Charting China’s Export Trajectories: Energy Factors and the Evolution of Competitive Advantage in Relation to the U.S.

Abstract

Accompanied with energy price fluctuating frequently, energy-saving technology updating rapidly, energy factor plays an important role in China’s export trade to US via energy relative price and energy consumption technology differentiation. According to industry energy consumption density, the paper classifies industries into high and low energy consumption industry, combining Costinot et al. productivity method with forward linkages increase export value added, calculates Chinese high and low energy consumption industries export comparative advantage index to US during 2000-2014, as well as using Kernel density method to evaluate the transition of them, finds that comparative advantage of China’s high/low energy consumption industry to U.S. has a trend of weaken/strength which shows extreme phenomena. furtherly, utilizing Probit method to estimate the factors which affects the comparative advantage, the results turn out that the gap of energy consumption technology between two countries is the main reason which contributes to China’s comparative advantage of both high and low energy consumption industry to U.S. The energy relative price just has significant impact on high energy consumption industry, which will affect the achievement of China’s carbon emission reduction targets in ‘Responding to Climate Change: China’s Policies and Actions’.