Financial Crisis And China’s Export Analysis

In 2009, China had exceeded Germany and became the largest export trader. The variation of China exports influences both domestic and global economy rapidly. After the 2008 financial crisis broke out, the world GDP slowed down quickly, in the mean while, the world trade value fell in a much larger extent than the world GDP, the price of world trade commodities also dropped dramatically. The reasons for China’s exports explosion in the latest 20 years are China’s cheap labor costs and the chance for taking in global production transition. During the financial crisis, China’s exports was also shocked deeply, but compared with USA, Japan, European Union and other developed areas, the extent of export slump was much better. This paper analysis the reasons, which assume commodity quality and intra-product trade, that influence China’s exports during the financial crisis. The explained variable data are China’s exports to USA, Japan and EU by industry and commodity during 2005-2011. The explaining variables including commodity quality (measured as unit value), vertical specialization index (calculated by input-output table, direct consumption coefficient and import export value), foreign-owned enterprises output, industrial output. The data are both in commodity level and industry level for panel data test. STATA for panel data model test results show that all the explaining variables have distinct relations with corresponding exports, excluding the unit value in industrial level for Japan. In the end, some advices for policy are revealed.