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How Much Do Exports Contribute To China'S Income Growth?

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  • Jiansuo Pei
  • Jan Oosterhaven
  • Erik Dietzenbacher

Abstract

It is a widespread belief that exports, in particular of ‘high-tech’ products, contribute much to China's income growth. This study addresses this issue by applying a structural decomposition analysis to input--output (I--O) data. We employ two extended I--O tables that distinguish processing trade from ordinary exports. The contribution of exports to the value-added growth from 2002 to 2007 is found to be overestimated by 32% when standard I--O tables are used rather than the extended I--O tables. Even more strikingly, the value-added growth that may be attributed to the exports of ‘high-tech’ telecommunication products is overestimated by no less than 63%. A serious overestimation of the contribution to income growth of certain products (such as high-tech products) sends out misleading signals to policymakers. When measured correctly, the true contribution appears to be substantially smaller than is generally believed to be.

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File URL: http://hdl.handle.net/10.1080/09535314.2012.660746
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Economic Systems Research.

Volume (Year): 24 (2012)
Issue (Month): 3 (January)
Pages: 275-297

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Handle: RePEc:taf:ecsysr:v:24:y:2012:i:3:p:275-297

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