China Exports Research Articles

The impact of One Belt and One Road Initiative on the diversification of export products from countries along the Belt and Road to China

With the further deepening of the international division of labor and the further extension of the global value chain, the diversification of export products from countries around the world has been further enhanced. "The impact of the initiative on the diversification of China's export products has important practical significance. Firstly, this paper introduces the Herfindal-Hirschman index (HHI) to measure the diversification of export products, and analyzes the current situation of the diversification of export products from countries along the Belt and Road to China based on the data from 2010 to 2019; Secondly, this paper matched CEPII data, United Nations data, World Bank WDI data and the data of the "Belt and Road" cooperation agreement signed with China to form the sample data of 63 countries from 2009 to 2019. Based on the pseudo-natural experiment framework, the dual difference model is used to test the relationship between the participation of countries along the Belt and Road Initiative and the diversification of their exports to China. The research perspective is focused on participating countries and non-participating countries, and a comparative analysis is conducted to explore whether joining the Belt and Road Initiative is conducive to improving the diversification level of export products from countries along the Belt and Road initiative to China compared with countries not participating in the Belt and Road Initiative; Finally, based on the qualitative analysis and empirical analysis above, this paper puts forward a series of countermeasures and suggestions, such as focusing on exporting domestic competitive products, reforming the exchange rate management system and promoting the development of cross-border e-commerce.

International Trade of Masks and COVID-19 Pandemic Containment.

This study analyzes the impact of the exports of China's masks and other antivirus supplies on the people from the importing countries who are subject to the severe pandemic during the coronavirus disease 2019 (COVID-19) pandemic. Our main data include the COVID-19 cases data of countries around the world published by Johns Hopkins University and the data of China's exports of masks or other antivirus supplies to these countries from the Chinese Customs Database. Using cross-sectional data of about 180 countries and multiple regression analysis, we find that the antivirus supplies from China have played an important role in combating the COVID-19 pandemic. Specifically, China's masks are shipped to countries around the world, and these masks can improve the recovery rate and protect people against the COVID-19 pandemic. Our findings are relevant to global efforts in the COVID-19 pandemic containment.

Global value chains participation and carbon emissions embodied in exports of China: Perspective of firm heterogeneity

This paper studies the impact of global value chains (GVCs) participation on carbon emissions embodied in exports (EEE) of China during 2005–2016, and analyses firm heterogeneity from the perspective of firm ownership and trade patterns; Then, industries are classified based on factor intensity and technology level, and the industrial heterogeneity of different firms is analyzed; Finally, through counterfactual analysis, this paper evaluates EEE under four anti-globalization scenarios. The empirical study shows that with the increase of GVCs position, EEE first increases and then decreases, showing an inverted U-shaped distribution. From the perspective of firm ownership, the relationship between GVCs position of domestic firms and EEE is inverted U-shaped distribution, while GVCs position of multinational enterprises (MNEs) is positively correlated with EEE. The relationship of capital-intensive and technology-intensive domestic firms, high-tech and medium-tech manufacturing domestic firms are also inverted U-shaped distribution. The positive correlation of MNEs is reflected in the low-tech manufacturing industries. From the perspective of trade patterns, with the increase of GVCs position, EEE of processing trade firms presents an inverted U-shaped distribution, while it is not significant for general trade firms. The inverted U-shaped relationship between GVCs position in capital-intensive industries and EEE are confirmed in all firms. Under anti-globalization scenarios of 50% backflow, EEE would increase. Under scenarios of 100% backflow, EEE would reduce. The results above provide useful references to achieve carbon emission reduction targets.

Economic Policy Uncertainty (EPU) and China's Export Fluctuation in the Post-pandemic Era: An Empirical Analysis based on the TVP-SV-VAR Model.

In the COVID-19 pandemic, the bidirectional policy adopted by the governments to stimulate domestic economy and reinforce foreign trade control is making the trade environment abnormally complex. China is facing a new challenge in export trade growth. Based on the continuous monthly data from January 2002 to April 2021, this paper uses the time-varying TVP-SV-VAR model to study the impulse response of China's export trade to economic policy uncertainty (EPU). It is found that (1) on the whole, the shock of global EPU and China's EPU on China's export to the OBOR/RCEP member countries is time-varying, different, and structurally significant; (2) during the pandemic, EPU has a significant short-term negative shock on China's gross exports and export to OBOR/RCEP members, and this shock is especially big in the case of global EPU. In the post-pandemic era, China should strengthen pandemic control and economic risk monitoring, continue with execution of multilateral FTAs and create a sustainably stable export trade environment.

