Exchange‐rate Effects on China's Trade*

Though China's share of world trade exceeds that of Japan, little is known about the response of China's trade to changes in exchange rates. The few estimates available have two limitations. First, the data for trade prices are based on proxies for prices from other countries. Secondly, the estimation sample includes the period of China's transformation from a centrally‐planned economy to a more market‐oriented one. We address these limitations with an empirical model explaining the shares of China's exports and imports in world trade in terms of the real effective value of the renminbi. The specifications control for foreign direct investment and for the role of imports of parts to assemble exports. Parameter estimation uses disaggregated monthly trade data and excludes China's decentralization period. We find that a 10 percent real appreciation of the renminbi lowers the share of aggregate Chinese exports by nearly one percentage point. However, the estimated response of imports is negligible and lacks precision.     

China's export tax rebate and the duration of firm export spells

Using a survival analysis technique, this paper investigates the impact of the export tax rebate (ETR) on duration of the firm, country/destination, and product (F–C–P)‐level export spells in China. Empirical analysis of a large dataset that covers the 2001 to 2013 period shows that the effect of ETR on duration of export spells of Chinese firms is large and statistically significant. A 1 percentage point increase in ETR rate increases the duration rate of F–C–P relationships by 23.2%. Furthermore, compared with the high‐tech firms, low‐tech and middle‐tech firms experience a larger increase in the duration of export spells in response to increase in China's ETR. Firm ownership‐based analysis shows that an increase in ETR leads to a larger increase in export spells of privately owned firms than the export spells of state‐ and foreign‐owned firms. These findings have important policy implications for the design and implementation of China's ETR policy.     

Impact of China on trade in electronic products

Using 6-digit product-level data of exports in electronics, this paper finds robust evidence that China's exports adversely affect both the intensive export margin and the extensive export margin of its competitors for the 1992–2018 period. The displacement effects of China's exports on the intensive margin apply especially for the group of intermediate and capital electronic goods and are much more robust and significantly larger in magnitude than the displacement effects found in other studies using aggregated trade data. Finally, we find that China's displacement effect is increasing in China's advantage relative to its competitors in terms of human capital index and internet access of its population.     

Does China really lose from RMB revaluation? Evidence from some export industries

This study attempts to examine the impacts of Real Exchange Rate (RER) misalignment on China's export performance. Using the SUR methodology coupled with disaggregate panel export data, it shows that China's export sector may not necessarily lose from the Central Government's decision to revalue its RMB against the US dollar because the negative impact of the RER appreciation on Chinese exports may be diluted by the positive impacts attributing to a reduction in the RER misalignment.     

出口国技术水平与进口国知识产权保护的互动效应对出口国出口贸易的影响——基于中国出口贸易的实证

利用2007—2014年中国对112个国家出口贸易的面板数据,实证研究了中国技术水平、进口国知识产权保护及两者的交互效应对中国出口贸易的影响。结果显示:中国技术水平与高收入进口国知识产权保护的交互效应对中国出口贸易的影响显著为负,而与低收入进口国知识产权保护的交互效应的影响并不显著。这说明,中国出口产品技术水平的提升,对高收入进口国企业的威胁加大,迫使其建立更严苛的贸易壁垒,抑制中国企业出口。     

Price Adjustment to Exchange Rates and Forward‐looking Exporters: Evidence from USA–China Trade

This paper shows that the pricing behavior of exporting firms exhibits a “forward‐looking” nature with sticky prices. As a result, the expectations of future exchange rates affect current prices at both the product level and firm level. We find evidence by employing both highly disaggregated Harmonized System (HS) 10‐digit product‐level import data of the USA and firm–product level customs data on China's exports to the USA. These findings provide evidence for a previously unexplored micro‐level forward‐looking nature of trade price adjustment as response to future exchange rates, and suggest a potentially important factor in helping explain incomplete exchange rate pass‐through.     

The Impact of Chinese Exports on Global Import Prices*

This paper evaluates the evidence bearing on the question of whether China's buoyant export growth has led to significant changes in the import prices, and thus inflation performance, of its trading partners. This evidence suggests that the impact of Chinese exports on global import prices has been, while non‐ negligible, fairly modest. We identify a statistically significant effect of US imports from China on US import prices, but given the size of this effect and the relatively low share of imports in US GDP, the ultimate impact on US consumer prices has likely been quite small. Moreover, imports from China had little apparent effect on US producer prices. Finally, using a multi‐country database of trade transactions, we estimate that, since 1993, Chinese exports lowered annual import inflation in a large set of economies by 0.25 percentage point or less on average.     

