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China trade: Busting gravity's bounds

Listed author(s):
  • Edmonds, Christopher
  • La Croix, Sumner
  • Li, Yao

Since China's accession to the World Trade Organization in 2001, annual growth rates of its imports and exports have increased, and raised tensions between China and some of its major trading partners. Using a gravity model of trade, we find that China's orientation toward foreign trade is much greater than expected for an economy of its size and level of development. Our analysis shows that China's excessive orientation toward foreign trade ("over-trading") varies substantially across countries and we consider various explanations for the over-trading. A comparison of China's export boom with the earlier export booms of more market-based East and Southeast Asian economies shows that China's export boom has exceeded earlier booms in magnitude but not in duration. We conclude with a discussion of the likely scale of future export and import flows from and to China.

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File URL: http://www.sciencedirect.com/science/article/pii/S1049-0078(08)00093-6
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Article provided by Elsevier in its journal Journal of Asian Economics.

Volume (Year): 19 (2008)
Issue (Month): 5-6 ()
Pages: 455-466

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Handle: RePEc:eee:asieco:v:19:y:2008:i:5-6:p:455-466
Contact details of provider: Web page: http://www.elsevier.com/locate/asieco

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  1. Baldwin, Richard & Taglioni, Daria, 2006. "Gravity for Dummies and Dummies for Gravity Equations," CEPR Discussion Papers 5850, C.E.P.R. Discussion Papers.
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