Some problems of trade relations during the Mongol rule in China

In the article, the author establishes to what extent the nature of China’s foreign trade underwent changes during the Mongolian Yuan dynasty. The author’s task is to explain some aspects of the continu- ity of trade relations when power in China passes from the Southern Song Empire to the Yuan Empire, China’s entry into the Eurasian Mongolian Empire. The author conducted a comparative analysis of ma- terials on trade in China in various sources, which reveal the nature of commercial transactions, imports and exports of China in the Yuan period compared to the period when the Southern Song Dynasty ruled. The works considered in the article are devoted to the history of trade of the XIII century, commodity exchange and trends in the economic development of the region, are valuable sources of the period from the fall of the Song Dynasty to the coming to power of the founder of the Yuan Dynasty. A comparative analysis of the works revealed similarities in the characteristics of a number of phenomena and process- es, which confirms the accuracy of the reports of medieval authors. As a result of the research, the author comes to the conclusion that the coming to power of the Yuan dynasty has had a positive impact on the trade situation in the region, the position of merchants has become stronger compared to the previous period, external relations have remained and developed, the developed system of collecting duties has shown a high level of organization of the bureaucratic apparatus, the range of imported and exported goods has significantly expanded. Key words: trade, Yuan empire, Mongol empire, foreign trade, price evolution.

Place-specific product relatedness and the environmental performance of non-polluting exports in China.

Does the growth of non-polluting exports lead to better environmental performance? The answer depends on how these exports rest on local comparative advantages. The more exports rely on polluting inputs, the worse their environmental performance would be. In practice, it is difficult to directly measure the polluting inputs for exporting products at the local level. This study proposes an approach to measure the reliance of exports on local polluting inputs, based on the product relatedness theories and the resource-based view of firms. This approach applies the locational quotient to indicate local resource advantages. Then, it uses the co-occurrence probability to measure the product relatedness of one export to local resource advantages. Finally, it distinguishes the product relatedness to polluting resource advantages from non-polluting ones. A higher level of polluting product relatedness is expected to depress the environmental performance of exports. Using 30 sectors in 281 Chinese cities as a case, this study applies the fixed effect model and the threshold regression model to examine the effects of product relatedness on environmental performance. Empirical results support the efficiency of using product relatedness to predict the environmental performance of exports. A higher level of polluting product relatedness leads to poorer environmental performance and more adverse effects of export growth on the environment.

Influence of carbon tariffs on China's export trade.

The database of the Global Trade Analysis Project (GTAP) and its energy–environmental model, known as GTAP-E, are used in this study to simulate the effect of the simultaneous and separate carbon tariff impositions of EU, the USA, and Japan on the export and export structure in China. Simulation results show that the carbon tariff impositions of developed countries on China will decrease the export to EU, the USA, and Japan but increase the export of China to other countries associated with the trade diversion in China. The USA and EU impose carbon tariffs on China, which will have a serious impact on China’s export trade, especially for the export trade of energy-intensive industries. When Japan imposes carbon tariff on the exports of China, the positive influence on the export trade is weaker compared to the situation that the USA and EU imposed on China. Furthermore, imposing carbon tariffs on China will improve its trade structure; promote its agriculture, petroleum, and natural gas exploration and electricity industries; reduce its export trade volume of coal mining, petroleum products, and energy-intensive and other industries; decrease the export trade share of energy-intensive industries; and increase the export trade share and services of other industries. In this regard, China should reduce the carbon content of export products initiatively. On the one hand, China can solve this problem by levying carbon tax, developing emerging industries, and strengthening the research and development of low-carbon technologies. On the other hand, China should actively participate in the formulation of international standards of carbon tariff and become a participant in the international emission reduction rules in the field of climate change.

Does cultural diversity contribute to the sustainable development of trade? Empirical evidence from 288 Chinese cities

AbstractThere is mounting theoretical and empirical research that explains the reasons for the rapid expansion of China's export trade, but they mostly ignore the effects of cultural differences. To fill this gap, this paper provides an empirical investigation of how cultural diversity affects the sustainable development of trade, which is defined as the goal of maintaining certain volume of trade and making trade growth sustainable. The findings are as follows. (1) Cultural diversity can significantly promote the sustainable development of trade. (2) Entrepreneurship is the possible channel wherein cultural diversity affects the sustainable development of trade, including innovation entrepreneurship and business entrepreneurship. (3) Further studies demonstrate that economic openness has a significant moderating effect on the relationship between cultural diversity and the sustainable development of trade. That is, the higher the level of openness of a city, the stronger the promotion of cultural diversity to the sustainable development of trade. This study not only deepens understanding on the relationship between culture and trade but also provides important policy implications for many countries that have high migration rates.

