IDEAS home Printed from https://ideas.repec.org/a/bla/chinae/v26y2018i2p68-93.html
   My bibliography  Save this article

The Great Opening up and the Roadmap for the Future: The Story of China's International Trade

Author

Listed:
  • Yan Du
  • Yi Lu

Abstract

The astonishing surge in China's international trade is the result of comprehensive economic reforms in the 1980s and 1990s. Trade was further bolstered by China's accession to the World Trade Organization (WTO) in 2001. We examine several aspects of China's international trade that might help to explain its surprisingly fast growth and its ever†growing role in the global economy. A large number of studies have analyzed how trade liberalization, the WTO accession in particular, has profoundly changed the Chinese economy. We survey notable contributions to this literature that analyze the effects of trade liberalization on Chinese firms, individuals and households. Meanwhile, China's exports have had various effects on importing countries and the enormous growth of China's exports is seen by some observers as posing a threat to China's trading partners. Therefore, we discuss the emerging literature on the effects of China's spectacular export growth on consumers, labor markets, innovation, media and politics in foreign countries. Given the new domestic and external circumstances, the Chinese Government is determined to push for the formation of a new trade structure characterized by broad opening up to transform China into a strong trading powerhouse.

Suggested Citation

  • Yan Du & Yi Lu, 2018. "The Great Opening up and the Roadmap for the Future: The Story of China's International Trade," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(2), pages 68-93, March.
  • Handle: RePEc:bla:chinae:v:26:y:2018:i:2:p:68-93
    DOI: 10.1111/cwe.12237
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/cwe.12237
    Download Restriction: no

