Journal of International Trade, 2014, Issue 11

Authors: SHENG Bin, LV Yue

Abstract: Based on the extended instrument of measuring the dual margins of trade, this paper uses micro-trade data from 2001 to 2010 to estimate the varied performance of China’s exports under the positive effect of trade liberalization and the negative impact of financial crisis. It is found that the growth of China’s exports mainly stem from the intensive margin, with a limited contribution of the extensive margin mainly manifested through the existing portfolio of products and markets rather than the diversification of new products and new markets. This characteristic becomes particularly evident after China’s accession to the WTO. Under the impact of the financial crisis, the sharp drop in the intensive margin accounted for the short-term shrinking of China’s exports. In addition, the performance varies significantly as a result of different structures of China’s trade margins and different types of target markets and technological complexity of products.

Keywords: Margins of trade; Financial crisis; Export; China