ENGLE GRENGER COINTEGRATION AND GRENGER CAUSALITY ANALYSIS BETWEEN US INDUSTRIAL PRODUCTION AND CHINA TRADE BALANCE

Abstract

While the growing rift between Washington and Beijing over disagreements on trade, human rights, market and technology competition poses a threat to the strengthening trade ties between the countries and has put their governments at odds over a range of economic and political issues, US-China trade in goods reached a new high in 2022, reminding us how closely connected consumers and businesses in the world's two largest economies are. In 2022, China accounted for 7.5% of total US exports to the world of $2.1 trillion, China accounted for 16.5% of total US imports of $3.2 trillion, and China accounted for 32.4% of the total US trade deficit (https://www.indiainfoline.com/article/news-top-story/usa-s-trade-deficit-with-china). China's Trade Balance recorded a surplus of USD 80.6 billion in July 2023, compared to a surplus of USD 70.7 billion in the previous month (https://www.ceicdata.com/en/indicator/china/trade-balance).