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Are China's Exports Crowding Out or Being Crowded Out? Evidence from Japan's Imports

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  • Yan Liu
  • Xunpeng Shi
  • James Laurenceson

Abstract

Previous studies have investigated whether Chinese exports have crowded out those from other countries. However, what has yet to be considered is the evidence based on different quality varieties. Using the most detailed Harmonized System 9‐digit product‐level data, the present paper provides evidence of crowding‐out and crowded‐out effects across different product quality segments and across manufacturing sectors by quality segments. The empirical evidence presented in this paper shows that the crowding‐out effects of Chinese exports have been greatest at the lower end of the quality spectrum but less significant at the higher quality spectrum. Moreover, since 2007, China's own exports of lower quality manufactured goods have been increasingly crowded out. The key policy implication is that China's export path is in line with that taken by other Asian economies in previous decades; the crowded‐out effect could achieve win–win outcomes for countries involved; and lower income countries would do well to be open to receive those relocated low value‐added industries from China. However, the relocation policy in China is best implemented gradually as climbing up the product quality ladder takes time.

Suggested Citation

  • Yan Liu & Xunpeng Shi & James Laurenceson, 2018. "Are China's Exports Crowding Out or Being Crowded Out? Evidence from Japan's Imports," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 26(4), pages 1-23, July.
  • Handle: RePEc:bla:chinae:v:26:y:2018:i:4:p:1-23
    DOI: 10.1111/cwe.12246
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    2. Liu, Yan & Shi, Xunpeng & Laurenceson, James, 2020. "Dynamics of Australia's LNG export performance: A modified constant market shares analysis," Energy Economics, Elsevier, vol. 89(C).
    3. Xuefeng Qian & Kalsoom Rafique & Yingna Wu, 2020. "Flying with the Dragon: Estimating Developing Countries’ Gains from China's Imports," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 28(5), pages 1-25, September.
    4. Cunha, André Moreira & Lélis, Marcos Tadeu Caputi & Haines, Andrés Ernesto Ferrari & Franke, Luciane, 2023. "Exports of manufactured goods and structural change: Brazil in the face of Chinese competition," Structural Change and Economic Dynamics, Elsevier, vol. 64(C), pages 1-12.
    5. Cheng, Dong & Shi, Xunpeng & Yu, Jian & Zhang, Dayong, 2019. "How does the Chinese economy react to uncertainty in international crude oil prices?," International Review of Economics & Finance, Elsevier, vol. 64(C), pages 147-164.
    6. Zhou, Xiaoyong & Zhou, Dequn & Wang, Qunwei & Su, Bin, 2019. "How information and communication technology drives carbon emissions: A sector-level analysis for China," Energy Economics, Elsevier, vol. 81(C), pages 380-392.
    7. Debin Fang & Peng Hao & Zhengxin Wang & Jian Hao, 2019. "Analysis of the Influence Mechanism of CO 2 Emissions and Verification of the Environmental Kuznets Curve in China," IJERPH, MDPI, vol. 16(6), pages 1-17, March.

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