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Export Destination and Export Market Penetration of the People's Republic of China—Past and Future

Author

Listed:
  • Rui Mao

    (Assistant Professor, School of Management and CARD, Zhejiang University)

  • Bin Zhang

    (Senior Fellow, Institute of World Economics and Politics, Chinese Academy of Social Sciences)

Abstract

Growth in the aggregate market penetration rate (MPR) of the People's Republic of China (PRC) slowed during the period 2002–2014. Closer examination of the destinations and product levels reveals a simultaneous weakening in various markets. Production and trade costs were found to be the main determinants of these changes, while productivity growth and real exchange rate appreciation had either insignificant or limited effects. Predicting trends until 2016, we expect the MPR in almost all destinations and product markets to increase in the optimistic case. However, in a more realistic case, the MPR will likely plateau or fall in most markets. To stabilize exports, the PRC must actively facilitate structural transition in destinations and products. Meanwhile, macro policies to boost domestic demand are also urgently needed to maintain the country's high economic growth.

Suggested Citation

  • Rui Mao & Bin Zhang, 2015. "Export Destination and Export Market Penetration of the People's Republic of China—Past and Future," Asian Development Review, MIT Press, vol. 32(1), pages 142-166, March.
    • Handle: RePEc:tpr:adbadr:v:31:y:2015:i:2:p:142-166
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    References listed on IDEAS

    as
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    JEL classification:

    • F1 - International Economics - - Trade
    • F15 - International Economics - - Trade - - - Economic Integration

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