Export Destination and Export Market Penetration of the People's Republic of China—Past and Future

Rui Mao and Bin Zhang ()
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Bin Zhang: Senior Fellow, Institute of World Economics and Politics, Chinese Academy of Social Sciences

Asian Development Review, 2015, vol. 32, issue 1, 142-166

Abstract: Growth in the aggregate market penetration rate (MPR) of the People's Republic of China (PRC) slowed during the period 2002–2014. Closer examination of the destinations and product levels reveals a simultaneous weakening in various markets. Production and trade costs were found to be the main determinants of these changes, while productivity growth and real exchange rate appreciation had either insignificant or limited effects. Predicting trends until 2016, we expect the MPR in almost all destinations and product markets to increase in the optimistic case. However, in a more realistic case, the MPR will likely plateau or fall in most markets. To stabilize exports, the PRC must actively facilitate structural transition in destinations and products. Meanwhile, macro policies to boost domestic demand are also urgently needed to maintain the country's high economic growth.

Keywords: China; market penetration rate; economic growth; export markets; export growth; export destinations (search for similar items in EconPapers)
JEL-codes: F1 F15 (search for similar items in EconPapers)
Date: 2015
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