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China's International Competitiveness: Reassessing the Evidence

Author

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  • Ari Van Assche
  • Chang Hong
  • Veerle Slootmaekers

Abstract

In this paper we argue that export data are an inadequate tool to measure a country's international competitiveness when external trade is dominated by export-processing trade. Export data do not necessarily reflect the value produced in an exporting country, but rather capture the gross value of the products that leave a country's ports. We demonstrate that, in the case of China, this leads to an upward bias in both the perceived quantitative and qualitative threats to the Western economies.

Suggested Citation

  • Ari Van Assche & Chang Hong & Veerle Slootmaekers, 2008. "China's International Competitiveness: Reassessing the Evidence," LICOS Discussion Papers 20508, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  • Handle: RePEc:lic:licosd:20508
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    File URL: http://www.econ.kuleuven.be/licos/publications/dp/dp205.pdf
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    References listed on IDEAS

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    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. Ari Van Assche & Byron Gangnes, 2010. "Electronics production upgrading: is China exceptional?," Applied Economics Letters, Taylor & Francis Journals, vol. 17(5), pages 477-482.
    3. Byron Gangnes & Ari Van Assche, 2008. "China and the Future of Asian Electronics Trade," CIRANO Working Papers 2008s-05, CIRANO.
    4. Lall, Sanjaya & Albaladejo, Manuel, 2004. "China's Competitive Performance: A Threat to East Asian Manufactured Exports?," World Development, Elsevier, vol. 32(9), pages 1441-1466, September.
    5. F. Gerard Adams & Byron Gangnes & Yochanan Shachmurove, 2006. "Why is China so Competitive? Measuring and Explaining China's Competitiveness," The World Economy, Wiley Blackwell, vol. 29(2), pages 95-122, February.
    6. Peter K. Schott, 2008. "The relative sophistication of Chinese exports," Economic Policy, CEPR;CES;MSH, vol. 23, pages 5-49, January.
    7. Barry Naughton, 2007. "The Chinese Economy: Transitions and Growth," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262640643, January.
    8. Abraham, Filip & Konings, Jozef & Slootmaekers, Veerle, 2007. "FDI Spillovers in the Chinese Manufacturing Sector: Evidence of firm heterogeneity," CEPR Discussion Papers 6573, C.E.P.R. Discussion Papers.
    9. Ph. Monfort & Hylke Vandenbussche & E. Forlani, 2008. "Chinese Competition and Skill-Upgrading in European Textiles: Firm-level Evidence," LICOS Discussion Papers 19808, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
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    Cited by:

    1. Ana Cardoso & António Portugal Duarte, 2015. "The Impact of the Chinese Exchange Policy on Foreign Trade with the European Union," GEMF Working Papers 2015-09, GEMF, Faculty of Economics, University of Coimbra.
    2. Ma, Alyson C. & Van Assche, Ari, 2010. "The role of trade costs in global production networks : evidence from China's processing trade regime," Policy Research Working Paper Series 5490, The World Bank.
    3. Ahmed, Khalid & Long, Wei, 2012. "An Analysis of Core Factors Contributing to U.S – China Trade Imbalance," MPRA Paper 44733, University Library of Munich, Germany.

    More about this item

    Keywords

    China; export-processing trade; technological intensity; trade balance;

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