The European Journal of Comparative Economics

ISSN: 1824-2979

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EJCE Year: 2005, December. Volume: 2 - Issue: 2

China in the international fragmentation of production: Evidence from the ICT industry

by Alessia Amighini

Start page: 203 - End page: 219

Keywords: China; Fragmentation; Industrial Upgrading; Information and Communication Technology

Jel code: F02; F14; L63; N60

DOI:

Abstract:

This paper investigates the position of China in the international fragmentation of production in the ICT industry, the most dynamic and globally dispersed sector in the world economy. The evidence shows that during the 1990s China dramatically increased its market shares in ICT products and now ranks among the top three world exporters. Moreover, China has upgraded from mere assembly of imported inputs to the manufacturing of high-tech intermediate goods. As a result, import dependence has declined and the domestic value added of exports has increased. This supports the hypothesis that industrial upgrading occurred in some tradable sectors through technological learning associated with processing trade. Therefore, a pattern of specialization initially dominated by processing trade could be favourable to a country's long-term development, to the extent that entering at the lower end of high-tech sectors is promotive of catching up in more sophisticated technology-intensive production

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