defined as a
country’s share in total world exports of that
commodity or sector relative to the country’s overall
share of world trade.
1. Balassa, B. (1965), “Trade Liberalization and Revealed Comparative
Advantage,” The Manchester School of Economic and Social Studies, Vol. 32,
pp. 99-123.
36
3. Applications (Continued)

RCA ranges from 0 to infinity with 1 as the breakeven point. An RCA value of less than 1 means that
the sector has no export comparative advantage,
while a value above 1 indicates that the sector has a
“revealed” comparative advantage. However, RCA is
not symmetrical in the sense that one cannot
compare both sides of the break-even point.
37
3. Applications (Continued)

Laursen2 modified RCA to make the indicator
symmetric, with the value ranging from -1 to +1
(zero is the break-even point). He named the
modified indicator “Revealed Symmetric
Comparative Advantage” (RSCA).
RSCA = (RCA -1) / (RCA + 1)
2. Laursen, Keld. (1998), “Revealed Comparative Advantage and the
Alternatives as Measures of International Specialization,” Danish Research
Unit for Industrial Dynamics, Working Paper No. 98-30.
38
Table 6: Examples of RCA and RSCA
Country A's Exports
Commodity
Total
X
Exports
(1)
(2)
World Exports
Commodity
Total
X
Exports
(3)
Case A: Increasing Comparative Advantage
2005
120.0
2,000.0
500.0
2006
150.0
2,200.0
510.0
2007
180.0
2,420.0
520.2
(4)
10,000.0
10,500.0
11,025.0
Country A's Export
Share
Commodity
Total
X
Exports
(5)=(1)/(3)
0.24
0.29
0.35
(6)=(2)/(4)
0.20
0.21
0.22
RCA
(7)=(5)/(6)
1.20
1.40
1.58
RSCA
(8)=((7)-1) /
((7)+1)
0.09
0.17
0.22
Case B: Decreasing Comparative Advantage
2005
90.0
2,000.0
500.0
10,000.0
0.18
0.20
0.90
-0.05
2006
94.5
2,200.0
510.0
10,500.0
0.19
0.21
0.88
-0.06
2007
99.2
2,420.0
520.2
11,025.0
0.19
0.22
0.87
-0.07
Note: RCA = Country A‘s share of commodity X in total world X exports / Country A's total export share of world trade
RSCA = (RCA - 1) / (RCA + 1)
39
3. Applications (Continued)

