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International Trade And Its Effects On Economic Performance In China

Author

Listed:
  • ALMAS HESHMATI

    (Department of Food and Resource Economics, College of Life Sciences and Biotechnology East Building, Room 217, Korea University, Anam-dong Seongbuk-gu, Seoul, 136-713, Korea)

  • SUN PENG

    (LiaoNing Entry-Exit Inspection and Quarantine, Bureau of P.R. China, No. 81 RenMin Rode Dalian City, LiaoNing Province 116001, China)

Abstract

This research discusses the role of international trade in China's economic growth. It starts with a review of conceptions as well as the evolution of China's international trade regime and the policy that China has taken in favor of its trade sectors. China's international trade performance is analyzed extensively and its effects on efficiency in production evaluated. A stochastic frontier production function is applied, based on a balanced panel data of 31 provinces observed from 2002 to 2007. The production function model is estimated and province-specific determinants of inefficiency in trade are identified. The study demonstrates that increasing participation in global trade helps China reap static and dynamic benefits, stimulating rapid national economic growth. Both international trade volume and trade structure toward high-tech exports result in positive effects on regional productivity. Provinces differ by economic growth and participation in international trade. Policy implications are drawn from the empirical results accordingly.

Suggested Citation

  • Almas Heshmati & Sun Peng, 2012. "International Trade And Its Effects On Economic Performance In China," China Economic Policy Review (CEPR), World Scientific Publishing Co. Pte. Ltd., vol. 1(02), pages 1-26.
    • Handle: RePEc:wsi:ceprxx:v:01:y:2012:i:02:n:s1793969012500094
    DOI: 10.1142/S1793969012500094
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