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Trade Expansion of China and India: Threat or Opportunity?

  • Mahvash Saeed Qureshi
  • Guanghua Wan

By exploring the export performances and specialisation patterns of China and India, we assess their trade competitiveness and complementarity vis-à-vis each other as well as with the rest of the world. Our analysis indicates that (a) India faces tough competition from China in the third markets especially in clothing, textiles and leather products; (b) there is a moderate potential for expanding trade between the two countries; (c) China poses a challenge for the East Asian economies, the US, and most European countries especially in medium-technology industries; (d) India appears to be a competitor mainly for its neighbouring South Asian countries; (e) complementarity exists between the imports of China and India, and the exports of the US, some European states and East Asian countries, especially Japan, Korea, Malaysia, Singapore and Thailand, implying opportunities for trade expansion; and finally (f) the export structure of China is changing with the exports of skill-intensive and high-technology products increasing and those of labour-intensive products decreasing gradually. This suggests that challenges created by China in traditional labour-intensive products might reduce in the long run. Copyright 2008 United Nations University. Journal compilation 2008 Blackwell Publishing Ltd.

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Article provided by Wiley Blackwell in its journal World Economy.

Volume (Year): 31 (2008)
Issue (Month): 10 (October)
Pages: 1327-1350

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Handle: RePEc:bla:worlde:v:31:y:2008:i:10:p:1327-1350
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  1. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  2. Shafaeddin, S. M., 2004. "Is China's accession to WTO threatening exports of developing countries?," China Economic Review, Elsevier, vol. 15(2), pages 109-144, January.
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  6. Jorge Blázquez-Lidoy & Javier Rodríguez & Javier Santiso, 2006. "Angel or Devil? China's Trade Impact on Latin American Emerging Markets," OECD Development Centre Working Papers 252, OECD Publishing.
  7. Barry Eichengreen & Yeongseop Rhee & Hui Tong, 2004. "The Impact of China on the Exports of Other Asian Countries," NBER Working Papers 10768, National Bureau of Economic Research, Inc.
  8. Sanjaya Lall & John Weiss & Hiroshi Oikawa, 2005. "China's Competitive Threat to Latin America: An Analysis for 1990-2002," Oxford Development Studies, Taylor & Francis Journals, vol. 33(2), pages 163-194.
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