What Accounts for the Rising Sophistication of China's Exports?

40 Pages Posted: 8 Feb 2008 Last revised: 19 Aug 2022

See all articles by Zhi Wang

Zhi Wang

U.S. International Trade Commission

Shang-Jin Wei

Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Date Written: February 2008

Abstract

Chinese exports have become increasingly sophisticated. This has generated anxiety in developed countries as competitive pressure may increasingly be felt outside labor-intensive industries. Using product-level data on exports from different cities within China, this paper investigates the contributing factors to China's rising export sophistication. Somewhat surprisingly, neither processing trade nor foreign invested firms are found to play an important role in generating the increased overlap between China's export structure and that of 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 to the country's 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 Chinese exports within a given product category.

Suggested Citation

Wang, Zhi and Wei, Shang-Jin, What Accounts for the Rising Sophistication of China's Exports? (February 2008). NBER Working Paper No. w13771, Available at SSRN: https://ssrn.com/abstract=1091406

Zhi Wang (Contact Author)

U.S. International Trade Commission ( email )

500 E Street, SW
Washington, DC 20436
United States

Shang-Jin Wei

Columbia University - Columbia Business School, Finance ( email )

3022 Broadway
New York, NY 10027
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Centre for Economic Policy Research (CEPR)

London
United Kingdom