Shortand long-term drivers of China’s high-tech export leadership: empirical analysis

It is widely acknowledged that the People’s Republic of China has emerged as a major player in the global arena of high-­technology product exports. In the preceding 15-year period, high-­tech exports have exhibited an average annual growth rate of 6%, though this trend is stochastic in nature. Consequently, the growth rate is not consistent but is acutely responsive to external shocks. The Granger causality test and the Engle — Granger cointegration test are utilised to identify the long-­run effects of the variables under consideration. The Error Correction Model (ECM) is employed to estimate the long-­run and short-­run response to changes in the main drivers. The results demonstrate that despite changes in economic policy and the launch of the Made in China 2025 programme a decade ago, the primary long-­term driver of export growth remains foreign capital. While expenditures on research and development (RD) have shown a tendency to positively influence high-­tech exports in the short term, international investment, particularly in the form of foreign direct investment, has a more significant long-­term impact on high-­tech exports from China. In the short term, a decline in net foreign direct investment inflows is likely to be balanced by an increase in RD. Nevertheless, in the long term, the impact of accumulated international investment proves to be considerably more significant. New Chinese policy priorities are expected to shift the main driver of high-­tech export growth from foreign capital to domestic RD.