No. 2007-01-A

OFFICE OF ECONOMICS WORKING PAPER

U.S. INTERNATIONAL TRADE COMMISSION

Judith M. Dean 

U.S. International Trade Commission 

K.C. Fung 

U.C. Santa Cruz and U.S. International Trade Commission 

Zhi Wang 

U.S. International Trade Commission 

January 2007 

The authors are with the Office of Economics of the U.S. International Trade 

Commission. Office of Economics working papers are the result of the ongoing 

professional research of USITC Staff and are solely meant to represent the 

opinions and professional research of individual authors. These papers are not 

meant to represent in any way the views of the U.S. International Trade 

Commission or any of its individual Commissioners. Working papers are 

circulated to promote the active exchange of ideas between USITC Staff and 

recognized experts outside the USITC, and to promote professional 

development of Office staff by encouraging outside professional critique of 

staff research. 

Address correspondence to: 

Office of Economics 

U.S. International Trade Commission 

Washington, DC 20436 USA 

Measuring the Vertical Specialization in Chinese Trade
Measuring the Vertical Specialization in Chinese Trade

Judith Dean*

US International Trade Commission

K.C. Fung*

UC Santa Cruz and US International Trade Commission

Zhi Wang*

US International Trade Commission

January 2007

*We are grateful for helpful suggestions from Michael Ferrantino, Bill Powers, Will Martin, Alex Hammer, the participants 

in the USITC Research Division Seminar, and the participants in the Conference on China’s Integration in the World 

Economy, National Bureau of Statistics, Beijing, China (October 2006). The v iews expressed in this paper are those of the 

authors alone. They do not necessarily reflect the views of the US International Trade Commission, or any of its individual 

Commissioners.
2

Measuring the Vertical Specialization in Chinese Trade

Judith Dean*

US International Trade Commission

Judith.Dean@usitc.gov

K.C. Fung* 

UC Santa Cruz and US International Trade Commission

kcfung@ucsc.edu

Zhi Wang*

US International Trade Commission

Zhi.Wang@usitc.gov

January 2007

Abstract

In recent years, two important related developments have transformed the nature of world trade: the 

explosive growth of Chinese trade, and the growth of vertically specialized trade due to international production 

fragmentation. The literature in each of these two separate topics is large and growing. However, very few 

papers quantitatively assess these two trends together. In this paper, we measure the degree to which Chinese 

trade has become vertically specialized, using a new measure adapted from Hummels, Ishii and Yi (2001). By 

making use of the latest Chinese input-output tables, and a new detailed Chinese trade dataset which distinguishes 

processing trade from other forms of trade, we develop a new method of identifying intermediate goods imported 

into China. With this new method, we measure Chinese vertical specialization over time, and by sector, export 

destination, and input source. We find about 35 percent of the value of China’s exports to the world is 

attributable to imported inputs. This vertical specialization exceeds 50% in some sectors, and is growing over 

time. 

JEL Codes: F10, F14 

Key Words: China, fragmentation, vertical specialization, trade growth
1. Introduction

In recent years, two interrelated important phenomena have occurred that transform the 

fundamental nature of global trade. The first phenomenon is the international fragmentation of 

production, where production processes are sliced thinner and thinner into many stages, and the 

resulting production fragments are carried out in different locations. The production of a finished 

product thus involves the participation of many economies, with countries specializ ing in different 

fragments of the vertical production chain. International trade is then increasingly dominated by trade 

in parts and components—fragments. While the international division of labor in the global economy 

is nothing new, the vast scope and the intricate nature of this pattern of global production sharing 

seems genuinely unprecedented. 

The second phenomenon is the explosive growth of Chinese trade, and China’s increasing 

importance in the global production chain. In current dollars, the value of China’s exports plus 

imports rose from $280.9 billion in 1995 to $1422.1 billion in 2005--a growth of about 311%. 

China’s policy regime of processing trade provides incentives for the import of intermediate goods, 

which are then transformed into finished goods for export. In 2005, processing trade accounted for 

42 percent of China’s imports from the world, and 55 percent of China’s exports to the world. A 

similarly large proportion of China’s imports from the U.S. (23 percent) and exports to the US (65 

percent) were processing trade. This trade is concentrated in relatively high-tech products, and is 

carried out largely by foreign firms. 

China’s prominence in trade has raised numerous questions. How is it that China’s trade can 

grow so rapidly? Has China’s comparative advantage shifted to production of high-tech goods? 

How does this rapid growth and new composition of trade affect China’s gains from trade? 

Increasingly, it appears that the answers to these questions may be found by studying the impact of 

international production fragmentation on China’s trade. Because the splitting of the production 

process leads to products crossing borders many more times than in ordinary trade, production 

fragmentation across borders could account for rapid growth in trade (Yi, 2003). While China’s final 
2

good exports may appear far more high-tech than traditional comparative advantage would predict

(Rodrik, 2006; Schott, 2006), fragmentation theory suggests that the fragments which make up the 

production chain are likely to be allocated across countries in a way that reflects traditional

comparative advantage (Jones and Kierzkowski, 2001). Finally, the global gains from trade may be 

enlarged because international production fragmentation allows more finely defined production 

processes to be allocated across countries more efficiently (Yi, 2003).1 Unlike intra-industry trade, 

this “intra-product” trade might particularly foster the growth of trade between industrial and 

developing countries (Jones, et al., 2005).

Yet in both the academic and policy literature, the phenomena of international production 

fragmentation and China’s growth in trade have been studied quite separately. Much of the recent 

literature studying the growth of Chinese trade has focused on the role of foreign direct investment, 

trade liberalization, WTO accession, incentives, and the composition of China’s exports.

2

 Most of the 

recent literature on fragmentation has focused on developing and testing various theories of the firm’s 

decision to fragment production across borders.3 A few studies have attempted to measure the 

importance of trade in parts and components in global trade and East Asian trade, and found it to be 

large (Yeats, 2001; Ng and Yeats 2001, 2003). Athukorala and Yamashita (2006) find that parts and 

components accounted for about one-third of China’s exports in 2003, and nearly 40% of the growth 

in China’s exports between 1992 and 2003. 4 Baldwin (2006) documents the growing importance of 

China in East Asian trade in parts and components. But little work has been done exploring the 

degree to which China’s trade has become vertically specialized due to production fragmentation. 

