2.Structural Changes Measured by Export

2.1 Measurement and Data

The sight of structural changes is revealed at two levels.At national level, we measure specialization by dividing export of sector i（Xi）by china's total export（Xt）in eq.（1）.At international level, we measure specialization by dividing export of sector i（Xi）by world trade of this sector（Wi）in eq.（2）.In addition, we divide trade balance（X i-Mi）by world trade（W i）for showing commercial performance [eq.（3）].

All the data in this section derive from CEPII dataset CHELEM-CIN during 19702009.The sectors are unified according to CHELEM classification.

2.2 Structural Changes

By stage of production

In Fig.1, at national level, the blue line shows that all the manufacturing sectors no matter in which stage of production increased their export share from mid 1980s.Recently, intermediate and capital products rose above half of Chinese export.The rest of manufacturing goods, including primary and consumption goods, fell from 60% to 42% of Chinese export over 1995-2009.China was more and more specialized in the middle position of production chain.At international level, Chinese export of manufacturing continued going up to 14% of world trade.A significant jump occurred in 2000s for manufacturing sectors, concretely for intermediate and capital products.On contrary, speed of rise of final goods has slowed down since 1995 compared with previous decade.It is logical that when China decided to reduce degree of specialization in final products, its growth of world market share was little hit.

By technological level and sector

Fig.2 shows export share of Chinese total export, i.e.specialization degree at national level.China was closed and the export structure did not change before 1985.After that year, the sophisticated sectors represented by the blue and the red line stated to sprout.The low qualified sectors still dominated Chinese export.From 1994 to 2004, we could see a clear technology scissors difference composed of blue and violet lines.During this time, export share of low-tech diminished while that of high-tech products increased to about 1/3.In 2002, high-tech products（blue line）exceeded low-tech goods and dominated Chinese export.Nevertheless, its progression braked from 2004, even dropped.An interesting thing is after subprime crisis in 2008, its export was straightened.

Figure 1 specialization by stage of production

Source:CHELEM-CIN, author's own calculation.

Figure 2 specialization inside China by technological level

Source:CHELEM-CIN, author's own calculation.

Fig.3 illustrates three branches at low-tech and medium low-tech level.Textile is traditional sector at low-tech level, including consumption goods（majority）and intermediate goods（minority like needle and knit）.From 1995, China decided to lessen this sectors’export share, its performance in world market was simultaneously attacked.Textile's market share in world trade braked from 1995, yet it straightened from 2000 and recently it still represented 1/3 of world trade.This traditional sector remained competitive relative to other countries.Branch of mechanical is medium-low qualified, containing intermediate and capital goods.Its export share at both national and international level increased at the same time.In 2009, mechanical occupied 11% of Chinese export.Other manufacturing branches, like wood paper, chemical, steel and non-ferrous, belong to low and mediumlow tech.They are always the products based on natural resource.Fig.3 shows them as a wave.Also from 1995, its specialization degree went down, until 2002, recovered.

Figure 3 specialization by sector at low-tech and medium low-tech level

Source:CHELEM-CIN, author's own calculation.

Fig.4 illustrates three sectors at high-tech and medium high-tech level.Vehicular sector（medium high-tech）contains intermediate and capital goods.Although it represents a small part of export, it continued progressing.Electric is medium-high qualified branch. The sectors such as appliances, electrical equipment and supplies, have decreased the export share since 2000.Electronics'export share also declined from 2004, even though it occupied nearly 30% of Chinese export.

In summary, china succeeded in structural reform over the decade of 1994-2004 with a clear technology scissors difference.The structure of export shifted from low skilled sectors to high skilled sectors until 2004, when sophisticated sectors'export share stopped growing, even decreased, such as electric and electronics.Recently, China was more and more specialized in medium low qualified branches, such as mechanical, wood paper, steel…which are based on national resource.In next section, we will discuss the source of structural transformation over 1994-2004 and what has happened afterward.Because the data for 1994 were not available, we change the period to 1995-2005 then extend it to 2007.

Figure 4 specialization by sector at high-tech and medium high-tech level

Source:CHELEM-CIN, author's own calculation.