Accounting for the Evolution of China's Production and Trade Patterns
Abstract
ABSTRACT We study the evolution of China's production and trade patterns during its integration into the global economy. Using firm‐level microdata, we document how production and exports shifted across industries and within industries across firms. We quantify a Ricardian–Heckscher–Ohlin model with heterogeneous firms to account for these changes. Counterfactuals show capital deepening pushed China's production and exports toward greater capital intensity, while labor‐biased productivity growth provided an offsetting force. The model generates an inverted‐U pattern in China's trade openness—peaking in the mid‐2000s and declining through the 2020s—alongside a continuous rise in the world's exposure to Chinese exports.
Fields of Study & Subjects
Global trade and economics
Economic Growth and Productivity
Economic and Technological Innovation
Publication details
- Journal / source
- International Economic Review
- Publisher
- Wiley
- Volume
- 67
- Issue
- 4
- Pages
- 1137-1157
- Publication date
- 29 March 2026
- Language
- EN