Export Sophistication, Diversification And Product Space...

Abstract By assessing the export sophistication, diversification and product space evolution, we discuss the reasons behind thirty years’ growth miracle of Chinese economy and causes of recent slowdown. Disaggregated export data dating back to 1985 is utilized to analyse the characteristics of China’s export basket especially its sophistication level and diversification degree. And China’s development path as constantly extending into production of new and more complex commodities is discussed. From the perspective of product space, the following progress route is identified. It firstly diversified from primary goods to manufactured articles, and then to electronics clusters as technology improved and capabilities accumulated. Currently,†¦show more content†¦After thirty years of development, China has transferred itself into a major world economy player. Nevertheless, formidable growth since transition to market economy does not necessarily eliminate the risks of serious problems ranging from regional development imbalance to unequal income distribution. Specifically, Per capita income of wealthier provinces like Beijing and Shanghai is more than triple that of less developed provinces like Gansu . Besides, China’s GINI ratio reaches 0.47 in 2014 (National Bureau of Statistics of China), which is above the critical value revealing its relatively higher income distribution inequality level. Export-led growth pattern has enhanced China’s integration with world economy while it also makes China more vulnerable to external shocks with nearly a quarter of GDP coming from exports . Given these challenges, will China continue to grow at such speed? Felipe et al (2013) estimated that it was unlikely for China to continue registering high growth rate any longer since its past thirty years’ development has created wonders but also inefficiencies and imbalances. We have witnessed China’s inevitable deceleration in recent years with annual GDP growth rate declining for five years in a row, which fell to 7.35% in 2014. According to several growth projections, China’s average annual growth rate