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The Chinese Export Bundles - Patterns, Puzzles and Possible Explanations

Author

Listed:
  • Zhi Wang

    (Indian Council for Research on International Economic Relations)

  • Shang-Jin Wei

Abstract

Chinas exports have become increasingly sophisticated. This has generated anxiety in developed countries as the competitive pressure may be increasingly felt outside labor-intensive industries. Using product-level data on exports from different cities within China, this paper investigates the contributing factors to the rising export sophistication. Somewhat surprisingly, neither processing trade nor foreign invested firms are found to play an important role in generating the increased overlap in the export structure between China and high-income countries. Instead, improvement in human capital and government policies in the form of tax-favored high-tech zones appear to be the key in the countrys evolving export structure. On the other hand, processing trade, foreign invested firms, and government-sponsored high-tech zones all have contributed significantly to raising the unit values of Chinas exports within a given product category.

Suggested Citation

  • Zhi Wang & Shang-Jin Wei, 2008. "The Chinese Export Bundles - Patterns, Puzzles and Possible Explanations," Macroeconomics Working Papers 22275, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:macroe:22275
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    File URL: http://www.eaber.org/node/22275
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    References listed on IDEAS

    as
    1. Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2008. "Specialization across varieties and North-South competition," Economic Policy, CEPR;CES;MSH, vol. 23, pages 51-91, January.
    2. Dani Rodrik, 2006. "What's So Special about China's Exports?," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 14(5), pages 1-19.
    3. Peter K. Schott, 2008. "The relative sophistication of Chinese exports," Economic Policy, CEPR;CES;MSH, vol. 23, pages 5-49, January.
    4. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    5. Zhi Wang & Shang-Jin Wei, 2010. "What Accounts for the Rising Sophistication of China's Exports?," NBER Chapters,in: China's Growing Role in World Trade, pages 63-104 National Bureau of Economic Research, Inc.
    6. Peter K. Schott, 2004. "Across-Product Versus Within-Product Specialization in International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 119(2), pages 647-678.
    7. Galina Hale & Cheryl Long, 2006. "What Determines Technological Spillovers of Foreign Direct Investment: Evidence from China," Working Papers 934, Economic Growth Center, Yale University.
    8. Robert Koopman & Zhi Wang & Shang-Jin Wei, 2008. "How Much of Chinese Exports is Really Made In China? Assessing Domestic Value-Added When Processing Trade is Pervasive," NBER Working Papers 14109, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    China; India; Export sophistication; Export structure; high-tech zones; Human Capital;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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