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How Much Do Exports Contribute To China'S Income Growth?

Author

Listed:
  • 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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    Citations

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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, vol. 43(1), pages 19-32.
    2. Zhang, Zengkai & Duan, Yuwan & Zhang, Wei, 2019. "Economic gains and environmental costs from China's exports: Regional inequality and trade heterogeneity," Ecological Economics, Elsevier, vol. 164(C), pages 1-1.
    3. Yuwan Duan & Yanping Zhao & Jakob Haan, 2020. "Exchange Rate Pass-through in China: A Cost-Push Input-Output Price Model," Open Economies Review, Springer, vol. 31(3), pages 513-528, July.
    4. Yuwan Duan & Erik Dietzenbacher & Bart Los & Ruochen Dai, 2023. "Regional inequality in China during its rise as a giant exporter: A value chain analysis," Journal of Regional Science, Wiley Blackwell, vol. 63(1), pages 148-172, January.
    5. 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, vol. 38(3), pages 248-263.
    6. Hong, Jae Pyo & Byun, Jeong Eun & Kim, Pang Ryong, 2016. "Structural changes and growth factors of the ICT industry in Korea: 1995–2009," Telecommunications Policy, Elsevier, vol. 40(5), pages 502-513.
    7. repec:dgr:rugggd:gd-128 is not listed on IDEAS
    8. Hertwich, Edgar G., 2020. "Carbon fueling complex global value chains tripled in the period 1995–2012," Energy Economics, Elsevier, vol. 86(C).
    9. Feng, Tong & Du, Huibin & Zhang, Zengkai & Mi, Zhifu & Guan, Dabo & Zuo, Jian, 2020. "Carbon transfer within China: Insights from production fragmentation," Energy Economics, Elsevier, vol. 86(C).
    10. 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.
    11. Ling Li & Ling Tang & Junrong Zhang, 2019. "Coupling Structural Decomposition Analysis and Sensitivity Analysis to Investigate CO 2 Emission Intensity in China," Energies, MDPI, vol. 12(12), pages 1-23, June.
    12. Yan, Bingqian & Duan, Yuwan & Wang, Shouyang, 2020. "China’s emissions embodied in exports: How regional and trade heterogeneity matter," Energy Economics, Elsevier, vol. 87(C).
    13. Haoliang Zhu, 2019. "A quantitative analysis of global value chains: why has domestic value-added of China’s exports increased?," International Journal of Economic Policy Studies, Springer, vol. 13(2), pages 403-423, August.
    14. 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, vol. 184(C), pages 926-935.
    15. Duan, Yuwan & Dietzenbacher, Erik & Los, Bart & Yang, Cuihong, 2021. "How much did China's emergence as “the world's factory” contribute to its national income?," China Economic Review, Elsevier, vol. 69(C).
    16. Duan, Yuwan & Yan, Bingqian, 2021. "Has processing trade made China's exports cleaner? A regional level analysis," Energy Economics, Elsevier, vol. 96(C).

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