This article is interesting. It looks at how much of exports from China is made from imported intermediate goods and how much from domestically generated intermediate goods. The authors estimate that about 50% of China's export contains domestic content-- much lower than most other countries.
Why is it useful to dissect export data in this way? Well, it is important to analyze export statistics this way because it gives clearer picture while designing policies, especially to determine the effect of exchange rate fluctuations on domestic exports and on GDP growth. Cēterīs paribus, a given exchange rate appreciation would have a smaller effect on trade volume, the lower the share of domestic content in the exports.
We also estimated that the share of foreign value added in normal exports is way lower (between 5-11%) than in processing exports (between 74-82%). There are also interesting variations across sectors and firm ownership. Those sectors that are likely labelled as relatively sophisticated such as computers, telecommunication equipments, and electronic devices have particularly high foreign content (about 80%). Moreover, foreign-invested firms also tend to have higher foreign content in their exports than do Chinese domestic firms
Here is the conclusion:
Our best estimate suggests that the share of domestic content in China’s exports is about 50%, which is much lower than most other countries. This implies that a given exchange rate appreciation is likely to have a smaller effect on China’s trade surplus than for other countries. The domestic content share is particularly low in sectors that are likely to be labelled as sophisticated, such as electronic devices and telecommunication equipments. This means the competitive pressure China’s exports place on skilled workers in high-income countries is smaller than suggested by a simple-minded look at the raw trade data.
