Comparison of China-US economies on the axis of competitiveness: Export-led growth model

There is a trade war between the USA and China, which negatively affects the world market. This war manifests itself on the basis of technology and currency. China, which was previously a developing country, has now surpassed the United States as the world's second-largest economy as a result of institutional reforms. The aim of this study was to determine which growth model the Chinese economy has adopted in order to strengthen its competitiveness against the US economy. In line with this purpose, input-output analysis was used to investigate the export-led growth model. It was divided into two periods, 1990-2003 and 2003-2011, and compared. As a result of this comparison, distinct conclusions concerning the two countries were reached. In both periods, China was observed to have followed an export-led economic paradigm. China's low costs, weak exchange rate policies, and transition from low to high technology have provided it with competitive advantage. These macroeconomic reforms support expectations that China will be in a stronger position than the United States in the future and will have the world's largest economy. Furthermore, China's cheap commodities marketing made the United States reliant on Chinese goods. Thus, the foreign trade deficit with China has steadily increased. To lessen reliance on Chinese products, the US has implemented tariffs and enforced sanctions. Despite this, the United States' international trade imbalance with China has not decreased significantly. Therefore, the comparison of the China-US economy is of great importance for researchers. As well as defining the lines of the export-led growth model with input-output analysis, this study is unique in that it is divided into two periods and studied with institutional factors. The relationship between exchange rate, productivity and wage growth was examined.