5. Con­clu­sions and Pol­icy Im­pli­ca­tions

China Economist - - Articles -

Us­ing the UNCom­trade data and the World Bank’s WDI data, this pa­per con­ducts an anal­y­sis of China’s com­mod­ity trade struc­ture up­grade over the past two decades. First, this pa­per cal­cu­lates China’s tech­ni­cal level-spe­cific ex­ports as a share in its to­tal ex­ports and com­par­a­tive ad­van­tages ac­cord­ing to Lall’s com­mod­ity clas­si­fi­ca­tion. Re­sult shows that China’s ex­port struc­ture up­graded from pri­mary prod­ucts to high tech­nol­ogy man­u­fac­tures over the past two decades. Ac­cord­ing to tech­ni­cal value-added in­dex TCI, it can be seen that China’s over­all ex­port tech­nol­ogy level up­graded sig­nif­i­cantly in terms of both world rank­ing and tech­ni­cal in­di­ca­tors. Then, this pa­per ex­am­ines China’s ex­port struc­ture up­grade in terms of prod­uct qual­ity. Re­sult shows an up­grade of China’s ex­port­ing prod­ucts of most tech­nol­ogy cat­e­gories from low qual­ity to medium and high qual­ity. Although the qual­ity of China’s tech-in­ten­sive ex­port­ing prod­ucts had widen­ing gaps with world fron­tier lev­els, China’s over­all ex­port qual­ity has im­proved re­mark­ably over the past two decades.

This pa­per also em­ploys trade com­modi­ties’ cat­e­gories, tech­ni­cal value- added and qual­ity to fur­ther an­a­lyze China’s bi­lat­eral trade with its five ma­jor trad­ing part­ners. Medium and high tech­nol­ogy man­u­fac­tures ac­counted for a ris­ing share of China’s ex­ports to the U.S., Ja­pan, South Korea, Ger­many and Aus­tralia, while high tech­nol­ogy man­u­fac­tures as a share in China’s im­ports barely changed. As can be seen from tech­ni­cal value-added in­dex, China’s ex­port­ing prod­ucts to the five coun­tries did not sig­nif­i­cantly up­grade, while its im­port­ing prod­ucts even be­came less tech-in­ten­sive. High-qual­ity prod­ucts rep­re­sented a grow­ing share of China’s ex­ports to the five coun­tries. How­ever, China’s ex­port­ing prod­ucts were of poorer qual­ity com­pared with its im­ports. , There­fore, China had a trade deficit in terms of qual­ity.

As can be seen from the tech­nol­ogy and qual­ity lev­els of China’s trade struc­ture, China still has cer­tain gaps with de­vel­oped coun­tries such as Ja­pan and the U.S. Un­der China’s “mass in­no­va­tion and mass en­trepreneur­ship” cam­paign, we sug­gest Chi­nese pol­i­cy­mak­ers to take ap­pro­pri­ate mea­sures to sup­port indige­nous in­dus­tries to catch up with de­vel­oped coun­tries like Ja­pan and the U.S. in terms of tech­nol­ogy and qual­ity.

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