IDEAS home Printed from https://ideas.repec.org/p/eti/dpaper/16088.html
   My bibliography  Save this paper

China's Electronics Exports, the Renminbi, and Exchange Rates in Supply Chain Countries

Author

Listed:
  • THORBECKE, Willem

Abstract

China's trade surplus remains huge. Researchers have reported that China's exports decimate manufacturing job abroad and stoke protectionist pressures. China's surplus is concentrated in the electronics sector. Much of the value-added of China's exports of smartphones, tablet computers, and consumer electronics goods comes from processors, sensors, and other parts and components (p&c) produced in Taiwan, South Korea, Japan, and the Association of Southeast Asian Nations (ASEAN). This paper finds that exchange rates in countries supplying p&c are crucial for understanding China's electronics exports. A concerted appreciation of East Asian currencies is needed to rebalance the region's exports. However, because of underdeveloped financial markets, the U.S. dollar remains the most important currency in the currency baskets of many East Asian economies. Countries resist appreciation against the dollar to maintain competitiveness vis-Ã -vis neighboring economies. This paper considers ways to overcome this coordination failure and develop stronger consumption-oriented economies in the region.

Suggested Citation

  • THORBECKE, Willem, 2016. "China's Electronics Exports, the Renminbi, and Exchange Rates in Supply Chain Countries," Discussion papers 16088, Research Institute of Economy, Trade and Industry (RIETI).
    • Handle: RePEc:eti:dpaper:16088
    as

