China’s growing role in global production boosted by strong competitiveness – evidence from international input-output tables

Abstract

We examine the role of China in world production and its development by utilizing the international input-output tables of the WIOD database that has been recently updated to cover years 2000–2014. We concentrate on the value added created in China and trace the evolution of China’s share in world production and exports. We also examine the specialization of China’s production and export structure and try to evaluate its significance for China’s performance through constant market share analysis. We find that China has gained shares hugely both in global production and exports, although the pace has slowed down in recent years. The share gains have been supported by its rapidly growing domestic market as well as strong global competitiveness. China’s production and export structure have shifted to more high-technology sectors both in manufacturing and services, but these sectors still represent much smaller share in Chinese economy compared to developed economies.