NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

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

Zhi Wang, Shang-Jin Wei

NBER Working Paper No. 13771
Issued in February 2008
NBER Program(s):   ITI

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.

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Document Object Identifier (DOI): 10.3386/w13771

Published: What Accounts for the Rising Sophistication of China's Exports?, Zhi Wang, Shang-Jin Wei. in China's Growing Role in World Trade, Feenstra and Wei. 2010

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