THE TRADE WAR BETWEEN USA AND CHINA: AN EVALATION IN COMPETITION POWER AND THE REAL EXCHANGE RATE

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The phenomenon of trade war between China and the United States is called by neo-mercantilism in its historical origin. The US aims to protect its economy through the implementation of mercantilist policy. The United States’ thesis is that China has created an unfavorable structure for unfair competition and foreign trade. On the other hand, China stresses that the US is trying to protect itself by kicking away the ladder. In this study, the phenomenon of the exchange rate-based competition, which is the argument of the USA, and the cost-based competition, which is the argument of China are subjected to econometric analyzes. According to the results of the analysis, China has the highest competitiveness in the foreign trade in the various manufactured goods (SITC-8) group. This is followed by processed goods (SITC-6), machinery and vehicles (SITC-7), which are divided into major classes, respectively. The findings show that China is not only a competitive power based on exchange rate, but also that improvements in capital accumulation and competitiveness play an important role in increasing exports.

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Trade War , Competitiveness Power , Time Series Analyses

Abant Sosyal Bilimler Dergisi

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Abant Sosyal Bilimler Dergisi