Export Diversification in China-A Study of How Different Sectors Have Developed

The purpose of this study was to examine China's industrial reforms and whether China has shifted its production from primary and labour intensive products to more complex goods in other sectors. The trade theory that has been utilized is based on the neoclassical model and with the help of new trade theory of product differentiation and economies of scale. In order to examine this mirror data from EU15 from the OECD database was used. The measurements used were Herfindahl index, Cumulative export experience function, intra-industry trade and RCA. By looking at the results of these calculations it was concluded that China has gone from specializing in Labour intensive goods to more complex goods in the machinery sector