    Download full text from publisher

    File URL: https://www.rieti.go.jp/jp/publications/dp/16e088.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Cheung, Yin-Wong & Chinn, Menzie D. & Qian, XingWang, 2012. "Are Chinese trade flows different?," Journal of International Money and Finance, Elsevier, vol. 31(8), pages 2127-2146.
    2. Willem Thorbecke, 2016. "Exchange Rates and Production Networks in Asia: A Twenty-first Century Perspective," International Economic Journal, Taylor & Francis Journals, vol. 30(2), pages 217-230, June.
    3. David H. Autor & David Dorn & Gordon H. Hanson, 2013. "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review, American Economic Association, vol. 103(6), pages 2121-2168, October.
    4. Gunther Schnabl & Kristina Spantig, 2016. "(De)Stabilizing Exchange Rate Strategies In East Asian Monetary And Economic Integration," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 61(02), pages 1-24, June.
    5. Willem Thorbecke, 2011. "How Elastic is East Asian Demand for Consumption Goods?," Review of International Economics, Wiley Blackwell, vol. 19(5), pages 950-962, November.
    6. Yi Che & Yi Lu & Justin R. Pierce & Peter K. Schott & Zhigang Tao, 2016. "Does Trade Liberalization with China Influence U.S. Elections?," Finance and Economics Discussion Series 2016-039, Board of Governors of the Federal Reserve System (U.S.).
    7. Justin R. Pierce & Peter K. Schott, 2016. "The Surprisingly Swift Decline of US Manufacturing Employment," American Economic Review, American Economic Association, vol. 106(7), pages 1632-1662, July.
    8. Hayakawa, Kazunobu & Kimura, Fukunari, 2009. "The effect of exchange rate volatility on international trade in East Asia," Journal of the Japanese and International Economies, Elsevier, vol. 23(4), pages 395-406, December.
    9. Daron Acemoglu & David Autor & David Dorn & Gordon H. Hanson & Brendan Price, 2016. "Import Competition and the Great US Employment Sag of the 2000s," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 141-198.
    10. Kozo Kiyota & Shujiro Urata, 2004. "Exchange Rate, Exchange Rate Volatility and Foreign Direct Investment," The World Economy, Wiley Blackwell, vol. 27(10), pages 1501-1536, November.
    11. repec:zbw:bofitp:2012_014 is not listed on IDEAS
    12. William R. Cline, 2016. "Estimates of Fundamental Equilibrium Exchange Rates, May 2016," Policy Briefs PB16-6, Peterson Institute for International Economics.
    13. William R. Cline, 2016. "Estimates of Fundamental Equilibrium Exchange Rates, November 2016," Policy Briefs PB16-22, Peterson Institute for International Economics.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Thorbecke, Willem, 2018. "The exposure of U.S. manufacturing industries to exchange rates," International Review of Economics & Finance, Elsevier, vol. 58(C), pages 538-549.
    2. Sun, Churen & Liu, Xuemei & Xu, Jinqiang, 2023. "Does China’s market opening eased its trade partners’ domestic conflicts? – Evidence from China’s WTO accession," Journal of Asian Economics, Elsevier, vol. 89(C).
    3. Che, Yi & Lu, Yi & Pierce, Justin R. & Schott, Peter K. & Tao, Zhigang, 2022. "Did trade liberalization with China influence US elections?," Journal of International Economics, Elsevier, vol. 139(C).
    4. Colantone, Italo & Crinò, Rosario & Ogliari, Laura, 2019. "Globalization and mental distress," Journal of International Economics, Elsevier, vol. 119(C), pages 181-207.
    5. Andrés César & Guillermo Falcone, 2020. "Heterogeneous Effects of Chinese Import Competition on Chilean Manufacturing Plants," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Spring 20), pages 1-60, December.
    6. Gagliardi, Luisa & Moretti, Enrico & Serafinelli, Michel, 2023. "The World's Rust Belts: The Heterogeneous Effects of Deindustrialization on 1,993 Cities in Six Countries," IZA Discussion Papers 16648, Institute of Labor Economics (IZA).
    7. Fernández Guerrico, Sofía, 2021. "The effects of trade-induced worker displacement on health and mortality in Mexico," Journal of Health Economics, Elsevier, vol. 80(C).
    8. Christian Dippel & Robert Gold & Stephan Heblich & Rodrigo Pinto, 2017. "Instrumental Variables and Causal Mechanisms: Unpacking the Effect of Trade on Workers and Voters," CESifo Working Paper Series 6816, CESifo.
    9. Feenstra, Robert C. & Ma, Hong & Xu, Yuan, 2019. "US exports and employment," Journal of International Economics, Elsevier, vol. 120(C), pages 46-58.
    10. Sergei Guriev & Elias Papaioannou, 2022. "The Political Economy of Populism," Journal of Economic Literature, American Economic Association, vol. 60(3), pages 753-832, September.
    11. Erling Barth & Henning Finseraas & Anders Kjelsrud & Kalle Moene, 2023. "Hit by the Silk Road: how wage coordination in Europe mitigates the China shock," Scandinavian Journal of Economics, Wiley Blackwell, vol. 125(1), pages 32-72, January.
    12. Patrick Arni & Pether H. Egger & Katharina Erhardt & Matthias Gubler & Philip Sauré, 2024. "Heterogeneous Impacts of Trade Shocks on Workers," Working Papers 2409, Gutenberg School of Management and Economics, Johannes Gutenberg-Universität Mainz.
    13. Yuan Xu & Hong Ma & Robert Feenstra, 2023. "Magnification of the ‘China shock’ through the U.S. housing market," Review of International Economics, Wiley Blackwell, vol. 31(5), pages 1864-1893, November.
    14. Bianconi, Marcelo & Esposito, Federico & Sammon, Marco, 2021. "Trade policy uncertainty and stock returns," Journal of International Money and Finance, Elsevier, vol. 119(C).
    15. Lai, Tat-kei & Lu, Yi & Ng, Travis, 2022. "Import Competition and Workplace Safety in the U.S. Manufacturing Sector," Journal of Economic Behavior & Organization, Elsevier, vol. 203(C), pages 24-42.
    16. Goya, Daniel, 2021. "The network effect of Chinese competition on what domestic suppliers produce," Economic Modelling, Elsevier, vol. 102(C).
    17. Antonio Rodriguez-Lopez & Miaojie Yu, 2017. "All-Around Trade Liberalization and Firm-Level Employment: Theory and Evidence from China," CESifo Working Paper Series 6710, CESifo.
    18. Shen, Leilei & Silva, Peri, 2018. "Value-added exports and U.S. local labor markets: Does China really matter?," European Economic Review, Elsevier, vol. 101(C), pages 479-504.
    19. Philippe Aghion & Antonin Bergeaud & Matthieu Lequien & Marc J. Melitz & Thomas Zuber, 2024. "Opposing Firm-Level Responses to the China Shock: Output Competition versus Input Supply," American Economic Journal: Economic Policy, American Economic Association, vol. 16(2), pages 249-269, May.
    20. Rui Costa & Swati Dhingra & Stephen Machin, 2022. "New dawn fades: Trade, labour and the Brexit exchange rate depreciation," CEP Discussion Papers dp1890, Centre for Economic Performance, LSE.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eti:dpaper:16088. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: TANIMOTO, Toko (email available below). General contact details of provider: https://edirc.repec.org/data/rietijp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.