5. Conclusions and Policy Implications
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.