Heterogeneity and Domestic Value Added of Chinese Exports

https://www.grips.ac.jp/list/en/facultyinfo/xing_yuqing/Chinese processing exports use imported intermediates more intensively than its ordinary exports. The share of processing exports in the Chinese exports to high income countries is much higher than that to low income ones. That heterogeneity suggests that the domestic value added of Chinese processing exports differs from that of the ordinary exports, and the domestic value added of Chinese bilateral exports should vary across its trading partners. In this study I estimate the domestic value added of Chinese processing exports, ordinary exports, total exports and bilateral exports to 150 countries from 2004 to 2018, giving consideration to the heterogeneity. The estimates indicate that the domestic value added of processing exports was 30.1% in 2004, about 55 percentage points lower than that of ordinary exports. From 2004 to 2018, the domestic value added of total Chinese exports rose from 54.5% to 63.7%. However, the significant disparity in the domestic value added between processing and ordinary exports was persistent during the period. The domestic value added of Chinese exports also varied significantly across 150 trading partners. In 2004, it ranged from 39.5% to 84.1%. Generally, Chinese exports to developing countries were embedded with higher domestic value added than that to developed countries. Compared with the Chinese domestic value added reported by the OECD TiVA, the estimates of this study are 20 percentage lower on average.JEL Classification Codes: F1technical repor