Lionel Fontagné & Rodrigo Paillacar
"China is Shipping more Products to the United States than Germany "
La Lettre du CEPII N°270, September 2007, CEPII.
Recent theoretical and empirical literature on international trade has renewed our understanding of specialisation and competition, especially between developed and emerging economies. Specialisation operates at the level of varieties instead of product or sector-level. Furthermore, competition selects the most productive firms and the best performing of their products. Using this dual approach, we investigated the market for manufactured imports in the United States. The emerging countries are winning large market shares there, particularly for the most technological products. It is especially in this field that some of them are managing to combine an increase in market share with a higher value of the products exported. How can older industrialised countries face up to this competition? The comparison between two export champions, China and Germany, illustrates how market positioning and the selection effect operate in the US market.