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The Chinese Export Bundles - Patterns, Puzzles and Possible Explanations

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  • Zhi Wang

    (Indian Council for Research on International Economic Relations)

  • Shang-Jin Wei

Abstract

Chinas exports have become increasingly sophisticated. This has generated anxiety in developed countries as the competitive pressure may be increasingly felt outside labor-intensive industries. Using product-level data on exports from different cities within China, this paper investigates the contributing factors to the rising export sophistication. Somewhat surprisingly, neither processing trade nor foreign invested firms are found to play an important role in generating the increased overlap in the export structure between China and high-income countries. Instead, improvement in human capital and government policies in the form of tax-favored high-tech zones appear to be the key in the countrys evolving export structure. On the other hand, processing trade, foreign invested firms, and government-sponsored high-tech zones all have contributed significantly to raising the unit values of Chinas exports within a given product category.

Suggested Citation

  • Zhi Wang & Shang-Jin Wei, 2008. "The Chinese Export Bundles - Patterns, Puzzles and Possible Explanations," Macroeconomics Working Papers 22275, East Asian Bureau of Economic Research.
    • Handle: RePEc:eab:macroe:22275
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    References listed on IDEAS

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    1. Lionel Fontagné & Guillaume Gaulier & Soledad Zignago, 2007. "Specialisation across Varieties within Products and North-South Competition," Working Papers 2007-06, CEPII research center.
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    More about this item

    Keywords

    China; India; Export sophistication; Export structure; high-tech zones; Human Capital;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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