Do High-technology Exports Cause More Technology Spillover in China?

The volume of China's high-technology exports has grown sharply since the implementation of its export promotion strategy Revitalizing Trade through Science and Technology in 1999. This paper investigates whether technology spillover effects are greater for high-technology exports than for primary manufactured goods exports. We present a generalized multi-sector spillover model to identify both between-spillover effects from exports towards non-exporters and within-spillover effects among export sectors. Using panel data for 31 provinces in China over the period from 1998 to 2005, we find that although high-technology export sectors have higher productivity compared with other sectors, this productivity advantage does not lead to technology spillover to both domestic sectors and other export sectors, and export technology spillover mainly derives from traditional export sectors rather than high-technology export sectors. As such findings can be largely attributed to the fact that China's high-technology exports depend significantly on processing trade by foreign-invested firms, policy implications are discussed in relation to how to best promote the role of China's high-technology exports during economic expansion.