China: prospects for export-driven growth

Brendan Coates, Dougal Horton and Lachlan McNamee
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Dougal Horton: Treasury, Government of Australia
Lachlan McNamee: Treasury, Government of Australia

Economic Roundup, 2012, issue 4, 79-102

Abstract: China’s rise as a merchandise exporter in recent decades is unparalleled. Supported by a rapidly growing urban workforce, massive investments in productivity enhancing infrastructure and technologies, a range of subsidies and incentives, and a favourable external economic environment, Chinese merchandise exports reached a staggering 36 per cent of China’s GDP in 2006. However, this remarkable export performance, which is somewhat exaggerated by China’s assembly role in global supply chains, is unlikely to continue, as Chinese exports reach saturation point in some export markets and domestic wages continue to rise. Instead, future export growth will increasingly be led by shifts in China’s exports towards more sophisticated goods and services as China adopts more advanced manufacturing technologies, and towards emerging economy destinations. This will underpin continued rises in China’s productivity and living standards, allowing consumer spending to become a more important internal driver of growth, as the economy reduces its reliance on export and investment demand

Keywords: growth model; export competitiveness; processing trade (search for similar items in EconPapers)
JEL-codes: F10 O10 O24 O30 O40 O53 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (5)

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