What Led China's Structural Changes of Export?

SU Anna

Abstract:This paper highlights the source of China's recent export progression, which profited from cost and non-cost competitiveness.Structural transformation is one of the most important factors among them.We firstly analyse dynamics of export specialization.China succeeded in structural reform from 1990s, i.e.more specialized in sophisticated sectors while less in low qualified one.Secondly, we utilize Input Output Table and compute vertical specialization of trade by partner country and by tech level.We then find out what led China's dynamics of export specialization.During 1995-2007, foreign content of Chinese export raised rapidly.The higher technological level of export, the more imported inputs it needs.This means that China's more specialized in sophisticated sectors were mainly led by inputs'import instead of domestic production.On contrary, China gained less from a unit of export than before.In this section also concludes that Chinese pattern of export progression promoted other countries'export, especially for Asian economics.Finally, we provide an empirical study that explains export by foreign content.It proves that Chinese export relies on intermediate inputs'import and the dependence was deeper for high-tech export than low-tech one.

Key words:structural change, vertical specialization, Input Output Table