    File URL: https://libkey.io/10.1111/cwe.12237?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Nicholas Bloom & Mirko Draca & John Van Reenen, 2016. "Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(1), pages 87-117.
    2. Fan, Haichao & Li, Yao Amber & Yeaple, Stephen R., 2018. "On the relationship between quality and productivity: Evidence from China's accession to the WTO," Journal of International Economics, Elsevier, vol. 110(C), pages 28-49.
    3. Daron Acemoglu & David Autor & David Dorn & Gordon H. Hanson & Brendan Price, 2016. "Import Competition and the Great US Employment Sag of the 2000s," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 141-198.
    4. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2014. "Tracing Value-Added and Double Counting in Gross Exports," American Economic Review, American Economic Association, vol. 104(2), pages 459-494, February.
    5. Mary Amiti & Amit K. Khandelwal, 2013. "Import Competition and Quality Upgrading," The Review of Economics and Statistics, MIT Press, vol. 95(2), pages 476-490, May.
    6. Jan De Loecker & Frederic Warzynski, 2012. "Markups and Firm-Level Export Status," American Economic Review, American Economic Association, vol. 102(6), pages 2437-2471, October.
    7. Jan De Loecker & Pinelopi K. Goldberg & Amit K. Khandelwal & Nina Pavcnik, 2016. "Prices, Markups, and Trade Reform," Econometrica, Econometric Society, vol. 84, pages 445-510, March.
    8. Levinsohn, James, 1993. "Testing the imports-as-market-discipline hypothesis," Journal of International Economics, Elsevier, vol. 35(1-2), pages 1-22, August.
    9. Loren Brandt & Johannes Van Biesebroeck & Luhang Wang & Yifan Zhang, 2017. "WTO Accession and Performance of Chinese Manufacturing Firms," American Economic Review, American Economic Association, vol. 107(9), pages 2784-2820, September.
    10. Jean Imbs & Romain Wacziarg, 2003. "Stages of Diversification," American Economic Review, American Economic Association, vol. 93(1), pages 63-86, March.
    11. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    12. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    13. Chris Edmond & Virgiliu Midrigan & Daniel Yi Xu, 2015. "Competition, Markups, and the Gains from International Trade," American Economic Review, American Economic Association, vol. 105(10), pages 3183-3221, October.
    14. Haichao Fan & Yao Amber Li & Stephen R. Yeaple, 2015. "Trade Liberalization, Quality, and Export Prices," The Review of Economics and Statistics, MIT Press, vol. 97(5), pages 1033-1051, December.
    15. Hausmann, Ricardo & Rodrik, Dani, 2003. "Economic development as self-discovery," Journal of Development Economics, Elsevier, vol. 72(2), pages 603-633, December.
    16. Jonathan Eaton & Samuel Kortum & Brent Neiman & John Romalis, 2016. "Trade and the Global Recession," American Economic Review, American Economic Association, vol. 106(11), pages 3401-3438, November.
    17. Dani Rodrik, 2006. "What's So Special about China's Exports?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(5), pages 1-19, September.
    18. Kyle Handley & Nuno Limão, 2018. "Policy Uncertainty, Trade, and Welfare: Theory and Evidence for China and the United States," World Scientific Book Chapters, in: Policy Externalities and International Trade Agreements, chapter 5, pages 123-175, World Scientific Publishing Co. Pte. Ltd..
    19. Liu, Qing & Qiu, Larry D., 2016. "Intermediate input imports and innovations: Evidence from Chinese firms' patent filings," Journal of International Economics, Elsevier, vol. 103(C), pages 166-183.
    20. Holmes, Thomas J. & Hsu, Wen-Tai & Lee, Sanghoon, 2014. "Allocative efficiency, mark-ups, and the welfare gains from trade," Journal of International Economics, Elsevier, vol. 94(2), pages 195-206.
    21. Peter K. Schott, 2008. "The relative sophistication of Chinese exports [‘Manufacturing Earnings and Compensation in China’]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 23(53), pages 6-49.
    22. Costas Arkolakis & Arnaud Costinot & Andres Rodriguez-Clare, 2012. "New Trade Models, Same Old Gains?," American Economic Review, American Economic Association, vol. 102(1), pages 94-130, February.
    23. Haichao Fan & Yao Amber Li & Stephen R. Yeaple, 2015. "Trade Liberalization, Quality, and Export Prices," The Review of Economics and Statistics, MIT Press, vol. 97(5), pages 1033-1051, December.
    24. Brandt, Loren & Van Biesebroeck, Johannes & Zhang, Yifan, 2012. "Creative accounting or creative destruction? Firm-level productivity growth in Chinese manufacturing," Journal of Development Economics, Elsevier, vol. 97(2), pages 339-351.