当前中国出口退税率调整对出口额的影响研究

随着全球经济的复苏,今年第一季度中国对外贸易恢复性增长势头良好。以中国为应对2008年金融危机造成的出口下滑,国家再度提高出口退税率作为研究背景。通过对出口退税率和出口额关系进行回归分析,得出出口退税率对出口额影响显著,以评价出口退税政策的客观效果。然而,强化提高劳动密集型产业的退税率,不利于中国出口产业结构的调整,而且退税率频繁变动,会干扰企业正常的经营决策。进而提出建立合理的、较为稳定的退税制度,促进中国经济增长方式转变和产业结构的升级,实现党中央可持续性发展的战略方针。     

中间品进口关税减让对出口高质量发展的影响：来自中国工业行业的证据

本文在当前中国推动经济高质量发展和积极主动扩大进口双重战略目标叠加的背景下,从行业层面入手研究中间品进口关税减让对出口高质量发展的影响.首先测度2001—2017年中国31个工业行业的中间品进口关税率和出口质量水平,然后据此构造面板数据进行实证分析,发现中间品进口关税减让能显著地促进出口质量升级,这一结论经空间相关和内生性检验后依旧稳健;但分样本回归结果显示该效应在低进口密集度行业中不明显,出口质量升级的外部动力是外资.中国应当依托海南自贸港建设加快推进中间品进口贸易自由化,重视进口中断风险,全力扶持企业自主研发创新,吸引高质量外资,最终助力出口实现高质量发展.     

The PRC's long-run growth through the lens of the export-led growth model

We explain China's remarkable growth performance over the last three decades through an export-led growth (ELG) model, where countries need to export to pay for their imports. We show that China's actual long-run growth rate is well approximated by its balance-of-payments equilibrium (BOPE) growth rate, defined as the long-run growth rate consistent with current account equilibrium. This growth rate is given by the ratio of the growth rate of exports to the income elasticity of imports. We estimate the latter using the Kalman filter, which allows us to obtain a time-varying estimate of China's BOPE growth rate. We find that the average value of China's BOPE growth rate during 1981–2016 was about 11 percent but fluctuated significantly over time and declined notably after 2007. It is estimated to be 5.9 percent in 2015. We then discuss the determinants of China's BOPE growth rate and of the income elasticity of imports, with the help of the Bayesian Model Averaging technique. The analysis highlights the role of the composition of aggregate demand as the main driving force, both for its direct effects on the income elasticity of imports, and for the indirect effects on export growth via capital accumulation, in particular fixed asset investment. Our analysis has important implications to understand China's transition to a “New Normal” of a lower growth rate and the effects of the external and internal rebalancing strategy pursued from the early 2000s.     

Modeling of the impact of the financial crisis and China's accession to WTO on China's exports to Germany

We focus on discussing the impact of China's accession to WTO and the financial crisis on China's exports to Germany, particularly in agricultural products, based on some most recent proposals. Firstly, structural breaks caused by those events are detected. Then the Box–Cox model and a new tree-form Constant Market Share (CMS) model are fitted to discover the long-term impact of those events on the trade relationship between China and Germany and the growth causes of China's exports to Germany. We found that China's accession to WTO had a negative short-term impact on China's exports and its market share in agricultural products, but a positive short-term impact on its market share in industrial products and a positive long-term impact on its exports and market share in both classes. The tree-form CMS model shows the growth of China's exports to Germany due to competitiveness after this event was much higher than before. The financial crisis exhibited a negative short-term impact on China's exports to Germany, but a positive short-term impact on China's market share and the trade relationship between both countries in industrial products. China's market share in agricultural products was not affected by the financial crisis.     

Learning from exporting in China

Do exports increase the firm's productivity causally? Focusing on the matched information of highly disaggregated transaction and firm‐level data from 2000 to 2006 in China, we construct a new measure of firm‐specific demand shock as an instrument for firm exports, based on the GDP growth rate of destination countries. We find that a one percentage point expansion in exports raises firm total factor productivity (estimated by the Olley–Pakes method) by approximately 0.224 percentage points on average. Moreover, we find that exports to high‐income countries, more processing exports and scope expansion about variety contribute to the learning effect.     

Congested Export Spillover in China

This paper uses Chinese firm‐level data to investigate the possible nonlinear spillover caused by export congestion. We argue that there could exist an inverted‐U curve in terms of export spillover effect, resulting from the fact that once exporters become over‐agglomerated, export congestion is likely to cause negative export spillover. The estimation results support the hypothesis of an inverted‐U curve of export spillover effect. Further calculation shows that the degree of Chinese exporters’ congestion approximately ranges around 17–34% and demonstrates an increasing trend over time. The finding suggests that policies aimed at reducing export congestion such as industrial upgrading, improvement of firms’ efficiency and the current shift from export dependence towards domestic demand would be important for a more healthy development of China's exports in the future.     

出口退税政策调整对中国出口影响的实证分析

2007年7月1日,中国大规模下调了出口退税率。本文运用倍差法(difference in difference),对出口退税率降低引起的出口变动进行了实证分析。结果表明:出口退税率下调对易引起贸易摩擦的商品出口增长率负影响显著,对高耗能、高污染、资源型产品的出口增长率负影响不显著。对政策动态影响和对多次政策调整的分析进一步验证了这一结果。本文据此认为该项政策部分而非全部达到了预想的效果。     

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.     

