China and emerging Asia: comrades or competitors?

Alan Ahearne (), John Fernald (), Prakash Loungani and John W. Schindler

No WP-03-27, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: We explore whether increases in China?s exports reduce exports of other emerging Asian economies. We find that correlations between Chinese export growth and that of other emerging Asian economies are actually positive (though often not significantly so), even after controlling for the effects of income growth of trading partners and real effective exchange rates. We also present results from a VAR estimation of aggregate trade equations on the relative importance of foreign income and exchange rates in the determination of Asian export growth. An important finding is that, while exchange rates do matter for export performance, the income growth of trading partners matters even more. In addition, we examine specific products and find evidence that a considerable shifting of trade patterns is taking place, consistent with a ?flying geese? pattern in which China and ASEAN-4 move into the product space vacated by the NIEs. Overall, our results suggest that China and emerging Asia are both comrades and competitors. Disclaimer: The views expressed here are those of the authors and should not be attributed to the Federal Reserve Board, the Federal Reserve Bank of Chicago, or the International Monetary Fund.

Keywords: Exports; Foreign exchange rates; Trade; Economic conditions - China; Exports - China (search for similar items in EconPapers)
Date: 2003
New Economics Papers: this item is included in nep-ifn, nep-mac, nep-sea and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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