    25. Bai, Xue & Krishna, Kala & Ma, Hong, 2017. "How you export matters: Export mode, learning and productivity in China," Journal of International Economics, Elsevier, vol. 104(C), pages 122-137.
    26. Han, Jun & Liu, Runjuan & Ural Marchand, Beyza & Zhang, Junsen, 2016. "Market structure, imperfect tariff pass-through, and household welfare in Urban China," Journal of International Economics, Elsevier, vol. 100(C), pages 220-232.
    27. Hummels, David & Ishii, Jun & Yi, Kei-Mu, 2001. "The nature and growth of vertical specialization in world trade," Journal of International Economics, Elsevier, vol. 54(1), pages 75-96, June.
    28. Amit K. Khandelwal & Peter K. Schott & Shang-Jin Wei, 2013. "Trade Liberalization and Embedded Institutional Reform: Evidence from Chinese Exporters," American Economic Review, American Economic Association, vol. 103(6), pages 2169-2195, October.
    29. Carlos D. Ramirez & Rong Rong, 2012. "China Bashing: Does Trade Drive the “Bad” News about China in the USA?," Review of International Economics, Wiley Blackwell, vol. 20(2), pages 350-363, May.
    30. Hiau Looi Kee & Heiwai Tang, 2016. "Domestic Value Added in Exports: Theory and Firm Evidence from China," American Economic Review, American Economic Association, vol. 106(6), pages 1402-1436, June.
    31. Feng, Ling & Li, Zhiyuan & Swenson, Deborah L., 2017. "Trade policy uncertainty and exports: Evidence from China's WTO accession," Journal of International Economics, Elsevier, vol. 106(C), pages 20-36.
    32. Justin R. Pierce & Peter K. Schott, 2016. "The Surprisingly Swift Decline of US Manufacturing Employment," American Economic Review, American Economic Association, vol. 106(7), pages 1632-1662, July.
    33. Upward, Richard & Wang, Zheng & Zheng, Jinghai, 2013. "Weighing China’s export basket: The domestic content and technology intensity of Chinese exports," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 527-543.
    34. Koopman, Robert & Wang, Zhi & Wei, Shang-Jin, 2012. "Estimating domestic content in exports when processing trade is pervasive," Journal of Development Economics, Elsevier, vol. 99(1), pages 178-189.
    35. McManus, T. Clay & Schaur, Georg, 2016. "The effects of import competition on worker health," Journal of International Economics, Elsevier, vol. 102(C), pages 160-172.
    36. Shunli Yao, 2009. "Why Are Chinese Exports Not So Special?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 17(1), pages 47-65, January.
    37. Yao, Yang, 2014. "The Chinese Growth Miracle," Handbook of Economic Growth, in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 2, chapter 7, pages 943-1031, Elsevier.
    38. Harrison, Ann E., 1994. "Productivity, imperfect competition and trade reform : Theory and evidence," Journal of International Economics, Elsevier, vol. 36(1-2), pages 53-73, February.
    39. Xu, Bin, 2010. "The sophistication of exports: Is China special?," China Economic Review, Elsevier, vol. 21(3), pages 482-493, September.
    40. Chen, Bo & Yu, Miaojie & Yu, Zhihao, 2017. "Measured skill premia and input trade liberalization: Evidence from Chinese firms," Journal of International Economics, Elsevier, vol. 109(C), pages 31-42.
    41. Han, Jun & Liu, Runjuan & Zhang, Junsen, 2012. "Globalization and wage inequality: Evidence from urban China," Journal of International Economics, Elsevier, vol. 87(2), pages 288-297.
    42. Xu, Bin, 2010. "Erratum to "The sophistication of exports: Is China special?" [China Economic Review 21 (3) (2010) 482-493]," China Economic Review, Elsevier, vol. 21(4), pages 671-672, December.
    43. Yi Lu Jr. & Linhui Yu Jr., 2015. "Trade Liberalization and Markup Dispersion: Evidence from China's WTO Accession," American Economic Journal: Applied Economics, American Economic Association, vol. 7(4), pages 221-253, October.
    44. Miaojie Yu, 2015. "Processing Trade, Tariff Reductions and Firm Productivity: Evidence from Chinese Firms," Economic Journal, Royal Economic Society, vol. 125(585), pages 943-988, June.
    45. Johnson, Robert C. & Noguera, Guillermo, 2012. "Accounting for intermediates: Production sharing and trade in value added," Journal of International Economics, Elsevier, vol. 86(2), pages 224-236.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yiming Zhang & Zuoliang Ye & Kaijun Gan, 2024. "Trade Liberalization and Pollutant Emissions: Micro Evidence from Chinese Manufacturing Firms," Sustainability, MDPI, vol. 16(16), pages 1-21, August.
