The Impact of China on the Exports of Other Asian Countries

36 Pages Posted: 30 Sep 2004

See all articles by Barry Eichengreen

Barry Eichengreen

University of California, Berkeley; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Yeongseop Rhee

Chungbuk National University - Economics Department; Sookmyung Women's University

Hui Tong

International Monetary Fund (IMF)

Date Written: September 2004

Abstract

We analyze the impact of China's growth on the exports of other Asian countries. Our innovation is to distinguish the increase in China's demand for imports from its increased penetration of export markets. Using the gravity model, we disaggregate among commodity types and account for the endogeneity of Chinese exports. We confirm the tendency for China's exports to crowd out the exports of other Asian countries. But this effect is felt mainly in markets for consumer goods and hence by less-developed Asian countries, not in markets for capital goods or by the more advanced Asian economies for which machinery and equipment are a significant fraction of exports. At the same time, there has been a strong tendency for a rapidly growing China to suck in imports from its Asian neighbors. But this effect is mainly felt in markets for capital goods, where China's income elasticity of import demand is highest, and thus by the more advanced Asian economies. Hence, more and less developed Asian countries are being affected very differently by China's rise.

Suggested Citation

Eichengreen, Barry and Rhee, Yeongseop and Tong, Hui, The Impact of China on the Exports of Other Asian Countries (September 2004). NBER Working Paper No. w10768. Available at SSRN: https://ssrn.com/abstract=592147

Barry Eichengreen (Contact Author)

University of California, Berkeley ( email )

310 Barrows Hall
Berkeley, CA 94720
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

Yeongseop Rhee

Chungbuk National University - Economics Department ( email )

Chungbuk 361-763, Cheongju
Korea, Republic of (South Korea)

Sookmyung Women's University ( email )

53-12, Chungpa-dong Yongsan-gu
Seoul
Korea, Republic of (South Korea)

Hui Tong

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

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