Economic Disequilibrium between East Asia and North America and a New Equilibrium

　　Abstract: This article analyzes change in the disequilibrium between East Asia and North America since the 1990s focusing on different national structures and differences in production chains. The article argues that America’s sharply deepening trade deficit is a result of the migration of its industry abroad, while increasing trade surpluses in East Asia are a result of the region absorbing these migrating industries. For China, continuing inward industrial migration from within the East Asia region has resulted in the inflation of its respective trade surplus. To realize a new equilibrium between East Asia and North America, the United States needs to take steps to increase its exports and to control excessive consumer credit, and adopt a more responsible currency policy; For its part, East Asia must shift from a growth model driven by foreign demand to one driven by domestic demand, and it should move more rapidly into advanced industries while extending production chains into other regions. 

　　Authors: Zhang Hongli is a PhD Candidate in the Graduate School of the Chinese Academy of Sciences; 

　　Liu Dewei is a PhD Student in the Graduate School of the Chinese Academy of Social Sciences