Reference no: EM131736622

Assignment: How Dependent on Exports is China's Economy

You need to read He Dong and Zhang Wenlang, "How Dependent Is the Chinese Economy on Exports and in What Sense Has Its Growth Been Export-Led?" Journal of Asian Economics 21, 1 (2010): 87-104, which I posted on OWL. You can skip section 2 - strategies and policies.Please summarize and answer the questions in your own words instead of copying the exact words from the paper, otherwise you may lose points.

1. Choose one of the following to fill in the blank cells of the table
a. 5%
b. 10%
c. 20%
d. 30%
e. more than 30%

Year	Ratio of China's exports to GDP (approximately)
Maoist era (1950s to late 1970s)
In 2000
In 2005-2007

2. He and Zhang argue that the ratio of exports to GDP is not a good measure of the importance of exports to an economy or of export dependency. Why? (Your answer should fit on the lines provided)

3. Which measure do He and Zhang think is a better measure for "export dependency"? How do they calculate that? (Your answer should fit on the lines provided)

4. He and Zhang mention that in estimating value-added exports, export-processing sectors of the economy should be treated separately from other sectors of the economy. Why?(Your answer should fit on the lines provided)

5. He and Zhang mention that exports can promote GDP growth from a demand perspective. Briefly summarize the mechanism of that. In addition, do they find any evidence in China that exports promoted GDP growth through this demand mechanism? Briefly summarize their findings and conclusion from the data. (Hint: you do not need to understand the methodology-skim over those parts of the paper. Note that the term "Granger cause" or "Granger causality" simply means that one thing led the other: X Granger causes Y if the change in X occurs before and therefore leads the change in Y. Your answer should fit on the lines provided)

6. He and Zhang also discuss that exports can promote GDP growth from a supply perspective. Briefly summarize the mechanism of that. In addition, do they find any evidence in China that exports promoted GDP growth through this supply mechanism? Briefly summarize their findings and conclusion from the data. (Hint: you need to discuss coastal and inland areas separately. Your answer should fit on the lines provided)

7. According to the findings of this paper, is China's economy export dependent? You may need to briefly summarize the relevant statistics and compare to other countries discussed in this paper when answering this question. (Your answer should fit on the lines provided)