Impact of Macroeconomic Indicators on the Yuan-SDR Exchange Rate

The paper endeavours to explore the macroeconomic impact on the Yuan SDR exchange rate of China during 2017m1-2021m6 to justify the internationalization of RMB which had entered into the SDR basket of IMF in October 2016.To evaluate the impact ,the paper used the methodology of Johansen (1988) cointegration and vector error correction model considering monthly Yuan per SDR as dependent variable and monthly GDP, inflation rate, foreign exchange reserves, export and import as the independent macro-economic variables. The pattern of trendline of Yuan per SDR is found nonlinear having cyclical fluctuations and seasonal variations according to Hamilton (2018). The paper also found that Yuan per SDR has significant long run causalities with export, import, inflation rate, GDP and foreign exchange rate of China during the specified period. Even, Yuan per SDR has significant short run causality with export only. The cointegrating equation converged towards the equilibrium with the speed of adjustment 11.83% per month significantly. The impulse response function of import to Yuan per SDR showed significantly convergent. The VECM contains autocorrelation problem and unit root for which it is non-stationary.

A reply to ‘Intensifying Caribbean market share within China: a CARICOM case assessment’ by Alleyne

This reply responds to Antonio Alleyne’s (2021) ‘Intensifying Caribbean market share within China: a CARICOM case assessment’, the author’s attempt to investigate the potential for increasing the market share of Caribbean exports in China. The article shows that there are opportunities to increase exports from the Caribbean in more than 50 per cent of the industries considered. These opportunities, however, have been falling over time. The article explores a very interesting topic but suffers from some methodological challenges that might limit the inferences that can be drawn from the study.

E&P Notes (November 2021)

E&P Notes (November 2021)

China trade with belt and road countries: the role and impact of institutions

ABSTRACT This article investigates the impact of institutional quality on China’s trade with belt and road economies by testing the augmented gravity model framework. Our empirical analysis is based on 16 years of balanced panel data of 65 belt and road economies. We use the instrumental variable estimator developed for a panel data model to address the potential endogeneity issue. We distinguish the vital role of institutions in trading partner countries in shaping this result. Our outcomes outline an interesting story about the association between institutional quality and China’s export to and import from belt and road countries. We find that the weaker voice and accountability and political stability in B&R countries negatively affect China exports, while China import from B&R economies shows a statistically positive effect of institutions. Our findings are robust to employs a panel pseudo-maximum likelihood (PPML) estimation method. As part of wider trade integration, we conclude that the B&R countries should strengthen their institutions. The results of this study have several implications for policymakers.

Does cultural distance hinder exports?: A comparative study of China and the United States

There is little consensus on the role of cultural distance in exports. Studies have shown that positive or negative effects of cultural distance on exports are attributed to the substitution or complementary effects through trade costs and preference. Using export data of the two world's largest exporting countries, China and the United States (US), with 97 trading partners from 2004 to 2016, we employ a nonlinear gravity equation to examine the potential effects of cultural distance. We find that cultural distance hinders exports for both China and the US through trade costs and preference channels. Cultural distance impedes the exports of China and the US along traditional vs. secular-rational values (TSR) and survival vs. self-expression values (SSE) dimensions, respectively. Furthermore, differentiated products, variations in continents, and levels of economic development of trading partners separately vary for the effects of cultural distance on the exports of China and the US.

Computer Dynamic Forecast Model with Adaptability through the Method of Rank-Sum Ratio

At present, global political and economic relations are very tense. After the occurrence of major political, economic and financial shocks, it will have a significant impact on the employment of all countries. Our goal is to analyze the impact of the trade war on China's imports and exports and on employment rate in the United States. Firstly, according to sino-us trade countermeasures and referring to SitcRev2, the goods were classified according to the added value of technology. Then, the coefficient of variation method was used to obtain the weight value. Secondly, the rank-sum ratio comprehensive evaluation method is used in to evaluate and rank the imports and exports of China and the United States from 2007 to 2018. Based on the above analysis and the factors affecting the employment rate, we establish a employment rate economic model. Through the collected data, VAR stationarity test and Granger causality test are conducted on the model. Finally, the specific impact of the trade war on the US employment rate is obtained through impulse response and variance decomposition.

How COVID‐19 Medical Supply Shortages Led to Extraordinary Trade and Industrial Policy

Early in the COVID‐19 pandemic, a global shortage of hospital gowns, gloves, surgical masks, and respirators caused policymakers globally to panic. China increased imports and decreased exports of this personal protective equipment, removing supplies from world markets. Shortages led to European Union and US export controls as well as other extraordinary policy actions, including a US effort to reserve supplies manufactured in China by a US‐headquartered multinational. By April 2020, China's exports had mostly resumed, and over the rest of the year its export volumes surged. But China's export prices also skyrocketed and remained elevated through 2020, reflecting severe and continued shortages. This paper explores these and other government actions, such as US trade war tariffs and US industrial policy in the form of over $1 billion of subsidies to build out its domestic personal protective equipment supply chain, as well as potential lessons for future pandemic preparedness and international policy cooperation.

