Why Are Chinese Exports Not So Special?

Applying a commonly used index for export sophistication in a cross-country study,Rodrikfinds that the technological content of Chinese exports over the past decade has been so highthat it cannot be explained simply by the economic fundamentals of a low-income countryabundant with unskilled labor.Question has been raised for the empirical robustness of theindex.I am also doubtful with Rodrik’s analysis but develop my argument from a differentperspective.This paper briefly reviews Rodrik’s methodology and identifies other factorshis empirical results potentially hinge on.Based on this,it elaborates on China’s uniqueprocessing trade regime,the uneven distribution of its exports across Chinese regions andthe limitation of HS codes in terms of identifying differentiated products,in an attempt toshow that these factors also contribute to higher estimations of China’s export sophisticationlevel.Finally,it organizes trade data to reveal the trade patterns that are indeed consistentwith the country’s comparative advantage.