Table 7 shows a symmetric version of Balassa’s
RCA. It clearly demonstrates that as of 2006, China
was still not competing with the US in the same
product space. There are 1,339 out of 5,225 6-digit
commodities in which China and the US both have
RSCA > 0, or 25.6 percent of the total. Overall, the
correlation between RSCAs for the two countries is
-0.40, suggesting that the two countries are
competitive (or uncompetitive) in quite different
commodities.
40
Table 7: Comparison of China and US Exports to the World, Top 40 Products in Terms of Revealed Symmetric Comparative Advantage (RSCA) at HS2002 6-digit Level, 2006
China's Top 40 Products in terms of RSCA
Ranking
Commodity
1
071233 - Jelly fungi (Tremella spp.), dried, whole/cut/sliced/broken/in powder but n ...
2
610323 - Men's/boys' ensembles, knitted or crocheted, of synth. fibres
3
360410 - Fireworks
4
810294 - Unwrought molybdenum, incl. bars & rods obt. simply by sintering
5
610423 - Women's/girls' ensembles, knitted or crocheted, of synth. fibres
6
851672 - Toasters, elec.
7
610322 - Men's/boys' ensembles, knitted or crocheted, of cotton
8
460210 - Basketwork, wickerwork & oth. arts., made directly to shape from veg. mats. ...
9
071232 - Wood ears (Auricularia spp.), dried, whole/cut/sliced/broken/in powder but ...
10
630140 - Blankets (excl. elec.) & travelling rugs, of synth. fibres
11
293352 - Malonylurea (barbituric acid) & its salts
12
660199 - Umbrellas & sun umbrellas (excl. of 6601.10 & 6610.91), incl. walking-stick ...
13
091010 - Ginger
14
940430 - Sleeping bags
15
610832 - Women's/girls' nightdresses & pyjamas, knitted or crocheted, of man-made fi ...
16
090610 - Cinnamon & cinnamon-tree flowers, neither crushed/ground
17
070320 - Garlic, fresh/chilled
18
610722 - Men's/boys' nightshirts & pyjamas, knitted or crocheted, of man-made fibres ...
19
620721 - Men's/boys' nightshirts & pyjamas (excl. knitted or crocheted), of cotton
20
293221 - Coumarin, methylcoumarins & ethylcoumarins
21
280530 - Rare-earth metals, scandium & yttrium, whether or not intermixed/interalloy ...
22
050210 - Pigs'/hogs'/boars' bristles & hair & waste thereof
23
610422 - Women's/girls' ensembles, knitted or crocheted, of cotton
24
940530 - Lighting sets of a kind used for Christmas trees
25
293951 - Fenetylline (INN) & its salts
26
460120 - Mats, matting & screens of veg. mats.
27
071239 - Mushrooms (excl. of 0712.31-0712.33) & truffles, dried, whole/cut/sliced/br ...
28
630253 - Table linen (excl. knitted or crocheted), of man-made fibres
29
660191 - Umbrellas & sun umbrellas (excl. of 6601.10), having a telescopic shaft
30
720280 - Ferro-tungsten & ferro-silico-tungsten, in granular/powder form
31
294140 - Chloramphenicol & its derivs.; salts thereof
32
630619 - Tarpaulins, awnings & sunblinds, of textile mats. other than cotton/synth. ...
33
293213 - Furfuryl alcohol & tetrahydrofurfuryl alcohol
34
640590 - Footwear other than with uppers of leather/composition leather/textile mats ...
35
293293 - Piperonal
36
621142 - Track suits (excl. knitted or crocheted), women's/girls'; oth. garments, n. ...
37
630622 - Tents, of synth. fibres
38
611211 - Track suits, knitted or crocheted, of cotton
39
640219 - Sports footwear other than ski-boots/cross-country ski footwear/snowboard b ...
40
293010 - Dithiocarbonates (xanthates)
Source: Global Economic Consulting Associates (GECA), Inc.
Note: 1/ Computed from UN Comtrade using GECA's international trade software package - VITAL.
2/ RSCA ranges from -1 to 1 with 0 as the breakeven point.
Adddenda
China' RSCA US RSCA
0.91
-0.06
0.91
0.03
0.91
-0.41
0.90
-0.13
0.90
0.04
0.89
-0.54
0.89
0.02
0.89
-0.52
0.89
-0.02
0.88
-0.60
0.88
-0.29
0.88
-0.19
0.88
-0.32
0.88
-0.59
0.88
-0.66
0.88
-0.37
0.88
-0.33
0.88
-0.68
0.88
-0.26
0.87
-0.33
0.87
0.10
0.87
-0.17
0.87
0.04
0.87
-0.60
0.87
0.00
0.87
-0.24
0.87
-0.17
0.87
-0.63
0.87
-0.55
0.87
-0.21
0.87
0.09
0.87
-0.17
0.87
-0.20
0.87
-0.39
0.87
-0.36
0.86
-0.61
0.86
-0.48
0.86
-0.26
0.86
-0.43
0.86
-0.28
41
Ranking
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
US Top 40 Products in terms of RSCA
Commodity
930111 - Artillery weapons (e.g., guns, howitzers & mortars), self-propelled
293292 - 1-(1,3-Benzodioxol-5-yl)propan-2-one
292512 - Glutethimide (INN)
100700 - Grain sorghum
100610 - Rice in the husk (paddy/rough)
110423 - Corn (maize), worked othw. than into flour/groats/meal (e.g., hulled/pearle ...
080211 - Almonds, in shell
551332 - Woven fabrics of polyester staple fibres, cont.<85% by wt. of such fibres, ...
470419 - Chemical wood pulp, sulphite, other than dissolving grades, unbleached, non ...
810730 - Cadmium waste & scrap
262091 - Ash & residues (excl. from the mfr. of iron/steel) cont. antimony/beryllium ...
100590 - Maize (corn), other than seed
283670 - Lead carbonates
870490 - Motor vehicles for the tpt. of gds., n.e.s. in 87.04
230610 - Oil-cake & oth. solid residues, whether or not ground/in pellets, from extr ...
391211 - Cellulose acetates, non-plasticised, in primary forms
391212 - Cellulose acetates, plasticised, in primary forms
293295 - Tetrahydrocannabinols (all isomers)
290313 - Chloroform (trichloromethane)
293963 - Lysergic acid & its salts
250820 - Decolourising earths & fuller's earth
151221 - Cotton seed oil, crude, whether or not gossypol has been removed
520100 - Cotton, not carded/combed
030311 - Sockeye salmon (red salmon) (Oncorhynchus nerka), frozen (excl. fillets/oth ...
030373 - Coalfish (Pollachius virens), frozen (excl. fillets/oth. fish meat of 03.04 ...
811219 - Beryllium & arts. thereof , n.e.s. in 81.12
080212 - Almonds, shelled
151521 - Maize (corn) oil, crude
740323 - Copper-nickel base alloys (cupro-nickel)/copper-nickel-zinc base alloys (ni ...
283620 - Disodium carbonate
290344 - Dichlorotetrafluoroethanes & chloropentafluoroethane
080231 - Walnuts, in shell
030360 - Cod (Gadus morhua/ogac/macrocephalus), frozen (excl. fillets/oth. fish meat ...
292122 - Hexamethylenediamine & its salts
292610 - Acrylonitrile
300331 - Medicaments cont. insulin, not put up in measured doses/forms/packagings fo ...
230700 - Wine lees; argol
290551 - Ethchlorvynol (INN)
291534 - Isobutyl acetate
381119 - Anti-knock preps. other than those based on lead comps.
Adddenda
US RSCA China' RSCA
0.91
0.00
0.91
0.00
0.91
0.00
0.90
0.08
0.90
0.31
0.90
0.00
0.89
-0.06
0.88
-0.11
0.88
-0.48
0.87
-0.02
0.86
0.00
0.85
0.27
0.85
-0.43
0.85
-0.03
0.85
0.57
0.85
-0.75
0.84
-0.79
0.84
-0.05
0.84
-0.86
0.84
0.00
0.84
0.20
0.84
0.20
0.84
-0.85
0.84
-0.45
0.83
-0.69
0.83
-0.10
0.83
-0.02
0.83
0.61
0.82
-0.39
0.82
0.51
0.82
0.30
0.82
0.00
0.82
-0.60
0.82
-0.24
0.81
-0.54
0.81
0.01
0.81
0.32
0.81
0.00
0.81
-0.22
0.81
-0.55
3. Applications (Continued)

China’s comparative advantage as an exporter still
lies in relatively low value-added products which
require higher labor inputs. I should note that
compared to other exporting countries China has not
shown comparative advantage in high value-added
manufacturing products, but China’s export shares
and RSCA values in this respect are rising.
42
3. Applications (Continued)
Question: Does China compete with the US
in the world export markets?
Answer: As of 2006, China was still not
competing with the US in the same product
space, but the overlapping product space is
getting bigger every year.
43
Thank You!
Questions?
[email protected]
44