Measuring the Impact of China's Export Growth on Its Asian Neighbours

Book excerpt: The rise of China as an economic power has led to concern in many Asian counties that this development poses a threat to their ability to export. The empirical support for this remains inconsistent, however. One explanation for these inconsistencies includes biases that follow from the use of a gravity model specified in an a-theoretical manner. We study the effect of the Chinese exports growth using the empirical framework outlined by Baldwin and Taglioni (2006). We report evidence of a positive relationship between Chinese and its Asian neighbours' exports, with countries with greater endowments of human capital benefiting most from this growth.