China s Ascent in World Trade and Associated Shift in Its Trade Structure

The rapid expansion of China s trade surplus since the mid-eighties and picking up until the onset of 2008-09 global financial crisis has been a key development in the world economy. While growing trade surplus of China has been viewed with cynicism borne out of an undervalued Yuan and for having being a member of WTO since 2001, many others argue that China s trade surplus reflect changes in China s economic and trade structure and associated shifts in its role within regional and global production chains. We address this issue by analyzing: (i) China s growing and changing trade structure as well as changing structure of trade surplus with the rest of the world, USA, Europe, Japan and rest of Asia, (ii) China s revealed comparative advantage (RCA) with the rest of the world, and (iii) how China s trade policies resulted into a shift in China s trade structure. We find that, not only China has made significant inroads in the world trade since its admission to WTO, but also there has been a noticeable shift in China s trade structure with specialization in high-end technology industries wherein China s exports aided by a well calibrated FDI policy.