Journal Press India®

US-China Trade: What does Revealed Comparative Advantage Tell Us?

Vol 8 , Issue 1 , January - June 2021 | Pages: 1-25 | Research Paper  

Article has been added to the cart.View Cart (0)

Author Details ( * ) denotes Corresponding author

1. * K. V. Bhanumurthy, Professor, Department of USME, Delhi Technological University, Delhi, India (
2. Harish Kumar, Assistant Professor, Department of Commerce, Shri Ram College of Commerce, University of Delhi, Delhi, India (

The general methodology in this paper has been to estimate the Revealed Comparative Advantage (RCA) in the case of U.S. and China. Also, with the help of a set of semi-log growth equations, the trends in exports and RCA are studied. China’s export performance is much better than that of US. In terms of RCA, the US has not shown any significant growth in RCA of industrial and high technology exports, while US has gained in intermediate exports. China has seen increased growth rate in RCA of high technology exports, where US has lost the advantage. The dynamics of trade patterns between countries is amply justified through their respective long term growth in comparative advantage. Since the two countries’ trade patterns have been evolving according to their respective RCA, there seems to be little justification for either country to escalate the trade war by imposing trade restrictions.


Revealed comparative advantage; US-China trade; Long term patterns; Export patterns.

  1. Balance, R., Forstner, H., & Murray, T. (1985). On measuring comparative advantage: A note on bowen Indices. Review of World Economics, 121(2), 346-350.
  2. Balassa, B. (1965). Trade liberalization and revealed comparative advantage. Manchester School of Economics and Social Studies, 33(2), 99-123.
  3. Batra, A., & Khan, Z. (2005). Revealed comparative advantage: An analysis for India and China. Indian Council for Research on International Economic Relations (ICRIER). New Delhi: Indian Council for Research on International Economic Relations (ICRIER).
  4. Bhanu Murthy, K. V., & Anjala, K. (2019). US-China currency and trade war: Round one to China!. Transnational Corporations Review, 11(4), 290-297. DOI: 10.1080/19186444.2019.1684134.
  5. Bhanu Murthy, K. V., & Anjala, K. (2019a). US–China trade disputes: Studying long-term trade patterns, Management and Economics Research Journal, 5(4), 1-16.
  6. Bowen, H. (1983). On the theoretical interpretation of trade intensity and revealed comparative advantage. Review of World Economics, 119(3), 464-472.
  7. Brakman, S., Garretsen, H., & Marrewijk, C. V. (2005). Cross- border mergers and acquisitions: On revealed comparative advantage and merger waves, Working Paper Series No. 1602, CESifo, Munich, Germany.
  8. Chow, Peter. C. Y. (1990). The revealed comparative advantage of the East Asian NICs. The International Trade Journal, 5(2), 235 – 262.
  9. Dalum B., Laursen K., & Villumsen G. (1998). Structural change in OECD export specialization patterns: De-specialization and 'stickiness'. International Review of Applied Economics, 12(3), 423-443.
  10. Faustino, H. (2008). Intra-industry trade and revealed comparative advantage: An inverted- U relationship. WP03/2008/DE/SOCIUS, Department of Economics, School of Economics and Management, Technical University of Lisbon, Portugal.
  11. Ferto, Imre., & Lionel, J. H. (2002). Revealed comparative advantage and competitiveness in Hungarian agri-food sectors. Discussion Paper Series 2002/8, Institute of Economics, Hungary Academy of Sciences, Budapest. 
  12. Hinloopen, J., & Van Marrewijk, C. (2001). On the empirical distribution of the balassa index. Review of World Economics, 137(1), 1-35.
  13. Huang, Y., Lin, C., Liu, S., & Tang, H. (2018). Trade linkages and firm value: Evidence from the 2018 US-China “Trade War.” SSRN Working Paper
  14. Laursen, K. (1998). Revealed comparative advantage and the alternatives as measures of international specialization. DRUID Working Paper 98-30, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
  15. Leu, G. M. (1998), Changing Comparative Advantage in East Asian Economies, SABRE Working Papers 1998 Working Paper Series, WP. No. 3-98, School of Accounting and Business Research Center, NTU, Nanyang Avenue, Singapore.
  16. Li, Kui-Wai., & Bender, S. (2003). Relative advantage of manufacture exports among world regions: 1981-1999. APEC Study Center Consortium Annual Conference, Phuket, Thailand.
  17. Liesner, H. (1958). The European common market and British industry. Economic Journal, 68, 302-316.
  18. Meltzer, J. P., & Shenai, N. (2019). The US-China economic relationship: A comprehensive approach. In Global Economic and Development Policy Brief.
  19. Morrison, W. M. (2018). China-US Trade Issues, Congressial Research Service, Summary, 7-5700, RL 3356. Retrieved from reports/RL33536.html
  20. Smyth, D. A. (2005). Ireland’s revealed comparative advantage. Quarterly Bulletin, Central Bank of Ireland. Dublin, 1, 101-114.
  21. Utkulu, U., & Seymen, D. (2004). Revealed comparative advantage and competitiveness: Evidence for Turkey vis-à-vis the EU. European Trade Study Group 6th Annual Conference (pp. 1-27). Nottingham: ETSG 2004.
  22. Vollrath, T. (1991). A theoretical evaluation of alternative trade intensity measures of revealed comparative advantage. Review of World Economics, 127(2), 265-280.
  23. Widgren, M. (2005). Revealed comparative advantage in the internal market, Discussion Papers No. 989, The Research Institute of the Finnish Economy, Finland.
  24. Yeats, A. (1985). On the appropriate interpretation of the revealed comparative advantage index: Implications of a methodology based on industry sector analysis. Review of World Economics, 121(1), 61-73.
Abstract Views: 76
PDF Views: 9

By continuing to use this website, you consent to the use of cookies in accordance with our Cookie Policy.