In this discussion report, we dispel the widely held misconception that China's economy is excessively export-dependent and therefore particularly vulnerable to a drop in export demand. In the past two decades, China's dramatic exports rise has largely been driven by the fact that many foreign firms have offshored a slice of their value chain labor-intensive final assembly to China for export purposes. Many of these assembly plants heavily rely on imported inputs from East Asian economies to produce their export products. Because of this feature, China passes on a large portion of its negative export demand shocks to the East Asian economies by reducing demand for their imported inputs. Using recent trade data, we provide evidence of this business cycle pass-through during the current economic crisis.
2017MO-01MO Le Québec économique 6 : Le défi des infrastructures Marcelin Joanis, Andrés Ardila, Josée Beaudoin, Laurent-David Beaulieu, Dorothée Boccanfuso, Bernard Boire, Stéphanie Boulenger, Jean-Philippe Charron, Jean-Claude Cloutier, Bernard Dafflon, Nathalie de Marcellis-Warin, Clélia Desmettre, Kodjovi M. Eklou, Étienne Farvaque, Mario Fortin, Richard Gagné, Roger Galipeau, Stéphanie Lapierre, Geneviève Lefebvre, Jean-Philippe Meloche, Mathieu Paquet, Ingrid Peignier, Serge Pourreaux, Diane Riopel, Luc Savard, Alexandre Skerlj et François Vaillancourt Voir le document