Can Demand from China Shield East Asian Economies from Global Slowdown?
This paper quantifies how much of exports from eight East Asian economies were consumed by consumers in China, US, Japan, other developed economies, and the rest of the world. We control for the indirect exports through China, i.e., the parts and components that East Asian economies exported to China and subsequently re-exported to other countries. A unique firm-level database is utilised to get an accurate measure for such indirect exports. The main findings are: (i) US consumers still account for more exports from East Asian economies than Chinese consumers do, and the total gross exports from East Asian economies to China overstate the importance of final demand from China; and (ii) the share of exports from East Asia that were consumed by the US, Japan, other OECD countries, and China did not change drastically from 2000 to 2006. Chinese consumers did become more important, noticeably for Japan and Korea, but even in these two countries, the magnitude of change is only about 5-6 percentage of their total exports. These findings indicate that the final demand side of trade in East Asia has changed only moderately since 2002.
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