 

1

 An individual country’s gains from trade might also be enlarged if fragmentation lowers adjustment costs to 

trade liberalization, by allowing displaced workers to find new employment in a different stage of production 

within the same sector (Deardorff, 2001; Jones and Kierzkowski, 2001). Deardorff (2005) argues that in a 

world offragmentation, the gains from trade result will likely hold. However, it is unclear if some factors of 

production like unskilled workers may or may not be hurt by fragmentation. See also Markusen (2005).

2

Some recent examples include Bhattasali, et al. (2004), Dean, Lovely and Wang (2006), Wang (2003), Schott 

(2006), Rodrik (2006), Hammer (2006), Amiti and Javorcik (2005). 

3

 Examples in the first group include Antras (2003, 2005), Antras and Helpman (2005), Grossman and Helpman 

(2004, 2005), McLaren (2000), Feenstra and Hanson (2005), and Feenstra and Spencer (2005). For an excellent 

survey of both theoretical and empirical work see Spencer (2005).

4

 See also Athukorala (2006). These studies, as well as Yeats (2001) and Ng and Yeats (2003), are confined to 

a limited number of SITC sectors where parts and components are easiliy identified.
3

This paper fills this void by measuring the vertical specialization in Chinese trade. We make 

three contributions. First, we use a new detailed Chinese trade dataset which distinguishes processing 

and ordinary imports, as well as the United Nations Broad Economic Categories (BEC) classification 

of capital, intermediate, and consumer goods, to more accurately identify Chinese imports of 

intermediate goods. Second, we combine these newly identified intermediate import data with the 

1997 and 2002 Chinese benchmark IO tables, to construct an improved version of the Hummels, Ishii 

and Yi (2001) (HIY) measure of vertical specialization. Third, we use this new measure of vertical 

specialization to quantify the foreign content in Chinese global exports and bilateral exports, from 

1996-2005, and disaggregate these results by source country and by firm type. We then quantify 

Chinese vertical specialization for 122 sectors over the same time period. 

Our approach surmounts some of the technical difficulties encountered in two recent studies 

which examine fragmentation in China’s trade. Chen, Cheng, Fung and Lau (2004) use Chinese data 

to measure the value of Chinese exports net of imported intermediate goods used for the production 

of such exports. However, their study is limited to a single year (1995) and 33 sectors. Ping (2005) 

uses Chinese data to calculate the HIY measure over time, by source country and by sector. 

However, he is only able to use one benchmark IO table (1997), which ultimately limits his results to 

40 sectors.

5

 In addition, he is unable to isolate processing imports and exports in measuring 

intermediate input use. 

Our results show that in 2002, the vertical specialization share (VS share) in Chinese trade 

with the US and with the world was 30.8 percent and 35.9 percent, respectively. That is, imported 

intermediate inputs made up 30.8 cents (35.9 cents) of every dollar’s worth of Chinese exports to the 

US (to the world) in 2002. These are significantly higher estimates of China’s VS share than in 

 

5

 The year 2000 is a non-benchmark year for the construction of the Chinese input-output table and it has only 

40 sectors. In contrast, 1997 is the year with a benchmark input-output table and it has 124 sectors. In addition, 

Ping computes his estimates of VS shares using aggregate IO data, which tends to underestimate the actual VS 

share as pointed by Yi (2003). 
4

previous studies. We also see strong evidence of the Asian network of suppliers to China studied by 

Baldwin (2006) and Athukorala (2006). Disaggregating VS share by source, we find Japan and the 

Four Dragons accounted for more than half of the value of imported inputs in China’s exports, both at 

the beginning and the end of the ten year period. However, the US and EU together accounted for an 

additional 16-17%.

Our evidence also suggests that China’s trade is becoming more vertically specialized over 

time. Between 1997 and 2002, China’s VS share increased by about 23%. China’s VS share with 

individual trading partners shows growth over time, with considerable acceleration in the VS share of 

exports to the US and to the EU. The most vertically specialized sectors in China’s trade are plastics, 

steel processing, communications equipment, industrial machinery, metal products, and electronic 

computers. In these sectors, imported intermediate goods account for between 52 percent and 76 

percent of the value of Chinese exports. Not surprisingly, we find that wholly-owned foreign firms 

and joint ventures have the most vertically specialized trade. 

2. Methodology 

2.1 The HIY measure

To measure the extent of vertical specialization of China, we begin with the method used by 

HIY. Consider Figure 1 for illustration.6 In this figure, A is the amount of imported textile inputs. D 

is the amount of domestic sales of apparel, while E is the amount of exports of apparel to the United 

States. The measure of vertical specialization (VS) is given as (A/ (D+E))*E or (E/ (D+E))*A. 

Conceptually, this (E/ (D+E)) is the proportion of exports to total sales. When multiplied by A, the 

VS index measures the dollar value of imported inputs “contained” in Chinese exports. To get the 

share of imported inputs contained in one dollar worth of Chinese exports—VS share--we divide VS 

by E. 

 

6

 Figure 1 is adapted from Hummels, Ishii and Yi (2001).
5

Given that we will be dealing with many inputs and many exports, we follow HIY and write 

our VS share index for China in matrix notation as:

VS share / k = x

M D -1 uA [I-A]X (1)

where u is a 1 x n vector of 1’s, A

M

 is an n x n imported coefficients matrix, I is the identity matrix, 

A

D

 is the n x n domestic coefficient matrix, X is the n x 1 export vector and xk is a scalar that denotes 

the amount of exports from country k, which in our case, is China. The numerator of equation (1) 

measures all the imported inputs, iterated over the economy’s production structure, that are needed to 

produce the exports of China from all n sectors. Dividing this by the amount of Chinese exports 

yields the total (both direct and indirect) share of Chinese exports attributable to imported inputs (VS 

share). 

There are at least two concepts used in the literature which are related to VS share. One is 

the domestic content share, which is the gross value of exports minus the value of all imported 

intermediate goods used in their production divided by export value. A second term used is 

“domestic value added share”, which is not often used in the academic literature, but is identical in 

definition to the domestic content share. It can be shown that (1-VS share) is equal to the domestic 

value added ratio or the domestic content ratio. We highlight this equivalence in Appendix I.

7

2.2 A new measure of vertical specialization

To improve our ability to identify imported intermediate goods, we make use of detailed data 

on Chinese processing trade. In China’s customs statistics, processing trade consists of two types—

trade associated with processing and assembly and trade associated with processing with imported 

inputs. The Chinese government provides special incentives for enterprises engaged in processing 

trade, allowing them to import raw materials and other inputs duty free as long as these inputs are 

used to produce final goods or further processed inputs solely for export. Trade associated with 

processing and assembly means that ownership of the imported inputs is retained by the foreign 

 

7

The proof is first given in Chen, Cheng, Fung and Lau (2004) in their appendix 1. However, they did not 

realize the link between their domestic value-added measure and HIY’s VS share measure. 
6

exporting firm. Processing with imported materials means that ownership of the imported inputs is 

transferred to a local presence. 