    2. Yan Liu & Xunpeng Shi & James Laurenceson, 2018. "Are China's Exports Crowding Out or Being Crowded Out? Evidence from Japan's Imports," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(4), pages 1-23, July.
    3. Guanglan Zhou & Zhening Zhang & Yulian Fei, 2022. "How to Evaluate the Green and High-Quality Development Path? An FsQCA Approach on the China Pilot Free Trade Zone," IJERPH, MDPI, vol. 19(1), pages 1-17, January.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Copestake, Alexander & Zhang, Wenzhang, 2023. "Inputs, networks and quality-upgrading: Evidence from China in India," China Economic Review, Elsevier, vol. 77(C).
    2. Amiti, Mary & Dai, Mi & Feenstra, Robert C. & Romalis, John, 2020. "How did China's WTO entry affect U.S. prices?," Journal of International Economics, Elsevier, vol. 126(C).
    3. Fan, Haichao & Gao, Xiang & Li, Yao Amber & Luong, Tuan Anh, 2018. "Trade liberalization and markups: Micro evidence from China," Journal of Comparative Economics, Elsevier, vol. 46(1), pages 103-130.
    4. Fan, Haichao & Lin, Faqin & Lin, Shu, 2020. "The hidden cost of trade liberalization: Input tariff shocks and worker health in China," Journal of International Economics, Elsevier, vol. 126(C).
    5. Zhengwen Liu & Hong Ma, 2021. "Input Trade Liberalization And Markup Distribution: Evidence From China," Economic Inquiry, Western Economic Association International, vol. 59(1), pages 344-360, January.
    6. Li, Yifan & Miao, Zhuang, 2024. "The rise of superstar firms in the United States: The role of global sourcing," Journal of Comparative Economics, Elsevier, vol. 52(1), pages 113-144.
    7. Liu, Mengdi & Zhang, Bing & Liao, Xianchun, 2022. "Can trade liberalization promote green production? Evidence from China's manufacturing enterprises," Journal of Asian Economics, Elsevier, vol. 79(C).
    8. Berkowitz, Daniel & Nishioka, Shuichiro, 2024. "The growth of firms, markets and rents: Evidence from China," Journal of Comparative Economics, Elsevier, vol. 52(2), pages 383-399.
    9. Amiti, Mary & Dai, Mi & Feenstra, Robert & Romalis, John, 2017. "How Did China's WTO Entry Benefit U.S. Consumers?," CEPR Discussion Papers 12076, C.E.P.R. Discussion Papers.
    10. Bas, Maria & Paunov, Caroline, 2021. "Disentangling trade reform impacts on firm market and production decisions," European Economic Review, Elsevier, vol. 135(C).
    11. McManus, T. Clay & Schaur, Georg, 2016. "The effects of import competition on worker health," Journal of International Economics, Elsevier, vol. 102(C), pages 160-172.
    12. Fan, Haichao & Lai, Edwin L.-C. & (Steffan) Qi, Han, 2019. "Trade liberalization and Firms’ export performance in China: Theory and evidence," Journal of Comparative Economics, Elsevier, vol. 47(3), pages 640-668.
    13. Liu, Chen & Ma, Xiao, 2023. "Migration, tariffs, and China's export surge," Journal of International Economics, Elsevier, vol. 140(C).
    14. Shuai Chen & Faqin Lin & Xi Yao & Peng Zhang, 2020. "WTO accession, trade expansion, and air pollution: Evidence from China’s county‐level panel data," Review of International Economics, Wiley Blackwell, vol. 28(4), pages 1020-1045, September.
    15. Mary Amiti & Mi Dai & Robert C. Feenstra & John Romalis, 2017. "How did China’s WTO entry benefit U.S. prices?," Staff Reports 817, Federal Reserve Bank of New York.
    16. Fan, Haichao & Li, Yao Amber & Yeaple, Stephen R., 2018. "On the relationship between quality and productivity: Evidence from China's accession to the WTO," Journal of International Economics, Elsevier, vol. 110(C), pages 28-49.
    17. Lihua Dai & Qi Fan & Yanyun Li & Faqin Lin, 2021. "No time to look after the kids: The unintended consequences of export expansion on child health," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 29(3), pages 527-548, July.
    18. Jingbo Cui & On Kit Tam & Bei Wang & Yan Zhang, 2020. "The environmental effect of trade liberalization: Evidence from China's manufacturing firms," The World Economy, Wiley Blackwell, vol. 43(12), pages 3357-3383, December.
    19. Lin, Faqin & Long, Cheryl X., 2020. "The impact of globalization on youth education: Empirical evidence from China's WTO accession," Journal of Economic Behavior & Organization, Elsevier, vol. 178(C), pages 820-839.
    20. Pham, Hoang, 2023. "Trade reform, oligopsony, and labor market distortion: Theory and evidence," Journal of International Economics, Elsevier, vol. 144(C).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:chinae:v:26:y:2018:i:2:p:68-93. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/iwepacn.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.