Are Chinese Trade Flows Different?
53 Pages Posted: 2 Mar 2012 Last revised: 6 May 2023
There are 2 versions of this paper
Are Chinese Trade Flows Different?
Date Written: March 2012
Abstract
We find that Chinese trade flows respond to economic activity and relative prices - as represented by a trade weighted exchange rate - but the relationships are not always precisely or robustly estimated. Chinese exports are generally well-behaved, rising with foreign GDP and decreasing as the Chinese renminbi (RMB) appreciates. However, the estimated income elasticity is sensitive to the treatment of time trends. Estimates of aggregate imports are more problematic. In many cases, Chinese aggregate imports actually rise in response to a RMB depreciation and decline with Chinese GDP. This is true even after accounting for the fact a substantial share of imports are subsequently incorporated into Chinese exports. We find that some of these counter-intuitive results are mitigated when we disaggregate the trade flows by customs type, commodity type, and the type of firm undertaking the transactions. However, for imports, we only obtain more reasonable estimates of elasticities when we allow for different import intensities for different components of aggregate demand (specifically, consumption versus investment), or when we include a relative productivity variable.
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
The Collapse of International Trade During the 2008-2009 Crisis: In Search of the Smoking Gun
By Andrei A. Levchenko, Logan T. Lewis, ...
-
By Mary Amiti and David E. Weinstein
-
By Mary Amiti and David E. Weinstein
-
Off the Cliff and Back? Credit Conditions and International Trade During the Global Financial Crisis
By Davin Chor and Kalina Manova
-
Off the Cliff and Back? Credit Conditions and International Trade During the Global Financial Crisis
By Davin Chor and Kalina Manova
-
Trade and the Global Recession
By Jonathan Eaton, Samuel S. Kortum, ...
-
Trade and the Global Recession
By Jonathan Eaton, Samuel S. Kortum, ...