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Measuring the Competitiveness of China's Processed Exports

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  • THORBECKE, Willem

Abstract

China's surplus in processing trade remains large. Processed exports are final goods produced using parts and components that are imported duty free. Since much of the value added of these exports comes from East Asia, exchange rates throughout the region should affect their foreign currency prices. This paper presents data on value-added exchange rates for processed exports over the 1993-2013 period and reports that they significantly affect exports. While the renminbi (RMB) appreciated by 36% between the beginning of 2005 and the end of 2013, exchange rates in supply chain countries have depreciated. This has mitigated the effect of the RMB appreciation on the price competitiveness of processed exports.

Suggested Citation

  • THORBECKE, Willem, 2014. "Measuring the Competitiveness of China's Processed Exports," Discussion papers 14049, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:14049
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    Cited by:

    1. Thorbecke, Willem, 2015. "China–US trade: A global outlier," Journal of Asian Economics, Elsevier, vol. 40(C), pages 47-58.

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