| In the section | Articles |
| Title of the article | The Foreign Trade of Domestic and External Sectors of the Chinese Economy |
| Pages | 49-66 |
| Author |
Dmitry Alexandrovich Izotov Candidate of Economics, Senior Research Fellow Economic Research Institute FEB RAS 153 Tikhookeanskaya Street, Khabarovsk, Russia, 680042 This email address is being protected from spambots. You need JavaScript enabled to view it. |
| Abstract | The author estimates the reaction of the foreign trade of domestic and external sectors of the Chinese economy on the increase in the wages growth pace. On the basis of Chinese and international statistics for the period of 2001–2011 the author analyzes the structure of the foreign trade of domestic and external sectors of Chinese economy and estimates the factors of its dynamics. The article shows that the most dynamically developing segments of the domestic sector are private enterprises and the leaders of the external sector are TNCs. With the help of regression analysis the author proves that the increase in wages has the same negative impact on exports of both sectors; however, the export of private enterprises will be affected the most by the adverse impacts. It is determined that the increase in wages contributes to the reduction of the external sector imports and the domestic sector imports growth will be ensured by the internal demand mechanisms, mainly, with the help of private enterprises. The article shows that the increase of salaries contributes to the reduction of the positive trade balance of China at the expense of the domestic sector; however, the positive balance of the external sector (TNCs) will remain practically the same because of its very close links with the global markets of goods, capital and labour. So only the fluctuations of these markets can significantly influence the parameters of the external sector trade |
| Code | 339.5(470+510) |
| DOI | 10.14530/se.2012.4.049-066 |
| Keywords | export ♦ import ♦ domestic sector ♦ external sector ♦ private enterprises ♦ TNCs ♦ trade ♦ tolling ♦ balance of trade ♦ wages ♦ China |
| Download | |
| For citation | Izotov D.A. The Foreign Trade of Domestic and External Sectors of the Chinese Economy. Prostranstvennaya Ekonomika = Spatial Economics, 2012, no. 4, pp. 49-66. DOI: 10.14530/se.2012.4.049-066. (In Russian). |
| References | 1. Izotov D.A. Russian – Chinese Trade and Exchange Rate. Prostranstvennaya Ekonomika – Spatial Economics, 2012, no. 3, pp. 34–54. (In Russian). 2. Izotov D.A. Northeast of China in Crisis Tendencies in the World Economy. Ekonomika Regiona [The Region’s Economy], 2010, no. 4, pp. 229–234. (In Russian) 3. Ahuja A., Chalk N., Malhar N., N’Diaye P. Nathan P. An End to China’s Imbalances? IMF Working Paper 12/100, April, 2012. 22 p. Available at: (accessed 06 September 2012). 4. Amiti M., Freund C. An Anatomy of China’s Export Growth. Global Implications of China’s Trade, Investment and Growth Conference Research Department, April 6, 2007, 18 p. Available at: (accessed 06 September 2012). 5. CEIC Database. Available at: http://www.ceicdata.com (accessed 05 June 2012). 6. Cui L., Syed M. The Shifting Structure of China’s Trade and Production. IMF Working Paper 07/214, September, 2007, 29 p. Available at: (accessed 15 September 2012). 7. Hammer A.B. The Dynamic Structure of U.S. – China Trade, 1995–2004. Office of Economics Working Paper. U.S. International Trade Commission, July, 2006, 34 p. Available at: (accessed 05 June 2012). 8. Koopman R., Wang Z., Wei S.J. How Much of Chinese Exports Is Really Made in China? Assessing Foreign and Domestic Value-Added in Gross Exports. Office of Economics Working Paper. U.S. International Trade Commission, March, 2008, 38 p. Available at: (accessed 15 September 2012). 9. Li L., Dunford M., Yeung G. International Trade and Industrial Dynamics: Geographical and Structural Dimensions of Chinese and Sino-EU Merchandise Trade. Applied Geography, 2012, vol. 32, pp. 130–142. 10. Lim H., Kimura F. The Internationalization of Small and Medium Enterprises in Regional and Global Value Chains. ADBI Working Paper 231. Tokyo: Asian Development Bank Institute, 2010. Available at: http://www.adbi.org/working-paper/2010/07/29/3972.intl.enterprises. regional.global.value.chains/ (accessed 13.08.2012). 11. Thorbecke W. How Would an Appreciation of the Yuan Affect the People’s Republic of China’s Surplus in Processing Trade? ADBI Working Paper 219. Tokyo: Asian Development Bank Institute, 2010, 18 p. Available at: http://www.adbi.org/working-paper/2010/06/18/3913. yuan.affect..prc.surplus.trade/ (accessed 05 June 2012). 12. Thorbecke W. The Effect of Exchange Rate Changes on Trade in East Asia. ADBI Working Paper 263. Tokyo: Asian Development Bank Institute, 2011, 17 p. Available at: http://www.adbi.org/working-paper/2011/01/21/4339.effect.exchange.rate.changes.trade.east.asia/ (accessed 13 August 2012). 13. Thorbecke W., Salike N. Understanding Foreign Direct Investment in East Asia. ADBI Working Paper 290. Tokyo: Asian Development Bank Institute, 2011. Available at: http://www.adbi.org/working-paper/2011/06/23/4616.foreign.direct.investment.east.asia/ (accessed 13 August 2012). 14. Tyers R., Zhang Y. Appreciating the Renminbi. The University of Western Australia. Discussion Paper 10.13, May 2010, 36 p. Available at: (accessed 13 August 2012). 15. Whalley J., Xin X. China’s FDI and Non-FDI Economies and the Sustainability of Future High Chinese Growth. China Economic Review, 2010, vol. 21, pp. 123–135. 16. Xing Y. The People’s Republic of China’s High-Tech Exports: Myth and Reality. ADBI Working Paper 357. Tokyo: Asian Development Bank Institute, 2012, 10 p. Available at: http://www.adbi.org/working-paper/2012/04/25/5055.prc.high.tech.exports.myth.reality/ (accessed 13 August 2012). 17. Xu B., Lu J. Foreign direct investment, processing trade, and the sophistication of China’s exports. China Economic Review, 2009, vol. 20, pp. 425–439. |
| Financing | The study was carried out with the support of the Presidential Grant No. MK-4765.2011.6 and the project of the Far-Eastern Branch of the Russian Academy of Sciences No. 12-I-OGPMO-01 |