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Developmental Aspects of China¡¯s Trade Pattern: The Role of Imported Intermediate Goods

Author

Listed:
  • John Berdell

    (Department of Economics, College of Commerce, DePaul University, Chicago, IL 60604, USA)

  • Qi Hong Dong

    (Department of Economics, College of Commerce, DePaul University, Chicago, IL 60604, USA)

Abstract

This paper studies the relationship between China¡¯s trade and its economic development. More than two centuries ago Adam Smith argued that it is the use of imported intermediate goods that constitutes the vector through which openness improves productivity. Imported intermediate goods can relieve what would otherwise be key constraints allowing faster growth, together with better human development. While China¡¯s trade reform is often related to its productivity growth, there has been remarkably little attention to the relationship between imports and productivity growth at the industry-sectoral level. Our paper examines the sector-specific impact of intermediate goods utilizing a time series for the share of imported intermediate goods in each sector derived from our model calculations. Our study indicates that imported intermediate goods are playing an important role in the growth of Chinese productivity.

Suggested Citation

  • John Berdell & Qi Hong Dong, 2011. "Developmental Aspects of China¡¯s Trade Pattern: The Role of Imported Intermediate Goods," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 6(4), pages 556-567, December.
    • Handle: RePEc:fec:journl:v:6:y:2011:i:4:p:556-567
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-011-0147-z
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    Citations

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    Cited by:

    1. Athukorala, Prema-chandra & Yamashita, Nobuaki, 2006. "Production fragmentation and trade integration: East Asia in a global context," The North American Journal of Economics and Finance, Elsevier, vol. 17(3), pages 233-256, December.

    More about this item

    Keywords

    intermediate goods; vertical specialization; total productivity growth; international linkages to development;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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