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Product Sophistication and the Slowdown in Chinese Export Growth

Author

Listed:
  • Mark Kruger
  • Walter Steingress
  • Sri Thanabalasingam

Abstract

Chinese real export growth decelerated considerably during the last decade. This paper argues that the slowdown largely resulted from China moving to a more sophisticated mix of exports: China produced more sophisticated goods over which it had pricing power instead of producing greater volumes of less sophisticated products. Indeed, we show that the share of highly sophisticated products in Chinese exports increased steadily over time and that Chinese exports became less price sensitive, suggesting increased pricing power. Further, a decomposition of China’s market share gains shows that China continues to gain market share despite exporting products with higher-than-average world prices. China’s continuous gain in global export market share suggests that its export machine is far from broken.

Suggested Citation

  • Mark Kruger & Walter Steingress & Sri Thanabalasingam, 2017. "Product Sophistication and the Slowdown in Chinese Export Growth," Discussion Papers 17-15, Bank of Canada.
  • Handle: RePEc:bca:bocadp:17-15
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    References listed on IDEAS

    as
    1. Dennis Novy, 2013. "Gravity Redux: Measuring International Trade Costs With Panel Data," Economic Inquiry, Western Economic Association International, vol. 51(1), pages 101-121, January.
    2. Michael Francis & François Painchaud & Sylvie Morin, 2005. "Understanding China's Long-Run Growth Process and Its Implications for Canada," Bank of Canada Review, Bank of Canada, vol. 2005(Spring), pages 5-17.
    3. Angela Cheptea & Guillaume Gaulier & Soledad Zignago, 2004. "The World Market: Market Shares and Export Performances," La Lettre du CEPII, CEPII research center, issue 231.
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    Cited by:

    1. Anne-Katherine Cormier & Michael Francis & Kristina Hess & Guillaume Poulin-Bellisle, 2019. "Drivers of Weak Wage Growth in Advanced Economies," Staff Analytical Notes 2019-3, Bank of Canada.
    2. Guschanski, Alexander & Onaran, Özlem, 2021. "The effect of global value chain participation on the labour share – Industry level evidence from emerging economies," Greenwich Papers in Political Economy 31973, University of Greenwich, Greenwich Political Economy Research Centre.

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    More about this item

    Keywords

    Development economics; Exchange rates; International topics;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General

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