A Dynamic Shift-Share Analysis of the Electronics Export Market 1988-2001: Can the NIEs Compete with China?

Peter Wilson, Ting Su Chern, Tu Su Ping, Edward Robinson
JEL codes: 
Paper No. 2005/07 - May 2005

This paper uses dynamic shift-share analysis to examine the export performance of China in electronics compared to the east Asian NIEs exporting to the USA, European Union and Japan between 1988 and 2001. Our findings suggest that China has now emerged as a serious contender in the export market for electronics goods, but this position has not been a dominant one. Her main gains have been in consumer electronics and telecommunications equipment and to a lesser extent in disk-drives, printers and PCs; but in the higher-end exports of printed circuit boards and semiconductors, China has not yet gained a significant stronghold in developed country markets, at least to the extent that the growth in her overall exports and increase in market shares might suggest. Moreover, Chinas success since the early 1990s has been largely underpinned by strong export growth rather than a favourable industry mix. Nonetheless, If China can
sustain rapid growth in exports and is able consolidate its industrial base, Chinas overall competitiveness can be expected to improve substantially in the future. Its low cost structure, an increasingly skilled workforce and an influx of technology and management skills associated with large foreign direct investment inflows, together with its recent entry into the WTO, places China in a very favourable position.