“Many Chinas” : Provincial Foundations of Chinese Export Performance

Overview & Synopsis

China’s export performance is characterized by two striking features: a steady rise in export sophistication and the continued prominence of less sophisticated products. This paper proposes the “Many Chinas” hypothesis, that China’s provinces differ in their comparative advantage and in how this comparative advantage has evolved over time. Using detailed Chinese customs export data from 1995 to 2023, this paper investigates the provincial underpinnings of China’s export performance. Three main findings emerge. First, export similarity between Chinese provinces and the advanced economies increased over time, initially more rapidly in the eastern provinces. Second, despite this increased export similarity with the advanced countries, there remained significant heterogeneity across provinces in 2023. In their export structure, provinces such as Shanghai and Jiangsu resemble most closely the Republic of Korea while Guangdong and Shanxi resemble Viet Nam and the Philippines, respectively. Third, this paper identifies a novel pattern: during the first decade after China’s World Trade Organization accession in 2001, the export sophistication of the country’s eastern provinces increased much faster than that of other provinces, but since about 2010, there has been remarkable convergence in sophistication across all provinces.