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Measuring Vertical Specialization: the Case of China
Review of International Economics (2011)
  • Judith M Dean, Brandeis University
  • K C Fung, UC Santa Cruz
  • Zhi Wang, US International Trade Commission

The explosive growth of Chinese trade may be due to international production fragmentation, but few have assessed these phenomena together, in part, because it is difficult to measure the vertical specialization (VS) of China’s trade. Unique features of China’s processing trade cause both identification of imported inputs and their allocation across sectors to vary by trade regime.This paper estimates theVS of Chinese merchandise exports, addressing these two challenges.A new method to identify Chinese imported inputs is developed, and used to calculate VS by sector and destination.VS estimates based on the official Chinese input–output table are contrasted with those based on a split table, capturing processing and normal exports separately. Last, the paper tests whether Chinese “export sophistication” can be explained by VS.

Publication Date
August, 2011
Citation Information
Judith M. Dean, K C. Fung, and Zhi Wang. "Measuring Vertical Specialization: the Case of China" Review of International Economics 19.4 (2011): 609-625.