Data Dive: The Private Sector Drives Growth in China’s High-Tech Exports
One clear goal of China is to be a high-tech leader, and one indicator is to be a leading exporter of high-tech products. Historically, most high-tech exports have come from foreign-invested enterprises (FIEs), both subsidiaries of multinationals as well as Chinese-foreign joint ventures. In the 2000s, such firms accounted for well over 80 percent of China’s high-tech exports. In 2011, in fact, they accounted for 84.2 percent of high-tech exports.
I’ve not looked at this data for a while, and I was curious to what extent the pattern has changed under Xi Jinping. As everyone knows, over the last decade Chinese policies have given greater support to state-owned enterprises (SOEs), giving rise to the idea of “state ahead, private back” (国进民退, guojin mintui). Private companies have only episodically received state support, and in fact, for the last year and a half there has been a massive crack down on private Internet services firms.
So the Trustee Chair team went to find more recent data on the ownership composition of high-tech exports. We discovered that since 2018, there is no detailed data on total high-tech exports but only for “high-tech new product exports” (高科技新产品, gaokeji xinchanpin). Such new products accounted for about 30 percent of all high-tech exports in 2011 and over 50 percent of high-tech exports by 2020 (Figure 1). So, although not everything, the data on this sub-class of high-tech goods gives a view into overall trends. One other challenge of the data: we could not find data for the year 2017, for which at the moment we have no explanation.
Figure 1: New High-Tech Products as Percentage of Total High-Tech Exports
What did we find? We notice five big takeaways from the data (a summary table is in the attached data file).
1) High-tech exports from China have continued to grow at a rapid rate, with no drop-off because of the trade war. If the goal of the Trump administration was to shine a spotlight on the dangers of MC2025 and slow China’s high-tech exports, that effort failed miserably.
Figure 2: China High-Tech Exports (USD Billions)
2) Although China’s high-tech exports have grown a lot, the rest of China’s exports have kept pace; and so high-tech exports’ share of the total has remained steady, at under 30 percent of China’s total merchandise exports.
Figure 3: High-Tech Products as Percentage of Total Goods Exports
3) The biggest source of growth comes from domestic private firms, who are now the single largest source for high-tech exports. Their exports of new goods grew in absolute terms over the last decade from $23.8 billion in 2011 to $161.4 billion in 2020, going from 14.9 percent to 41.3 percent of exports. Their share surpassed that of firms from HK/M/T firms in 2018, who by 2020 accounted for 33.7 percent.
Figure 4: High-Tech New Product Exports by Registration Status (USD Billions)
Figure 5: Share of High-Tech New Product Exports by Domestic Private Firms and HK/M/T Firms (%)
4) The biggest drop comes from foreign-invested firms excluding those from Hong Kong/Macao/Taiwan, who fell from 70.5 percent of high-tech exports in 2011 to 25.0 percent in 2020.
Figure 6: Share of High-Tech New Product Exports by Foreign-invested Enterprises (%)
5) State-owned enterprises are a non-entity in China’s high-tech exports story. Despite contributing around 30 percent of China’s GDP, they only contributed about 8 percent of China’s total exports and a measly 0.06 percent ($250 million) of China’s total high-tech new product exports in 2020.
Figure 7: Share of High-Tech New Product Exports by State-owned Enterprises (%)
In the first quarter, China’s economy showed very sluggish growth. One of the only bright spots was exports, which grew 12.9 percent in Q1 over a year ago. China’s chances of genuinely achieving 5.5 percent real GDP growth this year are quite small, but if policymakers want to genuinely support growth, supporting the firms that drive exports — private enterprises — would be the place to start.
Related Trustee Chair Activity
Blog Post: The Trustee Chair Team, “Two Years In, How Does the STAR Market Measure Up?” CSIS, January 24, 2022.
Report: Scott Kennedy and Jude Blanchette (ed.s), Chinese State Capitalism, CSIS, October 7, 2021.
Blog Post: Scott Kennedy, “Congress on China: Then and Now,” CSIS, June 22, 2021.
Commentary: Scott Kennedy and Daniel Rosen, “Market Metrics: A Fact-Based Approach to the Chinese Economic Challenge,” CSIS, October 10, 2019.
Blog Post: Kevin Acker and Qiu Mingda, “STAR Performers: High-Tech, Coastal, um, State-Owned and Military-Focused?” CSIS, August 12, 2019.
Report: Scott Kennedy, The Fat Tech Dragon: Benchmarking China’s Innovation Drive, CSIS, August 2017.