Processing trade is highly concentrated by sector, by origin, and by firm type. In 2005, more 

than two-thirds of this trade was found in 3 key sectors: Electrical Machinery (HS85), Machinery 

(HS84), and Optical, Medical and Precision Instruments (HS90). More than three-quarters of 

imported processing inputs originated in the Four Dragons, Japan, and other Southeast Asian 

economies. In addition, foreign-invested enterprises (FIEs) accounted for 84 percent of China’s 

processing exports and imports.8

Our basic approach in measuring imported Chinese inputs is to classify all processed imports 

as imported intermediate goods. Within ordinary Chinese imports there may also be some amount of 

imported intermediate goods used for the production of exports. This is particularly true for 

information technology products, as China joined the Information Technology Agreement (ITA) in 

2003, which provides importers with duty free imports in this category. To capture these imported 

intermediate goods, we apply the United Nations BEC (Broad Economic Categories) classification to 

all Chinese non-processed imports, and include as intermediates any goods labeled as such by the 

BEC. For ease of exposition, we call this two-step approach the Dean-Fung-Wang (DFW) approach.

To identify the coefficients in the AM matrix, we use our new estimates of total sectoral 

imported intermediates, and assume that these imported inputs are used in each industry in the same 

proportion as indicated in the original input-output table. The coefficients in the AD matrix are then 

obtained as residuals by subtracting the coefficients in the AM matrix from the coefficients in the 

original input-output table. 

All data on processing imports and exports, and on ordinary trade used in the estimates of VS 

share are taken from a new USITC Chinese trade database. This database was purchased from China 

Customs, and contains official Chinese export and import data from 1995-2005 at the HS 8-digit 

 

8

 Throughout this paper, FIE will refer to three types of foreign-owned firms: wholly foreign-owned, equity 

joint venture and contractual joint venture.
7

level, differentiated by customs regime, region, source, destination, firm ownership, incentives, port, 

and transport mode. The two Chinese input-output tables that we use are from 1997 and 2002. 9 Both 

years are benchmark years, which means they include more detailed sectors than otherwise: 124 

sectors in 1997 and 122 sectors in 2002. 10

2.3 Alternative methods for identifying intermediate inputs

To test the robustness of our results, we will also utilize two other methods to codify 

imported intermediate inputs. One is to simply use the BEC identification for all Chinese imports,

and single out those that are intermediate goods under this UN classification. We shall call this the 

BEC approach. A second alternative approach is to assume that the ratio of imported intermediate 

inputs to total imports is the same as the ratio of total intermediate inputs to total absorption. This is a 

standard method used to deduce the extent of imported inputs in the input-output literature. Both 

Ping (2005) and Chen, Cheng, Fung and Lau (2004) used this basic approach in their calculations.11

We will label this alternative as the IO approach. 

Essentially these are three alternative ways to identify intermediate goods from total imports 

for each sector. To clarify the differences, define the share of total imports (i.e. imports of 

intermediate goods and imports of final goods) accounted for by intermediate goods in sector i

as INTSHi, where the subscript denotes sector i. Then imports used as intermediate inputs, IMPINTi = 

INTSHi*total imports. The three methods use different rules to identify INTSHi.

For the DFW case, INTSHi =((Processing importsi + Intermediates identified by the BEC 

classification for non-processing importsi) / total importsi.). For the BEC case:

 

9

 The Chinese input-output tables are of the competitive import type, which means that the tables do not 

differentiate between domestic intermediate goods and imported intermediate goods. To achieve the objective 

of our project, we need to convert the input-output tables into the non-competitive type, i.e. to separate out 

imported inputs and domestic inputs. As discussed earlier, the main method we used is the DFW approach.

10 These sectors are listed in tables 3 and 4. For example, the study by Chen, Cheng, Fung and Lau (2004) used 

the 1995 Chinese input-output table, which had only 33 sectors.

11 Hummels et al. (2001) also appears to use this method, but the exact method is not stated explicitly in the 

paper.
8

INTSHi = (Intermediates identified by the BEC classification from all importsi / total importsi). 

For the IO case: INTSHi = total intermediate use (domestic and imports) for sector i/ total absorption

for sector i(both domestic and imports) as given in the conventional input-output tables.

These three methods yield significantly different estimates of the sectoral shares of imported 

intermediate goods. For illustration, we present two tables in Appendix II, showing these shares for 

Chinese imports from the world and Chinese imports from the United States for the year 2002 (the 

year of the most recent Chinese benchmark input-output table ). In general, we can see that the BEC 

method yields shares that are less than or equal to the DFW method, since the DFW method counts all 

processing imports as imported intermediates. Since the IO method uses the average inputs to 

absorption ratio as the share of imported intermediate goods, it will tend to be lower (higher) than the 

DFW method in sectors where processed imports are high (low). Figure 2 illustrates the significant 

differences in the shares of imported intermediates generated by the three methods. It is clear from 

these simple regressions that the IO shares are very different from the other estimates while the BEC 

shares and the DFW shares are more closely correlated. 12

We believe that the DFW method is conceptually and economically an improvement over the 

alternative methods of identifying intermediate imports. Fundamental economic principles teach us 

that economic agents do respond to incentives. When Chinese firms or foreign firms import 

intermediate goods into the country for processing, there is every incentive for these economic agents 

to declare that these inputs are used for processing. For sectors such as information technology, 

agreements like the ITA may have reduced these incentives. But it seems that there is relatively little 

cost for these processing firms to still declare them as such. Furthermore, even if they do not declare 

these imported inputs as used for processing purposes, the BEC method should still be able to catch 

these outliers. At worst, it seems to us that the DFW method is no better than the BEC method.13 In 

 

12 Note that if we draw a 45 degree line in the graph relating the BEC and the DFW shares, we can show that the 

BEC shares are no higher than the DFW shares.

13 Because of these incentives, it is possible that producers will report more imports as processing imports than 

is actually true, implying that China official customs statistics will overstate the amount of processing imports.
9

contrast, the IO method uses a very strong assumption. While this may be necessary when detailed 

data on processing trade are not available, it is easy to see why the two alternative methods should 

yield better results. 