Factors Influencing China’s Outward Foreign Direct Investment

The main purpose of this study is to explore factors determining China’s outward FDI (OFDI), with particular emphasis on the unique characteristics of China’s economy during the period of institutional transformation. The empirical results obtained in the present study show that Chinese enterprises tend to invest in countries that have a mature economy. Exports have a significantly positive effect on China’s OFDI, with the relationship between OFDI and exports in China being a complementary one. The relationship between imports and OFDI for China is one of substitution, as Chinese enterprises have often relied upon the importation of key components as a means of acquiring the technology they need. Exchange rates, monopolistic advantage, foreign exchange reserves and the level of technology intensity, all have a significant impact on China’s OFDI, while the GDP growth rate and geographical distance have not had a significant impact. JEL Classification: F200, O160, P450

The Influence of the COVID-19 Pandemic on the Imports and Exports in China, Japan, and South Korea.

In this paper, time-series and cross-country data spanning from January 2020 to December 2020 are adopted to empirically investigate the impact of the COVID-19 pandemic on exports and imports in China, Japan, and South Korea. In the models, industrial production, trade openness, government response (including monetary and fiscal intervention), and the pandemic impact of major trade partners are controlled. In addition, the three countries, China, Japan, and South Korea, are also estimated separately in consideration of the cross-country disparity. The results show that domestic epidemics in China, Japan, and South Korea have a non-significant (statistically significant) effect on imports, but are negatively correlated with exports in Japan; epidemics in major trading partners are negatively correlated with imports in Japan and positively correlated with exports in China and South Korea; and government intervention is positively correlated with imports in China and positively correlated with exports in China, Japan, and South Korea.

Examining Export-Led Growth in Sub-Saharan Africa and China

Export-led growth is an economic hypothesis that links the level of a nation’s exports to economic growth in that country. Seen primarily as a model for low-income, developing nations to accelerate convergence as China began to do in the 1980s, the hypothesis theoretically still stands for developed nations. However, there exists significant discussion and doubt as to the strength and causality of the relationship between exports and growth, especially after a nation has industrialized and established itself as a major exporter. This paper examines and compares the effect of exports, imports, and net exports on economic growth for a set of low-income nations (Sub-Saharan Africa) and a country that has already undergone a significant economic transformation (China, at the provincial level). I regress the share of exports, imports, and net exports against GDP growth for Sub-Saharan African nations and Chinese provinces, and use instrumental variables to check for robustness. I find that while in Sub-Saharan Africa the share of exports and net exports exhibit a positive relationship with economic growth, higher shares of exports and net exports in China are associated with lower economic growth. This suggests that export-led growth is valid in Sub-Saharan Africa, but no longer is in China. I pose two potential explanations for this outcome in China: inefficient trade with low-income nations or decreasing trade with high-income nations. Regressions of China’s exports to these two types of economies over time indicate that the latter is the primary cause of the distinction in the effect of exports.

How much did China's emergence as “the world's factory” contribute to its national income?

Over time, China upgraded its capabilities to such an extent that it requires less imported materials, components, and services to maintain its central role in the global production network. Consequently, the domestic value added content of its exports has increased over time. Still, value added includes profits, which are partly earned by foreign capital owners, many of whom have set up operations in export processing zones. Such profits can be repatriated, and do not directly enhance the living standards in China. This paper will focus on the extent to which China's exporting activities have contributed to its Gross National Income (GNI), which is a better indicator of economy-wide living standards than GDP. Our results, based on input-output analysis, show that the increase in the share of Chinese GNI of a yuan of Chinese exports from 2002 to 2007 was modest, despite a marked growth of Chinese GDP contained in such a yuan of exports. From 2007 to 2017, however, the continued increase of domestic value added per yuan of exports did actually translate into considerably higher contributions of exports to GNI. Decomposition analyses show that changes in the commodity composition of China's export bundle and changes in the shares of national income in value added were the main cause of the different patterns before and after the financial crisis.

Combined soft measurement on key indicator parameters of new competitive advantages for China's export

The estimation of the difference between the new competitive advantages of China's export and the world’s trading powers have been the key measurement problems in China-related studies. In this work, a comprehensive evaluation index system for new export competitive advantages is developed, a soft-sensing model for China’s new export competitive advantages based on the fuzzy entropy weight analytic hierarchy process is established, and the soft-sensing values of key indexes are derived. The obtained evaluation values of the main measurement index are used as the input variable of the fuzzy least squares support vector machine, and a soft-sensing model of the key index parameters of the new export competitive advantages of China based on the combined soft-sensing model of the fuzzy least squares support vector machine is established. The soft-sensing results of the new export competitive advantage index of China show that the soft measurement model developed herein is of high precision compared with other models, and the technical and brand competitiveness indicators of export products have more significant contributions to the new competitive advantages of China's export, while the service competitiveness indicator of export products has the least contribution to new competitive advantages of China's export.