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Trade policy and industrial policy in China: What motivates public authorities to apply restrictions on exports?

Listed author(s):
  • Julien Gourdon

    (CEPII - Centre d'études prospectives et d'informations internationales - CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

  • Stéphanie Monjon

    (LEDa - Laboratoire d'Economie de Dauphine - Université Paris-Dauphine)

  • Sandra Poncet

    (CEPII - Centre d'études prospectives et d'informations internationales - CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique)

This work investigates the motivations behind the Chinese fiscal policy on exports. It relies on very detailed product level (HS 6 digit) data over the period 2002-12 covering both export tax and export VAT rebate. It aims to uncover the respective importance of the various policy motivations and how they evolved over time. Our empirical analysis relates the tax rates to proxies of official objectives pursued by the Chinese public authorities such as those related to the promotion of technology or protection of the environment but also other unstated motives pertaining to subsidization of downstream sectors and terms of trade. Our results suggest that the Chinese fiscal policy targeting exports followsa variety of objectives whose relative importance changed over the period 2002-2012.

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Paper provided by HAL in its series Working Papers with number hal-01496419.

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Date of creation: 13 Apr 2017
Handle: RePEc:hal:wpaper:hal-01496419
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-01496419
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  1. Lohmar, Bryan & Gale, H. Frederick, Jr., 2008. "Who Will China Feed?," Amber Waves, United States Department of Agriculture, Economic Research Service, June.
  2. Arnaud Costinot & Dave Donaldson & Jonathan Vogel & Iván Werning, 2015. "Comparative Advantage and Optimal Trade Policy," The Quarterly Journal of Economics, Oxford University Press, vol. 130(2), pages 659-702.
  3. Simon J. Evenett & Johannes Fritz & Yang Chun Jing, 2012. "Beyond dollar exchange-rate targeting: China’s crisis-era export management regime," Oxford Review of Economic Policy, Oxford University Press, vol. 28(2), pages 284-300, SUMMER.
  4. Martin S. Feldstein & Paul R. Krugman, 1990. "International Trade Effects of Value-Added Taxation," NBER Chapters,in: Taxation in the Global Economy, pages 263-282 National Bureau of Economic Research, Inc.
  5. Ferrantino, Michael J. & Liu, Xuepeng & Wang, Zhi, 2012. "Evasion behaviors of exporters and importers: Evidence from the U.S.–China trade data discrepancy," Journal of International Economics, Elsevier, vol. 86(1), pages 141-157.
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  7. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
  8. Sandra PONCET & Julien GOURDON & Laura HERING & Stéphanie MONJON, 2014. "Export management and incomplete VAT rebates to exporters: the case of China," Working Papers P117, FERDI.
  9. Olga Solleder, 2013. "Trade Effects of Export Taxes," IHEID Working Papers 08-2013, Economics Section, The Graduate Institute of International Studies.
  10. Emran, M. Shahe, 2005. "Revenue-increasing and welfare-enhancing reform of taxes on exports," Journal of Development Economics, Elsevier, vol. 77(1), pages 277-292, June.
  11. Li, Ji Feng & Wang, Xin & Zhang, Ya Xiong, 2012. "Is it in China's interest to implement an export carbon tax?," Energy Economics, Elsevier, vol. 34(6), pages 2072-2080.
  12. Julien Gourdon & Stéphanie Monjon & Sandra Poncet, 2014. "Incomplete VAT rebates to exporters : how do they affect China's export performance?," Working Papers 2014-05, CEPII research center.
  13. Avraham Ebenstein, 2012. "The Consequences of Industrialization: Evidence from Water Pollution and Digestive Cancers in China," The Review of Economics and Statistics, MIT Press, vol. 94(1), pages 186-201, February.
  14. Margaret McMillan, 2001. "Why Kill The Golden Goose? A Political-Economy Model Of Export Taxation," The Review of Economics and Statistics, MIT Press, vol. 83(1), pages 170-184, February.
  15. Jeffrey M. Wooldridge, 2003. "Cluster-Sample Methods in Applied Econometrics," American Economic Review, American Economic Association, vol. 93(2), pages 133-138, May.
  16. Ryan Scholefield & James Gaisford, 2007. "Export Taxes: How They Work and Why They Are Used," Chapters,in: Handbook on International Trade Policy, chapter 21 Edward Elgar Publishing.
  17. Chandra, Piyush & Long, Cheryl, 2013. "VAT rebates and export performance in China: Firm-level evidence," Journal of Public Economics, Elsevier, vol. 102(C), pages 13-22.
  18. Upward, Richard & Wang, Zheng & Zheng, Jinghai, 2013. "Weighing China’s export basket: The domestic content and technology intensity of Chinese exports," Journal of Comparative Economics, Elsevier, vol. 41(2), pages 527-543.
  19. repec:dau:papers:123456789/13784 is not listed on IDEAS
  20. Hering, Laura & Poncet, Sandra, 2014. "Environmental policy and exports: Evidence from Chinese cities," Journal of Environmental Economics and Management, Elsevier, vol. 68(2), pages 296-318.
  21. Devarajan, Shantayanan & Go, Delfin & Schiff, Maurice & Suthiwart-Narueput, Sethaput, 1996. "The whys and why nots of export taxation," Policy Research Working Paper Series 1684, The World Bank.
  22. Jarreau, Joachim & Poncet, Sandra, 2012. "Export sophistication and economic growth: Evidence from China," Journal of Development Economics, Elsevier, vol. 97(2), pages 281-292.
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  24. Jeonghoi Kim, 2010. "Recent Trends in Export Restrictions," OECD Trade Policy Papers 101, OECD Publishing.
  25. Piermartini, Roberta, 2004. "The role of export taxes in the field of primary commodities," WTO Discussion Papers 4, World Trade Organization (WTO), Economic Research and Statistics Division.
  26. Chen, Chien-Hsun & Mai, Chao-Cheng & Yu, Hui-Chuan, 2006. "The effect of export tax rebates on export performance: Theory and evidence from China," China Economic Review, Elsevier, vol. 17(2), pages 226-235.
  27. Thomas Hatzichronoglou, 1997. "Revision of the High-Technology Sector and Product Classification," OECD Science, Technology and Industry Working Papers 1997/2, OECD Publishing.
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