Review of World Economics

, Volume 143, Issue 2, pp 201–226 | Cite as

China and the Exports of Other Asian Countries

Article

Abstract

We analyze the impact of China’s growth on the exports of other Asian countries, distinguishing China’s demand for imports from its penetration of export markets. We account for the endogeneity of Chinese exports by applying instrumental variables in a gravity model with country-pair fixed-effects. We find that China’s crowding-out effect is felt mainly in markets for consumer goods and hence by less-developed Asian countries, not in markets for capital goods or by the more advanced Asian economies. Meanwhile, China has been sucking in imports from its Asian neighbors, but this effect is mainly felt in markets for capital goods. Hence, more and less developed Asian countries are being affected very differently by China’s rise.

Keywords

China Asian Countries exports gravity model 

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Copyright information

© Kiel Institute 2007

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of CaliforniaBerkeleyUSA
  2. 2.Sookmyung UniversitySeoulSouth Korea
  3. 3.International Monetary FundWashington, D.C.USA

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