DES Working Paper No 2: 'Changing Trade Structure and Its Implications for China'

Abstract

Based on the insight that the type of product an economy exports can have important implications for its economic performance and that goods exported predominantly by rich countries will have different characteristics from those exported by poor countries, Lall et al (2006) put forward a novel means of classifying commodities based on the income levels of a product¿s main exporters. At around the same time Hausmann et al (2006) following a similar approach put forward a slightly different form of product classification and Rodrik (2006) applied this specifically to an analysis of China. This paper highlights the difference between the approaches and its implications for the analysis of China, which appears less `special¿ using the approach of Lall et al.