Sophistication Of China’s Exports Based On A Comparative Study Of Local Enterprises And Foreign-funded Enterprises

Up to now, Many scholars made a research on the sophistication of China’s exports and most of them drew the same conclusion that China exports high-tech products. But China’s exports is mainly driven by the processing trade or FDI, as a result of which will inevitably lead to great differences in the technical level between local enterprises and foreign-funded enterprises. Previous research on the Sophistication of China’s exports can’t reflect truly the competitiveness and export structure of products in different technology level between the local enterprises and foreign-funded enterprises. So, in order to show the China’s export structure better, this paper tries to do research on the Sophistication of local enterprises’s exports and foreign-funded enterprises’s exports so as to optimize China’s export structure.Based on the research of Lall (2000), Balassa (1965), Gang Fan(2006), the statistical data of China and HS code, because it is difficult to get enough dates, we firstly just make a comparative study on the export structure and revealed comparative advantage index of both local and foreign-funded enterprises using dates from2000to2006. Studies show that local enterprises mainly export low-tech products and have a strong competitive advantage in them. But it has no a significant optimization in the export structure of Local enterprises. While, foreign-funded enterprises mainly export low-tech products and high-tech products, Meanwhile they have a relatively strongcompetitive advantage in them. There has a significant optimization in the export structure of foreign-funded enterprises. Secondly, this paper studies the difference of the sophistication of between local enterprises and foreign-funded enterprises. It shows that the sophistication of foreign-funded enterprises is higher than local enterprises and the both show an upward trend. But the local enterprises have a lower amplification than foreign-funded enterprises, and the gap between the two are expanding. More furtherly, the paper analyzes the sophistication of eastern, central, western in China. It shows that owing to the contribution of the processing trade,the eastern is the highest in the sophistication of its exports. The central is higher than the western which is the lowest.The paper analyses the factors which makes an affect on the sophistication of the China’s exports both in theory and in the empirical test. The studies show that the factors which includes the per capita physical capital, human capital, R&D investment, infrastructure, import trade, FDI and financial development, have a positive correlation with the Sophistication of China’s exports. And financial development can solve the problem of adverse selection to promote the development of the Sophistication. But natural resources have a Negative correlation with the Sophistication of China’s exports, Which shows there is phenomenon of the "resource curse". But the system of good quality can weaken the level of "resource curse". At last, suggestions are put forward on the basis of all.