China and the manufacturing exports of other developing countries

Abstract. In this paper, we examine the impact of China’s growth on developing countries that specialize in manufacturing. Over 2000-2005, manufacturing accounted for 32 % of China’s GDP and 89 % of its merchandise exports, making it more specialized in the sector than any other large developing economy. Using the gravity model of trade, we decompose bilateral trade into components associated with demand conditions in importing countries, supply conditions in exporting countries, and bilateral trade costs. We identify 10 developing economies for which manufacturing represents more than 75 % of merchandise exports (Hungary, Malaysia, Mexico