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As a global manufacturing leader and an emerging digital economy power, China faces increasingly complex challenges from cross-border data flow restrictions imposed by its export destination countries. This study uses panel data spanning 2005–2022 and adopts a two-way fixed-effects model to examine the impact of these restrictions on the quality of China’s manufacturing exports. The findings indicate a significant adverse effect: a one standard deviation increase in the destination country’s restriction index is associated with a 0.018 standard deviation decline in export quality (p < 0.01). The mechanism analysis reveals that this effect primarily manifests through increased trade costs and reduced imports of intermediate goods. Furthermore, disparities in internet infrastructure and governance capabilities between China and its trading partners exacerbate these adverse effects, whereas participation in international policy agreements (e.g. digital trade frameworks) can alleviate them. Heterogeneity analysis indicates that the adverse impacts are more pronounced for indirect and high-level restrictions, especially in low- and middle-income countries and economies with low import dependence on China. High-tech manufacturing sectors are particularly vulnerable. These findings provide crucial insights for Chinese enterprises to strategically navigate market selection, mitigate risks, and promote high-quality export development amid global data governance challenges.
Sun et al. (Tue,) studied this question.