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Has China Displaced its Competitors in High†tech Trade?

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  • Cong S. Pham
  • Xuan Nguyen
  • Pasquale Sgro
  • Xueli Tang

Abstract

This paper empirically investigated the extent to which China displaced its competitors in high†tech exports using disaggregated data for the period 1992–2013. To address the endogeneity problem, we used a comprehensive set of instruments for Chinese high†tech exports in relevant markets, including China's GDP and distances to those markets. Results of our IV regressions revealed that in most of the high†tech sectors, Chinese exports had displaced the exports of its developing competitors such as India, South American exporters like Brazil and Mexico, and South†East Asian countries like Malaysia, Singapore, Thailand and Vietnam, especially in the period prior to the 2007–08 global financial crisis. Yet, Chinese exports had been associated with more high†tech exports of developed exporters like OECD countries, South Korea and Japan. Our findings suggest that while China became the world's top high†tech exporter, its high†tech exported products had been substitutes to those of other developing and emerging economies but complementary to that of developed economies.

Suggested Citation

  • Cong S. Pham & Xuan Nguyen & Pasquale Sgro & Xueli Tang, 2017. "Has China Displaced its Competitors in High†tech Trade?," The World Economy, Wiley Blackwell, vol. 40(8), pages 1569-1596, August.
    • Handle: RePEc:bla:worlde:v:40:y:2017:i:8:p:1569-1596
    DOI: 10.1111/twec.12390
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    1. Baiardi, Donatella & Bianchi, Carluccio, 2019. "At the roots of China's striking performance in textile exports: A comparison with its main Asian competitors," China Economic Review, Elsevier, vol. 54(C), pages 367-389.
    2. Cunha, André Moreira & Lélis, Marcos Tadeu Caputi & Haines, Andrés Ernesto Ferrari & Franke, Luciane, 2023. "Exports of manufactured goods and structural change: Brazil in the face of Chinese competition," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 1-12.
    3. Christian Elleby & Wusheng Yu & Qian Yu, 2023. "The Chinese Export Displacement Effect Revisited: The Case of the East African Community," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 31(6), pages 4-32, November.
    4. D. Baiardi & C. Bianchi, 2018. "At the roots of China's striking performance in textile exports: a comparison with its main Asian competitors," Economics Department Working Papers 2018-EP03, Department of Economics, Parma University (Italy).
    5. Klaus S. Friesenbichler & Agnes Kügler & Andreas Reinstaller, 2021. "The Impact of Import Competition from China on Firm-level Productivity Growth in the EU," WIFO Working Papers 623, WIFO.
    6. Christian Elleby & Wusheng Yu & Qian Yu, 2018. "The Chinese Export Displacement Effect Revisited," IFRO Working Paper 2018/02, University of Copenhagen, Department of Food and Resource Economics.
    7. Artecona, Raquel & Perrotti, Daniel E. & Welslau, Lennard, 2022. "China and Latin America and the Caribbean: Exports competition in the United States market," Studies and Perspectives – ECLAC Office in Washington 48356, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).

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