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This study examines the impact of changes in the Chinese exchange rate on Korean exports considering the characteristics of products exported. We use import data from OECD countries from 2002 to 2014 and find that Korea’s exports of products having a greater competition further decline as renminbi depreciates. On the other hand, Korean exports of products having a greater complementarity degree with Chinese are more likely to increase as renminbi depreciates. In addition, the degree of negative impacts become smaller once Korean export products have a relatively higher quality than those of China.

Impact of Chinese Renminbi on Korean Exports: Does Quality Matter?