Is China Only Assembling Parts and Components? The Recent Spurt in High Tech Industry

Abstract

The purpose of this paper is to evaluate to which degree China is climbing up the technology ladder and increasing its domestic content in high tech industry. More specifically, we will assess whether China has increased its share in world trade of high tech goods and, at the same time, increased its domestic content, changing its role from a mere final assembler to a producer of more intense technology goods. We have built and indicator of domestic value added calculated as the difference between exports of final goods and imports of its parts and components. The main conclusion is that this measure has increased significantly since the early 1990’s, putting in evidence the profound changes that occurred in China’s high tech exports in the last two decades

Keywords: External Trade, Innovation, China, Production Fragmentation, Comércio exterior, Inovação, China, Fragmentação da Produção

JEL Classification: F14, O33