Analysis Of The Dynamic Evolution And Growth Effect Of China’s Product Export Diversification

China’s economy and the scale of trade has grown rapidly since the reform and opening-up. At the same time of taking part in international division of labour and deepening the specialization level of production and export according to the theory of comparative advantage, China is also explorig new opportunities for further development in this longer global value chain to promote the technology level of export, expand the variety of export products and distribute the rate of different products reasonably, so as to promote the export diversification level both horizontally and vertically.This paper describes the develop process of China’s product export diversification level from1987to2011as well as compare it with other countries. We analyze this problem from the aspects of the number of export varieties, export rates of major products and the diversification indexes of export products. In the aspect of diversification indexes, we choose the Herfindahl index, Absolute Theil entrophy index, Dissimilarity index and Relative Theil entrophy index to analyze. It shows that China’s export diversification level rose at first and then declined. After upgrading the export structure from primary products to manufactured products, which represents the vertical diversification, the diversification level of manufactured products dropped and it tended to concentrate on exporting a few kinds of products, which made the export distribution among different sections unbalanced. Although the situation has been improved in recently years, it still needs further observation. When comparing China’s export diversification index with other countries, we find that developed countries’export is more diversified than developing countries and the gap between different developed countries is smaller than the gap between different developing countries. China enjoys a higher level of export diversification than other developing countries, which is closer to developed countries.In the empirical part of this paper, we build dynamic panel data models and use SYS-GMM method to examine the development trend of export diversification with economic development and its impact on economic development. It shows that the product export sturcture of countries tends to be more concentrated and less diversified with the development of GDP per capita, and this trend is more obvious in developing countries and even more obvious in China. This trend has different impact on economic growth in different kinds of countries. Export diversification, both horizontal and vertical, instead of concentration is more favored for economic growth in China, while export concentration promotes economic growth in other developing countries and developed countries. However, the promotion effect of export concentration is larger in developed countries. As a result, China must try it effort to develop export horizontal and vertical diversification level so as to get persistent and stable growth. Some suggestions are made in the last according to the former analysis.