3. Results

3.1. Vertical Specialization in China’s Exports to the World

3.1.1 Over time. In measuring the aggregate vertical specialization shares for China’s exports 

to the world, we have two benchmark years, 1997 and 2002. The results for both direct VS shares and 

total VS shares for each year, using the DFW method of measurement are shown in Table 1. For 

comparison, the results for the same years, using the BEC and IO approaches are also shown. From 

Table 1, we can see that using the DFW method, the aggregate intermediate import content (total VS 

share) of China’s exports was 29.3% in 1997, and 35.9% in 2002. In general, the direct shares are 

less than half of the total VS shares, but they show a similar large increase during this period. This 

increase in VS shares suggests that the fragmentation of China’s exports to the world has been rising 

significantly. These trends are robust when we examine the results from the two alternative methods. 

Table 1 indicates that both the BEC method and the IO methods yield total VS share values of similar 

magnitude, though slightly smaller than the DFW method. Each of these three methods shows a rise 

in VS of about 6.5 percentage points between 1997 and 2002. 

3.1.2 By Source Country. As discussed above, China’s imports of intermediate inputs appear 

to be sourced for the most part from other Asian economies. Using the DFW method of identifying 

imported inputs, we can disaggregate China’s total VS, to assess the extent of imported intermediate 

goods from the United States and other countries, for each dollar of China’s exports to the world. We 

 

This may be one of the reasons that only about 85 percent of processing imports were identified by UN BEC 

classification as intermediate inputs. On the other hand, the BEC method may underestimate the portion of 

imported intermediates in processing trade for some double end use commodities which are entered as 

processing trade in Chinese Custom statistics.
10

again use both the 1997 and the 2002 input-output tables and extend our analysis to other years. The 

results for 1996 and for 2005 are shown in figure 3.

14

In Figure 3 we can see that Japan and the Four Dragons (Hong Kong, Taiwan, South Korea, 

Singapore) constituted more than half of China’s total VS share in 1996, with an additional 6% from 

the rest of Southeast Asia. Thus, these economies could be seen as an Asian supply network for 

China’s global production-sharing. Japan was the largest single country source of inputs, accounting 

for 20% of China’s intermediate inputs. The United States and the EU15, supplied roughly similar 

shares of 8% and 9%, respectively. Though much smaller than the Asian network, they still 

constituted important sources of intermediate inputs for China’s fragmented trade. Interestingly, 

China’s sourcing patterns do not change much by 2005. Within the Asian supply network, the focus 

has shifted away from Japan somewhat and more toward other Southeast Asian countries. But this 

network still accounts for 58% of China’s aggregate VS share in 2005. Similarly, the United States 

and EU15 still supply about 16% of China’s intermediate inputs for exports. 

3.2. China’s Vertical Specialization by Sector

Tables 2 and 3 show how the direct and total VS shares vary with different sectors using our 

own DFW methods as well as the two alternative methods. Table 2 shows sectoral results using the 

1997 benchmark input-output table , and table 3 uses the 2002 benchmark input-output table. To 

highlight the sectors with the highest total VS shares, figures 4 and 5 show the sectors with total VS 

(by DFW method) of 25% or more, for 1997 and 2002 respectively. 

In 1997, seventeen industrial manufacturing products had total VS shares of 25% or more 

(Figure 4). In three of these sectors, the value of imported inputs was greater than 50% of the value 

of exports: metal products (65%), steel processing (59%) and other electric machinery and equipment 

(53%). Cotton textiles and wearing apparel had VS shares of between 40% and 50%. Other sectors 

with relatively high total VS shares included plastic products, petroleum refining, other general 

industrial machinery , motor vehicles, and other special industrial equipment. 

 

14 The results in Figure 3 are estimated by using the DFW method only.
11

By 2002, the mix of products with the highest total VS shares had changes somewhat (Figure 

5). Now a total of 21 sectors had total VS shares exceeding 25%. Six manufacturing sectors now had 

total VS shares exceeding 50% of exports: plastic products (76 %), steel processing (69 %), 

communication equipment (59%), other general industrial machinery (58 %), metal products (55 %), 

and electronic computers (52.1 percent). In an additional six sectors, the value of imported inputs 

was between 40% and 50% of the value of exports. 

These results are fairly robust across the three methods, though there are some minor 

variations. For example, for motor vehicles for the year 2002, the IO approach, the BEC approach 

and the DFW approach yielded respectively total VS shares of 35.1%, 31.9% and 34.0%. We expect

that the BEC method, which applies the United Nations classification of intermediate goods 

uniformly for processing as well as non-processing imports, would yield the lowest estimates of the 

VS shares, and this is borne out in figures 2 and 3. We also expect that the IO method would 

underestimate VS in sectors with a high level of processing trade and overestimate it in sectors with a 

low level of processing trade. This is borne out to some degree in the two figures. 

Figure 6 shows the change in VS shares from 1997-2002 for selected sectors. It is 

immediately evident that in most of these sectors, VS shares have grown significantly. While 

imported inputs constituted 39 cents of every US dollar worth of plastic products exported by China 

in 1997, this nearly doubled to 76 cents of each dollar of exports by 2002. Total VS more than 

doubled in communication equipment and sawmills and wood products, and grew by at least onethird in electronic computers, and general industrial machinery. Interestingly, VS shares in cotton 

textiles and wearing apparel actually fell. 

3.3. China’s Vertical Specialization in Exports by Trading Partner

In measuring the vertical specialization shares of China’s exports to the United States, we 

again utilize the two benchmark input-output tables, which provide us with two matrices of 

coefficients of imported intermediates, one for 1997 and one for 2002. To get results for other years, 

we assume these import matrices to be unchanged, but we allow China’s exports to the United States 
12

to vary. Using the 1997 matrix, we extrapolate the calculations for the years 1996 to 2001. Similarly 

we can measure the VS shares of China’s exports to the United States using the 2002 input-output 

tables and extrapolate our measurements to the years 2001-2005 by changing the export vector for 

each year. To save space, we present only results with our DFW method. These VS shares are 

presented in Table 4.

From Table 4 we can see that both the direct and total VS shares are rising over time for 

China’s exports to the United States. This suggests that China’s exports to the United States contain 

an increasing share of imported intermediate goods over time. China appears to be increasingly 

enmeshed in the global network of production fragmentation, whether we consider its trade with the 

world or its trade with the United States. Figure 5 shows the fragmentation of China’s exports to a 

number of trading partners over time, using the DFW measure.

