China's Exports Complexity Study

This paper analyzes the connections between exports and GDP, however, by product level. As researches in exports by product level have developed, we introduce ESI index model and EXPY index model here. This paper analyzes the differences between ESI index model and EXPY index model. While the former emphasizes the time series of data, and offers a view of a long period, the latter compares the constructions of exports from different countries, and offers a direction result. This paper uses the two models to analyze the exports of China, from industries level to product level, with EU and OECD. Besides we develop the two models, and create a new YEXP model, to give a better view of the connections between exports and GDP. From cost discovery by Rodrik(2003), we introduce the competitive advantage of nation by Porter, which enlarges the effects of connections between exports and GDP. Finally, we encourage policies that upgrade the structure of exports by product level, as the higher is the structure of exports by product level, the more quickly the economy grows. We use qualitative analysis, quantitative analysis, theoretical analysis, experiment analysis, data's illustration, graph's analysis, comparative analysis, etc.It seems hard to understand the conclusion from the analysis based on ESI index model and EXPY index model, that China should export products in high sophistication to develop in high rate. While China is labor abundant, relatively poor in capital and skill, China should export products in low sophistication, according to endowment based comparative advantage. This paper compares China to other mainly developed countries in export sophistication. In ESI index model, we find that China's ESI index with EU, grows year after year, and positively relates to per capita GDP. Still we find that ESI index is not proper in recent years, as China's ESI index with EU grows too big to reveal the exact export sophistication. Thus we introduce EXPY index model to compare China to OECD, and get the conclusion that China's EXPY index with OECD grows quickly and offers high export sophistication. We develop EXPY index model by using GDP instead of per capital GDP, and get a better result, which means that it is better to look China as a whole, per capital GDP contains both GDP and people effects. Based on ESI index model and EXPY index model, we create a new YEXP model, to strengthen the connections between exports and GDP, and examine direct evidence that the new model is better to reveal relation between export and GDP.