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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.

Suggested Citation

  • Jiansuo Pei & Jan Oosterhaven & Erik Dietzenbacher, 2012. "How Much Do Exports Contribute To China'S Income Growth?," Economic Systems Research, Taylor & Francis Journals, vol. 24(3), pages 275-297, January.
  • Handle: RePEc:taf:ecsysr:v:24:y:2012:i:3:p:275-297 DOI: 10.1080/09535314.2012.660746
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    References listed on IDEAS

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    1. Love, Inessa & Preve, Lorenzo A. & Sarria-Allende, Virginia, 2007. "Trade credit and bank credit: Evidence from recent financial crises," Journal of Financial Economics, Elsevier, pages 453-469.
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    Cited by:

    1. Los, Bart & Timmer, Marcel P. & de Vries, Gaaitzen J., 2015. "How important are exports for job growth in China? A demand side analysis," Journal of Comparative Economics, Elsevier, pages 19-32.
    2. Rohman, Ibrahim Kholilul & Bohlin, Erik, 2014. "Decomposition analysis of the telecommunications sector in Indonesia: What does the cellular era shed light on?," Telecommunications Policy, Elsevier, pages 248-263.
    3. repec:dgr:rugggd:gd-128 is not listed on IDEAS
    4. Zhao, Hongyan & Zhang, Qiang & Huo, Hong & Lin, Jintai & Liu, Zhu & Wang, Haikun & Guan, Dabo & He, Kebin, 2016. "Environment-economy tradeoff for Beijing–Tianjin–Hebei’s exports," Applied Energy, Elsevier, pages 926-935.
    5. Koppány, Krisztián, 2017. "A növekedés lehetőségei és kockázatai. Magyarország feldolgozóipari exportteljesítményének és ágazati szerkezetének vizsgálata, 2010-2014
      [Growth opportunities and risks in Hungary's industrial mix
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(1), pages 17-53.

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