Domestic Value Added in China’s Exports to the World and Its Partners

This article uses the inter-country input-output tables with heterogeneous firms compiled by OECD (2015 OECD. (2015). Trade in value added (TiVA, 2015) indicators-definitions. OECD statistics website: http://stats.oecd.org/Index.aspx?DataSetCode=TIVA2015_C1. [Google Scholar]) to measure the ratio of domestic value added content in China’s exports (RDVAE) to the world and its major trading partners at the aggregate and sector level, respectively. Our empirical results indicate the following. (1) China’s RDVAE adjusted for processing trade is much lower than that computed without adjusting for processing trade; (2) The manufacture’s RDVAE for China to its major trading partners is typically lower than that for China’s major trading partners to China; and (3) The share of domestic value added generated by China’s exporting sector itself is declining, whereas that coming from the exporting sector’s upstream domestic suppliers is growing.