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An Inquiry into the Determinants of the Exports of China and India
Author(s) -
Eckaus Richard S.
Publication year - 2008
Publication title -
china and world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.815
H-Index - 28
eISSN - 1749-124X
pISSN - 1671-2234
DOI - 10.1111/j.1749-124x.2008.00126.x
Subject(s) - renminbi , china , economics , devaluation , value (mathematics) , international economics , monetary economics , exchange rate , machine learning , law , political science , computer science
Regression analysis is used to tease out the relative significance of influences on the supply and demand for the exports of China and India. On the supply side, the value‐added tax in China has discouraged export supply. The elimination of the rebate on those taxes will discourage exports. Higher wages discourage exports, but the share of exports by foreign invested enterprise is a positive influence, as is a higher share of value added in output and greater experience in exporting. On the demand side, exports depend in part on aggregate income levels in importing countries. Relative wages have been more important than exchange rates in determining the demands for Chinese and Indian exports. This evidence does not support the pressures for a devaluation of the RMB. There is also evidence of the positive significance of the accustomization of purchasers to buying Chinese exports.