15

 The vertical specialization of 

China’s exports to the United States and the EU15 show a similar trajectory, beginning a little above 

25% in 1996, and rising to about 30% in 2005, with an acceleration starting in 2000. China’s exports 

to Japan are less vertically specialized, though the pattern over time is not too different from that of 

the United States or the EU. 

We might expect that China’s exports to India would be less fragmented, since it is a country 

at a similar level of development. Figure 5 suggests that this is the case. China’s exports to India 

begin with a total VS of only 20%, which does rise rapidly to about 27% at the end of the period, but 

remains significantly below the level of VS for the industrialized economies. Interestingly, the VS 

for China’s exports to Singapore and Taiwan follow a similar pattern to that of the US and the EU15. 

3.4. Vertical Specialization by Chinese Exporting Firms

Our rich Chinese trade data also allow us to differentiate a variety of Chinese exporting firms 

and we measure the degree of fragmentation in their exports as well. Table 5 shows results for 2002

 

15 In the figure, the VS value for 2001 is based on the results using the 2002 matrix.
13

for Chinese firms exporting to the world, and for firms exporting to the United States.16 For exports 

going to the world, we can see that the highest VS share was for wholly-owned foreign firms, 

followed by joint ventures, collectives, state-owned enterprises and others. For exports to the United 

States, the total VS share was highest again with the wholly-owned foreign firms, followed by 

collectives, joint ventures, state-owned enterprises and then others. Not surprisingly, the FIEs 

showed more fragmentation than state-owned firms. 

5. Conclusion

While trade fragmentation and China’s rapidly growing trade have been recognized as 

important economic phenomena, the importance of fragmentation in China’s trade growth has been 

left unexamined until recently. In this paper, we provide the most up-to-date and comprehensive 

measures of the degree of vertical specialization in China’s trade, using a new detailed Chinese 

dataset which allows us to distinguish processing imports and exports from ordinary trade. We 

further utilize the United Nations Broad Economic Categories (BEC) system to identify nonprocessed imported intermediates from imports of final goods These data are incorporated into the 

Hummels, et al. (2001) measure of vertical specialization, using both the 1997 and 2002 benchmark 

Chinese IO tables. We then quantify vertical specialization over time, by source, by trading partner, 

sector, and type of firm.

Our results show that the vertical specialization in China’s exports to the world was more 

than 30% in 2002. In the sectors with the most fragmented trade--plastic products, steel processing, 

communication equipment, industrial machinery, metal products and computers—vertical 

specialization exceeded 50%. Not surprisingly, the firms with the most fragmented trade are the 

foreign-invested enterprises. There is strong evidence of the importance and persistence of an Asian 

supplier network to China. About 58% China’s aggregate vertical specialization in 2002 was 

attributable to imports from Japan, Taiwan, South Korea and other Southeast Asian economies.

 

16 Here we present only results measured by the IO approach. In future work we will include estimates using 

the BEC and DFW approaches.
14

Among bilateral partners, China’s vertical specialization was high (about 30%) with not only the US, 

the EU 15, and Canada, but also with Taiwan and Singapore. Our evidence also suggests that the 

fragmentation in China’s global trade is growing, particularly its trade with the US and the EU. 

Our results are generally robust to the use of alternative methods of measurement. However, 

for some specific sectors, there can be some variations across methods. For example, in 1997, for 

motor vehicles, the extent of fragmentation was 34% using our own DFW method, but it was 31.9% 

using the BEC method and 35% using the IO approach. These variations could become important for 

our future work since we intend to econometrically determine the how the VS shares can vary with 

different variables as suggested in the theoretically literature. The alternative measures give us an 

opportunity to test the robustness of our future estimates. 
15

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18

Figure 1

Imported 

Intermediate Textile 

Imports 

A

Country 1

Domestic 

Intermediate 

Goods

Capital, 

Labor

CHINA

C

B

Final 

Apparel 

Goods

Apparel Exports 

Domestic 

Sales

D

E
19

Figure 2. Comparing Intermediate Shares Calculated by the Three Methods for 2002:

 (a) IO and DFW 

0 20 40 60 80 100

20 40 60 80 100

Intshio

95% CI Fitted values

intshdfw

(b) BEC and DFW

0 20 40 60 80 100

0 20 40 60 80 100

intshbec

95% CI Fitted values

intshdfw

(c) IO and BEC

0 50 100

20 40 60 80 100

Intshio

95% CI Fitted values

intshbec
20

Figure 3. China’s Vertical Specialization by Source Country

China's Vertical Specialization by Source Country, 1996

Japan, 20%

4 Dragons, 32%

US, 9%

EU15, 8%

Rest of SEA, 6%

Australia/NZ, 5%

All Other, 20%

China's Vertical Specialization by Source Country, 2005

Japan, 16%

4 Dragons, 33%

US, 7%

EU15, 9%

Rest of SEA, 9%

Australia/NZ, 4%

All Other, 22%
Figure 4. Total VS Shares by Selected Sectors, 1997

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Metal products

Steel processing

Other electric machinery and equipment

Cotton textiles

Wearing apparelPlastic products

Petroleum refining

Other general industrial machinery

Motor vehicles

Other special industrial equipment

Electronic computer

Electronic appliances

Electricity production and supply

Other electronic and communication equipment

 Household electric appliances Electronic element and device

Leather, furs, down and related products

IO Method

BEC Method

DFW Method
2

Figure 5. Total VS Shares by Selected Sectors, 2002

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Plastic products

Steel processing

Communication equipment

Other general industrial machinery

Metal products

Electronic computer

Petroleum refining

Other electric machinery and equipment

Electronic appliances

Wearing apparel

Sawmills and products of wood, etc.

Electronic element and device

Other special industrial equipment

Household video and audio manufacture

Motor vehicles

Cotton textiles

Paper and products

Leather, furs, down and related products

Nonferrous metal smelting

Automobile parts

Other food products

Specialized chemical products

IO Method

BEC Method

DFW Method
3

Figure 6. Change in Total Vertical Specialization, 1997-2002 (Selected Sectors)

0% 10% 20% 30% 40% 50% 60% 70% 80%

Plastic products

Steel processing

Communication equipment

Other general industrial machinery

Metal products

Electronic computer

Petroleum refining

Other electric machinery and equipment

Electronic appliances

Wearing apparel

Sawmills and products of wood, etc.

