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Why Are China's Exports Special?: The Role of FDI, Regional Trade, and Government Policies

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  • Yan Liang
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    Abstract

    This paper investigates why China is able to achieve a high level of technological sophistication in its exports beyond its current level of development. It concludes that a great portion of the high-tech exports are of the processing and assembly type and produced by foreign-invested enterprises. China's comparative advantage of labor abundance and the Chinese government's foreign direct investment (FDI) policy have encouraged the expansion of FDI-led export in general and FDI-led processing trade in particular. Given the disadvantages of the FDI-led export expansion, reform of the government's FDI and trade policies is needed to improve technological development and to enhance China's production and trade structures.

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    Bibliographic Info

    Article provided by M.E. Sharpe, Inc. in its journal Chinese Economy.

    Volume (Year): 41 (2008)
    Issue (Month): 6 (November)
    Pages: 99-118

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    Handle: RePEc:mes:chinec:v:41:y:2008:i:6:p:99-118

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    Web page: http://mesharpe.metapress.com/link.asp?target=journal&id=110901

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    1. Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2007. "Specialisation across Varieties within Products and North-South Competition," Working Papers 2007-06, CEPII research center.
    2. Kim Song Tan & Hoe Ee Khor, 2006. "China's Changing Economic Structure and Implications for Regional Patterns of Trade, Production and Integration," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(6), pages 1-19.
    3. Guillaume Gaulier & Françoise Lemoine & Deniz Ünal-Kesenci, 2005. "China’s Integration in East Asia: Production Sharing, FDI & High-Tech Trade," Working Papers 2005-09, CEPII research center.
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