Developmental Aspects of China¡¯s Trade Pattern: The Role of Imported Intermediate Goods

John Berdell () and Qi Hong Dong
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Qi Hong Dong: Department of Economics, College of Commerce, DePaul University, Chicago, IL 60604, USA

Frontiers of Economics in China-Selected Publications from Chinese Universities, 2011, vol. 6, issue 4, 556-567

Abstract: This paper studies the relationship between China¡¯s trade and its economic development. More than two centuries ago Adam Smith argued that it is the use of imported intermediate goods that constitutes the vector through which openness improves productivity. Imported intermediate goods can relieve what would otherwise be key constraints allowing faster growth, together with better human development. While China¡¯s trade reform is often related to its productivity growth, there has been remarkably little attention to the relationship between imports and productivity growth at the industry-sectoral level. Our paper examines the sector-specific impact of intermediate goods utilizing a time series for the share of imported intermediate goods in each sector derived from our model calculations. Our study indicates that imported intermediate goods are playing an important role in the growth of Chinese productivity.

Keywords: intermediate goods; vertical specialization; total productivity growth; international linkages to development (search for similar items in EconPapers)
JEL-codes: F15 F23 L60 O19 (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:fec:journl:v:6:y:2011:i:4:p:556-567

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