Electronic element and device

Other special industrial equipment

Household video and audio manufacture

Motor vehicles

Cotton textiles

Paper and products

Leather, furs, down and related products

Automobile parts

Nonferrous metal smelting

Other food products

Specialized chemical products

 Household electric appliances

Other electronic and communication equipment

DFW02

DFW97
4

Figure 7. Vertical Specialization of China's Exports to Selected Trading Partners, 1996-2005

0.00

0.10

0.20

0.30

0.40

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Total Vertical Specialization (DFW Method)

US

EU15

India

Japan

Singapore

Taiwan
Table 1. Aggregate Vertical Specialization Shares for China’s Exports to the World: DFW, BEC and IO Approaches

Year

Direct VS 

Share 

DFW

Total VS Share 

DFW

Direct VS 

Share 

BEC

Total VS Share 

BEC 

Direct VS 

Share 

IO 

Total VS Share 

IO

Total VS Share 

IO

Ping (2005)

1997 12.8% 29.3% 12.1% 28.1% 12.2% 29.2% 15.19%

2002 17.3% 35.9% 16.6% 34.6% 17.0% 35.7% 21.03%
Table 2. Vertical Specialization Share Estimates Based on China’s 1997 Benchmark Input-Output Table

IOCode Description IO Method BEC Method DFW Method

Direct Total Direct Total Direct Total

001 Crop cultivation 0.219 0.57 0.199 0.52 0.203 0.54

002 Forestry 0.012 0.03 0.011 0.026 0.012 0.03

003 Livestock and livestock products 0.041 0.22 0.055 0.221 0.056 0.23

004 Fishery 0.034 0.1 0.025 0.086 0.028 0.09

005 Other agricultural products 0.019 0.05 0.02 0.05 0.021 0.05

006 Coal mining and processing 0.098 0.21 0.089 0.189 0.092 0.2

007 Crude petroleum products 0.029 0.07 0.022 0.058 0.024 0.06

008 Natural gas products 0.004 0.01 0.003 0.008 0.003 0.01

009 Ferrous ore mining 0.043 0.07 0.039 0.06 0.039 0.06

010 Non-ferrous ore mining 0.032 0.08 0.029 0.077 0.031 0.08

011 Salt mining 0.001 0.01 0.001 0.005 0.001 0.01

012 Non-metal minerals and other mining 0.042 0.12 0.037 0.108 0.038 0.11

013 Logging and transport of timber and bamboo 0.008 0.02 0.008 0.016 0.008 0.02

014 Grain mill products, vegetable oil and forage 0.03 0.2 0.03 0.185 0.048 0.21

015 Sugar refining 0.007 0.02 0.008 0.021 0.009 0.02

016 Slaughtering , meat processing, eggs and dairy products 0.005 0.05 0.007 0.052 0.008 0.06

017 Prepared fish and seafood 0.004 0.03 0.003 0.027 0.007 0.03

018 Other food products 0.049 0.17 0.059 0.174 0.067 0.19

019 Wines, spirits and liquors 0.023 0.1 0.024 0.092 0.025 0.1

020 Non-alcoholic beverage 0.021 0.07 0.024 0.067 0.027 0.07

021 Tobacco products 0.016 0.06 0.014 0.052 0.015 0.05

022 Cotton textiles 0.199 0.47 0.203 0.466 0.207 0.48

023 Woolen textiles 0.054 0.11 0.059 0.117 0.06 0.12

024 Hemp textiles 0.011 0.02 0.012 0.019 0.012 0.02

025 Silk textiles 0.025 0.11 0.026 0.108 0.027 0.11

026 Knitted mills 0.051 0.14 0.068 0.148 0.073 0.15

027 Other textiles 0.037 0.08 0.039 0.079 0.039 0.08

028 Wearing apparel 0.188 0.42 0.21 0.435 0.215 0.45

029 Leather, furs, down and related products 0.07 0.19 0.121 0.24 0.128 0.25

030 Sawmills and fibreboard 0.073 0.13 0.072 0.123 0.073 0.13

031 Furniture and products of wood, bamboo, cane, palm, straw, etc. 0.069 0.18 0.077 0.182 0.079 0.19

032 Paper and products 0.071 0.2 0.07 0.191 0.072 0.2

033 Printing and record medium reproduction 0.032 0.08 0.032 0.079 0.033 0.08

034 Cultural goods 0.011 0.02 0.012 0.023 0.012 0.02

035 Toys, sporting and athletic and recreation products 0.045 0.1 0.046 0.1 0.057 0.11

036 Petroleum refining 0.291 0.41 0.272 0.377 0.273 0.38

037 Coking 0.005 0.03 0.004 0.023 0.005 0.02

038 Raw chemical materials 0.028 0.1 0.025 0.089 0.026 0.09

039 Chemical fertilizers 0.047 0.14 0.042 0.133 0.044 0.14

040 Chemical pesticides 0.018 0.05 0.011 0.039 0.012 0.04

041 Organic chemical products 0.099 0.25 0.094 0.238 0.096 0.24

042 Chemical products for daily use 0.021 0.07 0.022 0.07 0.023 0.07

043 Other chemical products 0.094 0.21 0.089 0.194 0.091 0.2

044 Medical and pharmaceutical products 0.032 0.12 0.031 0.109 0.033 0.12

045 Chemical fibers 0.112 0.2 0.113 0.197 0.115 0.2

046 Rubber products 0.067 0.15 0.068 0.145 0.072 0.15

047 Plastic products 0.183 0.39 0.184 0.38 0.192 0.39
2

048 Cement 0.049 0.21 0.04 0.19 0.043 0.2

049 Cement and asbestos products 0.015 0.1 0.014 0.093 0.015 0.1

050 Bricks, tiles, lime and light-weight building materials 0.051 0.19 0.051 0.177 0.052 0.18

051 Glass and glass products 0.022 0.07 0.021 0.061 0.022 0.06

052 Pottery, china and earthenware 0.016 0.06 0.015 0.055 0.016 0.06

053 Fireproof products 0.013 0.05 0.013 0.045 0.013 0.05

