Extensive margin, quantity and price in Chinaʹs export growth

We developed a methodology to decompose export growth into three margins: extensive margin, price and quantity. We then decomposed data on Chinaʹs export trade with 140 partners in 2001 and 2007 into the three margins. We arrive at the following conclusions: Chinaʹs export growth is mainly driven by quantity growth, which accounts for about 70% of overall export growth. This conclusion is robust for different partners, different industries and different techniques. To convert export quantity-driven growth into extensively margin- and quality-driven growth is a major challenge for the Chinese government and Chinaʹs enterprises in the long term.