Export performance in China's regional economies

Abstract

China enjoyed unprecedented economic growth in the 1980s and 1990s. Associated with this growth was the rapid expansion of exports from the Chinese regions. This study aims to provide an empirical assessment of export performance in the Chinese regions during 1992–2001. It has shown that, on an average, China's regional economies have only achieved 70% of their export potential, leaving substantial scope for improvement. There is also considerable variation in export performance among the Chinese regions, with the noncoastal areas lagging behind. In addition, this article also shows that several region-specific factors (e.g. foreign direct investment, government spending, infrastructure development and the nonstate sector) have affected regional export performance positively. Furthermore, it is found that the development of China's western regions has boosted and will continue to improve the export sectors in these regions.

Notes

¹ See, for example: Anderson (1998); Drysdale et al . (2000); Brun and Renard (2002); Liu et al . (2002); Pigott (2002); and Lardy (2002).

² The examples include, for instance: Branson and Monoyios (1977); Stern and Maskus (1981); Urata (1983); Kyereme (2002); and Sharma (2003).

³ It should be pointed out that inter-provincial trade affects regional export performance. But internal trade data are hardly available in China. As a result, internal trade and its impacts are not addressed in this article.

⁴ Empirical work, for example, includes Hassan and Tufte (1998), Abbott and De Vita (2002) and Misas and Ramirez (2004).

⁵ There should be regional variation in the pattern of exports as well. This issue is however ignored here due to the lack of data on regional export patterns.

⁶ There are of course other factors that may affect export performance. These factors are not considered due to the lack of data.

⁷ See Wu (2004) for detailed discussions and a copy of the estimated data set.

⁸ Wang and Yao (2003) is an exception. Other studies marginally involved human capital include Demurger (2000), Jammes (2002) and Wu (2004).

⁹ The data set is available upon request.

¹⁰ See Canning (1998) for more detailed description.

¹¹ It is worthwhile to point out that Guillaumont and Hua (2002) estimated real effective exchange rates for the Chinese regions.

¹² One may argue that China's regions may face different external conditions such as different trading partners. However, this kind of information is difficult to obtain.

¹³ Further technical details can be found in Coelli et al . (1998) and Kumbhakar and Lovell (2000).

¹⁴ Detailed theoretical and empirical analyses are presented in Leamer (1984).

¹⁵ The contribution of the inefficiency effect to the total variance is λ/[λ + (1 − λ)π/(π − 2)] derived by Coelli et al . (1998).

¹⁶ The ‘western development programme’ covers 12 regions i.e. Ningxia, Guizhou, Shaanxi, Yunnan, Guangxi, Gansu, Qinghai, Sichuan, Inner Mongolia, Xinjiang, Tibet and Chongqing. Due to missing data, Tibet and Chongqing are excluded in the final regression analysis.