054 Other non-metallic mineral products 0.02 0.07 0.017 0.062 0.018 0.07

055 Iron-smelting 0.082 0.12 0.079 0.116 0.079 0.12

056 Steel-smelting 0.05 0.11 0.046 0.099 0.046 0.1

057 Steel processing 0.265 0.63 0.242 0.581 0.245 0.59

058 Alloy iron smelting 0.034 0.06 0.033 0.06 0.033 0.06

059 Nonferrous metal smelting 0.062 0.16 0.061 0.149 0.061 0.15

060 Nonferrous metal processing 0.054 0.13 0.053 0.127 0.053 0.13

061 Metal products 0.224 0.69 0.203 0.636 0.208 0.65

062 Boiler, engines and turbine 0.059 0.12 0.054 0.113 0.058 0.12

063 Metalworking machinery 0.037 0.08 0.022 0.065 0.024 0.07

064 Other general industrial machinery 0.165 0.41 0.116 0.349 0.14 0.38

065 Agriculture, forestry, animal husbandry and fishing machinery 0.057 0.15 0.046 0.133 0.049 0.14

066 Other special industrial equipment 0.143 0.33 0.1 0.279 0.117 0.3

067 Railroad transport equipment 0.018 0.04 0.013 0.036 0.015 0.04

068 Motor vehicles 0.099 0.35 0.086 0.319 0.093 0.34

069 Ship building 0.028 0.06 0.02 0.049 0.023 0.05

070 Aircraft 0.144 0.16 0.112 0.126 0.112 0.13

071 Bicycle 0.016 0.05 0.035 0.074 0.035 0.08

072 Other transport machinery 0.062 0.17 0.062 0.163 0.066 0.17

073 Generators 0.046 0.09 0.032 0.073 0.04 0.08

074 Household electric appliances 0.117 0.27 0.091 0.234 0.108 0.26

075 Other electric machinery and equipment 0.25 0.54 0.227 0.507 0.237 0.53

076 Electronic computer 0.212 0.31 0.183 0.277 0.202 0.3

077 Electronic appliances 0.179 0.29 0.167 0.271 0.18 0.29

078 Electronic element and device 0.162 0.26 0.147 0.243 0.158 0.26

079 Other electronic and communication equipment 0.166 0.28 0.148 0.259 0.161 0.27

080 Instruments, meters and other measuring equipment 0.069 0.11 0.048 0.087 0.054 0.09

081 Cultural and office equipment 0.042 0.06 0.037 0.058 0.039 0.06

082 Maintenance and repair of machinery and equipment 0.111 0.17 0.086 0.137 0.088 0.14

083 Arts and crafts products 0.041 0.11 0.045 0.113 0.046 0.12

084 Other manufacturing products 0.037 0.1 0.036 0.1 0.04 0.11

085 Scrap and waste 0 0 0 0 0 0

086 Electricity production and supply 0.11 0.32 0.08 0.277 0.089 0.29

087 Steam and hot water production and supply 0.003 0.01 0.002 0.01 0.003 0.01

088 Gas production and supply 0.003 0.01 0.002 0.011 0.003 0.01

089 Water production and supply 0.005 0.02 0.004 0.02 0.005 0.02

090 Construction 0.434 1.71 0.376 1.57 0.396 1.63

091 Railway freight transport 0.016 0.05 0.015 0.048 0.015 0.05

092 Highway freight transport 0.036 0.12 0.034 0.11 0.035 0.11

093 Pipeline transport 0.001 0 0.001 0.003 0.001 0

094 Water freight transport 0.01 0.03 0.007 0.022 0.007 0.02

095 Air freight transport 0.049 0.06 0.039 0.048 0.039 0.05

096 Transportation not elsewhere classified and auxiliary body 0.017 0.05 0.015 0.046 0.016 0.05

097 Warehousing 0.002 0.01 0.002 0.005 0.002 0.01
3

098 Post 0.012 0.03 0.013 0.026 0.014 0.03

099 Telecommunication 0.052 0.15 0.04 0.134 0.046 0.14

100 Wholesale and retail trade 0.226 0.79 0.241 0.763 0.26 0.8

101 Eating and drinking places 0.024 0.11 0.025 0.1 0.047 0.13

102 Railway passenger transport 0.007 0.02 0.007 0.02 0.007 0.02

103 Highway passenger transport 0.007 0.02 0.007 0.023 0.008 0.02

104 Water passenger transport 0.011 0.03 0.007 0.023 0.008 0.03

105 Air passenger transport 0.345 0.39 0.27 0.315 0.271 0.32

106 Finance 0.152 0.29 0.151 0.282 0.156 0.29

107 Insurance 0.024 0.05 0.025 0.05 0.026 0.05

108 Real estate 0.022 0.07 0.023 0.066 0.024 0.07

109 Public services 0.027 0.09 0.025 0.083 0.027 0.09

110 Resident services 0.081 0.15 0.082 0.148 0.085 0.15

111 Hotels 0.02 0.05 0.021 0.047 0.024 0.05

112 Tourism 0.11 0.19 0.11 0.178 0.11 0.18

113 Recreational services 0.007 0.02 0.007 0.017 0.009 0.02

114 Other social services 0.25 0.42 0.227 0.392 0.246 0.41

115 Health services 0.034 0.12 0.026 0.111 0.028 0.12

116 Sports 0.001 0 0.001 0.003 0.002 0

117 Social welfare 0.004 0.01 0.004 0.008 0.004 0.01

118 Educational services 0.095 0.21 0.095 0.196 0.102 0.21

119 Culture and arts, radio, film and television 0.022 0.06 0.023 0.055 0.025 0.06

120 Scientific research 0.041 0.06 0.034 0.054 0.036 0.06

121 General technical services 0.031 0.06 0.028 0.051 0.03 0.05

122 Technical services for agriculture, forestry, livestock and fishing 0.006 0.02 0.006 0.016 0.006 0.02

123 Geological prospecting and water conservancy 0.01 0.04 0.01 0.033 0.01 0.03

124 Public administration and other sectors 0.217 0.51 0.218 0.482 0.226 0.5

Total 0.122 0.29 0.121 0.281 0.128 0.29
4

Table 3. Vertical Specialization Share Estimates Based on China’s 2002 Benchmark Input-output Table

