How Dependent is the Chinese Economy on Exports and in What Sense has its Growth been Export-led?

Dong He and Wenlang Zhang
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Wenlang Zhang: Research Department, Hong Kong Monetary Authority

No 814, Working Papers from Hong Kong Monetary Authority

Abstract: This paper studies the interaction between foreign trade and domestic demand and supply in China¡¦s economic transformation. It compares China¡¦s export dependency with other economies using input-output analysis. The paper also conducts econometric analysis of provincial level data to examine causality between the growth of foreign trade and different components of domestic demand, and causality between the growth of foreign trade and total factor productivity. The main message is that China¡¦s export dependency is significantly lower than commonly thought. Moreover, the contribution of export to economic growth in China came mainly from its impact on total factor productivity growth from a supply perspective rather than its multiplier effect from a demand perspective. This relationship was found to be stronger in the more developed coastal areas than in the less developed inland areas.

Keywords: Export-led growth; Export dependency; Input-output analysis; Malmquist index (search for similar items in EconPapers)
JEL-codes: F13 O11 O43 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2008-10
New Economics Papers: this item is included in nep-cna, nep-int and nep-tra
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Citations: View citations in EconPapers (6)

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http://www.info.gov.hk/hkma/eng/research/working/pdf/HKMAWP08_14_full.pdf (application/pdf)

Related works:
Journal Article: How dependent is the Chinese economy on exports and in what sense has its growth been export-led? (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:hkg:wpaper:0814

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