Decomposing China's export growth into extensive margin, export quality and quantity effects

- We decompose export growth into extensive margin, export quality and quantity.
- China's export growth depends less and less on quantity expansion.
- China's export price is in the process of improving, but at a declining speed.
- China had a strategy of lowering price and promoting sales in 2009.
- China resumed price and increased sales moderately in 2010.

This paper decomposes the growth of China's export into three parts: growth in extensive margin, increased quantity and increased prices; we perform a series of empirical analyses using China's export data at the HS-6 digit level to analyze the characteristics of China's export growth. China's export growth depends more and more on price increases, less and less on quantity expansion. Compared with the rest of world, China's export price is in the process of improving, not at an increasing speed but at a declining pace. China's export performance is better than the rest of the world after the financial crisis and in 2008-2010. This reflects a strategy of lowering price and promoting sales in 2009 when facing a slump in export markets; and resuming price increases and increasing sales moderately in reaction to improving export conditions in 2010.