In this paper we use new, detailed, and comprehensive linked firm-transaction data to measure the domestic content and technology intensity of Chinese exports over the period 2000–2007. We evaluate the extent of value-added in China’s exports, using a modification of a method proposed by Hummels et al. (2001) which takes into account the prevalence of processing firms. In addition, we provide new estimates of the skill-and technology-intensity of China’s exports. Our estimates of value-added suggest that the domestic content of China’s exports increased from only 53% to about 60% over the period 2003–2006. Our cross-firm analysis reveals that processing exporters have value-added shares approximately 50% lower than non-processing exporters, even after accounting for ownership, location, and industry. We also show that Chinese exports have become increasingly sophisticated, largely driven by skill and technology improvement within industries.
ASJC Scopus subject areas
- Economics and Econometrics