China’s exports are only slightly affected by exchange rates

China’s export value and sophistication have experienced significant growth since the 1990s, particularly in the electronics and machinery sectors. It’s important to note that exchange rates can have varying effects on exports.

China’s Explosive Export Growth

China’s export value has surged from US$224 billion in 1995 to US$3.7 trillion in 2021, with textiles declining from 30 per cent to 13 per cent, and electronics and machinery increasing to 26 per cent and 19 per cent, respectively. During the pandemic, China’s proficiency in producing sophisticated products intensified, seen in the leap in exports of serums and vaccines from less than US$1 billion in 2019 to over US$25 billion in 2021.

China’s Product Complexity and Exchange Rates

Researchers have determined that increased product sophistication results in less export vulnerability to exchange rate fluctuations. Joining…