A general framework for measuring VAT compliance rates

Summary measures of Value Added Tax (VAT) compliance rates are valuable for identifying problem areas in VAT implementation. They are also essential for meaningful crosscountry and crosstime comparisons of VAT compliance. We present a comprehensive and general framework for calculating VAT compliance rates at both the economy wide and detailed sectoral levels. Unlike existing measures of VAT compliance, our framework isolates a compliance measure from the effects on VAT receipts of detailed features of VAT systems as actually implemented by tax authorities. These features include multiple VAT rates, exemptions, registration rates, refund limitations, informal activity, taxation of domestic nonresidents and undeclared imports. We implement our comprehensive VAT compliance measure for Vietnam, a country with a complex VAT system. Our estimate of Vietnam's VAT compliance rate is about 13 percentage points higher than that calculated by the most popular measure of compliance, Collection Efficiency (CE). Our method facilitates decomposition of the difference between CE and our VAT compliance measure into individual contributions by the statutory and structural features of Vietnam's VAT regime.     

Foreign Exchange Accumulation and the Entrapment of Chinese Monetary Power: Towards a Balanced Growth Regime?

This article criticises the notion that China's foreign exchange reserves have strengthened its monetary power. While some scholars have argued that China's international monetary influence has been ‘entrapped’ by the domestic interests of its export sector, a one-sided focus on the export sector fails to identify the significant constraints on its macroeconomic autonomy. This article proposes an extension of the concept of entrapment that draws attention to the key role of state-owned enterprises (SOEs) and their domestic fixed-asset investment in its growth regime: China's external monetary dependency – which is understood as both export dependency and the need to maintain foreign exchange accumulation – has been caused by a disparity between fixed-asset investment and private consumption that reflects a redistribution of income from the household sector to the SOE sector. In particular, I expose the SOE sector's rising interests in foreign exchange accumulation by uncovering a mutually reinforcing dynamic between China's external monetary dependence and the financial repression of its banking system. By entrenching an investment-led growth regime that provides key benefits the SOE sector, this dynamic is found to have seriously constrained the macroeconomic policy autonomy of Chinese authorities to rebalance growth away from investments and exports towards private consumption.     

How China is Reorganizing the World Economy*

We analyze the impact of China's integration into the global economy on other countries, Asian countries in particular. We first examine how the growth of China's exports is affecting the exports of other countries in Asia and the rest of the world. Our innovation is to distinguish exports of capital goods, consumer goods, and intermediates and to disaggregate textiles and consumer electronics, the most visible sectors where China's presence is felt. We next look to the impact of China on direct foreign investment flows. Here our innovation is to distinguish vertical and horizontal foreign direct investment (FDI) and to consider how they are affected by supply‐chain relationships. We then look more closely at factors influencing the articulation of these supply chains, the fragmentation of production, and the emerging international division of labor, focusing on two industries, electronics and autos, that exhibit very different responses. The results suggest that countries specializing in the production and export of components and raw materials feel positive effects from China's growth, while countries specializing in the production of consumer goods feel negative effects. Similarly, countries that compete with China for horizontal FDI find it more difficult to attract foreign investment as a result of that country's emergence, while countries that are potentially attractive destinations for vertical FDI find it easier to attract foreign investment as a result of trade links, especially in components and intermediates, that allow them to take advantage of supply chains involving their large and dynamically growing neighbor.     

Input–output analysis of CO2 emissions embodied in trade and the driving forces: Processing and normal exports

In recent years, energy-related CO₂ emissions embodied in international trade and the driving forces have been widely studied by researchers using the environmental input–output framework. Most previous studies however, do not differentiate different input structures in manufacturing processing exports and normal exports. Using China as an example, this paper exemplifies how implications of results obtained using different export assumptions differ. The study posits that the utilization of traditional I–O model results in an overestimation of emissions embodied in processing exports and an underestimation in normal exports. The estimate of CO₂ emissions embodied in China's exports drops by 32% when the extended I–O model is used. The choice of export assumption has more impact on the decomposition results for processing exports. The study further highlights that for a country with an export structure similar to China, it is meaningful to look into the impact of export assumption in embodied emission studies.     

金融支持、研发创新与出口复杂度——基于中国高新技术产业价值链的分析

随着中国的产业结构迎来了转型升级的历史契合点,高新技术产品出口成为了中国未来外贸交易的发展方向。影响中国高新技术产品出口复杂度的因素有许多,可是探讨金融支持和研发创新对出口复杂度影响的文献却不多。本文收集了从2008年到2018年期间的相关数据,构建了面板模型研究了金融支持和研发创新对出口复杂度的影响,结果发现：金融支持、研发创新以及两者的交互变量均与出口复杂度呈现出了正相关关系。在中国不同地区,金融支持和研发创新还是与出口复杂度呈现出了正相关关系,可是影响程度存在差异。金融支持可以通过研发创新对出口复杂度产生间接影响,但是研发创新不可以通过金融支持对出口复杂度产生间接影响。