In 2002, according to estimates by the U.S. government, the United States ran a merchandise trade deficit of US$ 103.1 billion with China. However, according to estimates by the Chinese government, the deficit was US$ 42.8 billion. It is often pointed out that as both a developing economy and an economy in transition, China lacks the resources to gather accurate trade data. While this is likely to be true in general, the trade data are likely to be of better quality than other kinds of economic data. Moreover, our research also shows that when it comes to U.S.-China trade, there are also significant problems with official U.S. export and import data. Our central claim is that neither the U.S. nor the Chinese official trade figures are completely accurate in terms of reflecting the true bilateral situation. The objective of this paper is to provide more accurate measurements of the trade imbalance for the purpose of facilitating more objective policy discussions between the two governments.