IOCode Description IO Method BEC Method DFW Method

Direct Total Direct Total Direct Total

01001 Crop cultivation 0.175 0.491 0.174 0.47 0.16 0.47

02002 Forestry 0.033 0.073 0.033 0.072 0.031 0.071

02003 Livestock and livestock products 0.009 0.018 0.008 0.017 0.008 0.018

03004 Fishery 0.016 0.204 0.019 0.197 0.019 0.223

04005 Other agricultural products 0.044 0.129 0.039 0.118 0.041 0.128

05006 Technical services for agriculture, forestry, livestock and fishing 0.011 0.027 0.01 0.026 0.011 0.028

06007 Coal mining and processing 0.086 0.201 0.066 0.176 0.076 0.191

07008 Crude petroleum and natural gas mining 0.054 0.117 0.033 0.095 0.044 0.108

08009 Ferrous ore mining 0.036 0.06 0.034 0.057 0.035 0.059

09010 Non-ferrous ore mining 0.022 0.054 0.019 0.049 0.021 0.053

10011 Salt mining 0.002 0.006 0.002 0.006 0.002 0.006

10012 Non-metal minerals and other mining 0.031 0.087 0.026 0.08 0.029 0.085

13013 Grain mill products 0.007 0.053 0.008 0.052 0.009 0.053

13014 feed products 0.025 0.069 0.024 0.066 0.049 0.093

13015 vegetable oil and forage 0.017 0.064 0.028 0.074 0.029 0.075

13016 Sugar refining 0.007 0.018 0.008 0.018 0.009 0.02

13017 Slaughtering , meat processing, eggs and dairy products 0.007 0.047 0.008 0.047 0.009 0.051

13018 Prepared fish and seafood 0.01 0.043 0.01 0.04 0.019 0.052

13019 Other food products 0.08 0.22 0.098 0.234 0.11 0.251

15020 Wines, spirits and liquors 0.015 0.053 0.014 0.05 0.015 0.052

15021 Non-alcoholic beverage 0.023 0.063 0.025 0.064 0.028 0.068

16022 Tobacco products 0.005 0.022 0.007 0.023 0.007 0.024

17023 Cotton textiles 0.104 0.313 0.101 0.3 0.104 0.311

17024 Woolen textiles 0.032 0.067 0.035 0.069 0.037 0.072

17025 Hemp and silk textiles 0.022 0.065 0.024 0.066 0.025 0.068

17026 textiles products 0.042 0.083 0.046 0.086 0.047 0.088

17027 Knitted mills 0.07 0.166 0.076 0.168 0.082 0.176

18028 Wearing apparel 0.181 0.383 0.202 0.397 0.217 0.416

19029 Leather, furs, down and related products 0.096 0.216 0.136 0.251 0.142 0.26

20030 Sawmills and products of wood, bamboo, cane, palm, straw, etc. 0.242 0.406 0.243 0.403 0.246 0.41

21031 Furniture 0.081 0.171 0.084 0.172 0.085 0.176

22032 Paper and products 0.116 0.266 0.114 0.258 0.118 0.268

23033 Printing and record medium reproduction 0.049 0.141 0.047 0.136 0.049 0.141

24034 Cultural goods 0.011 0.027 0.011 0.027 0.012 0.028

24035 Toys, sporting and athletic and recreation products 0.058 0.121 0.058 0.119 0.07 0.132

25036 Petroleum refining 0.312 0.486 0.317 0.469 0.322 0.487

25037 Coking 0.008 0.03 0.008 0.028 0.008 0.03

26038 Raw chemical materials 0.113 0.218 0.105 0.201 0.111 0.214

26039 Chemical fertilizers 0.054 0.133 0.05 0.124 0.053 0.131

26040 Chemical pesticides 0.025 0.045 0.024 0.044 0.022 0.042

26041 Dye, printing oil and similar products 0.075 0.157 0.073 0.151 0.075 0.157

26042 Organic chemical products 0.099 0.193 0.096 0.185 0.099 0.192

26043 specialized chemical products 0.131 0.245 0.127 0.235 0.133 0.246

26044 Chemical products for daily use 0.039 0.089 0.041 0.089 0.042 0.092

27045 Medical and pharmaceutical products 0.07 0.172 0.065 0.164 0.07 0.172

28046 Chemical fibers 0.081 0.155 0.078 0.149 0.081 0.154

29047 Rubber products 0.057 0.129 0.056 0.124 0.058 0.129
5

30048 Plastic products 0.41 0.76 0.403 0.742 0.412 0.76

31049 Cement 0.045 0.142 0.038 0.129 0.042 0.137

31050 Glass and glass products 0.046 0.095 0.046 0.091 0.047 0.095

31051 Pottery, china and earthenware 0.018 0.044 0.018 0.042 0.018 0.044

31052 Fireproof products 0.018 0.047 0.017 0.045 0.018 0.047

31053 Other non-metallic mineral products 0.025 0.08 0.023 0.075 0.024 0.079

32054 Iron-smelting 0.077 0.12 0.077 0.118 0.078 0.12

32055 Steel-smelting 0.119 0.236 0.112 0.223 0.114 0.23

32056 Steel processing 0.28 0.708 0.26 0.665 0.268 0.69

32057 Alloy iron smelting 0.035 0.06 0.034 0.058 0.035 0.059

33058 Nonferrous metal smelting 0.146 0.256 0.142 0.244 0.144 0.252

33059 Nonferrous metal processing 0.076 0.205 0.075 0.197 0.076 0.203

34060 Metal products 0.189 0.561 0.173 0.525 0.179 0.545

35061 Boiler, engines and turbine 0.069 0.132 0.063 0.121 0.069 0.131

35062 Metalworking machinery 0.044 0.087 0.024 0.065 0.028 0.071

35063 Other general industrial machinery 0.243 0.604 0.18 0.525 0.223 0.581

36064 Agriculture, forestry, animal husbandry and fishing machinery 0.036 0.084 0.027 0.071 0.029 0.075

36065 Other special industrial equipment 0.175 0.41 0.132 0.358 0.156 0.392

37066 Railroad transport equipment 0.025 0.05 0.018 0.041 0.021 0.045

37067 Motor vehicles 0.112 0.351 0.094 0.319 0.105 0.34

37068 automobile parts 0.09 0.266 0.076 0.24 0.08 0.252

37069 Ship building 0.067 0.11 0.057 0.097 0.064 0.106

37071 Other transport machinery 0.107 0.211 0.099 0.198 0.104 0.208

39072 Generators 0.061 0.121 0.045 0.103 0.058 0.116

39073 Household electric appliances 0.101 0.239 0.084 0.217 0.099 0.235

39074 Other electric machinery and equipment 0.211 0.478 0.188 0.447 0.203 0.469

40075 Communication equipment 0.359 0.586 0.349 0.571 0.367 0.589

40076 Electronic computer 0.384 0.573 0.38 0.566 0.297 0.521

40077 Electronic appliances 0.341 0.465 0.335 0.457 0.323 0.455

40078 Electronic element and device 0.283 0.409 0.276 0.399 0.284 0.409

40079 Household video and audio manufacture 0.268 0.377 0.265 0.372 0.276 0.381

40080 Other electronic and communication equipment 0.104 0.128 0.105 0.128 0.11 0.133

41081 Instruments, meters and other measuring equipment 0.101 0.147 0.062 0.109 0.083 0.131

41082 Cultural and office equipment 0.146 0.185 0.153 0.189 0.156 0.192

42083 Arts and crafts products 0.04 0.105 0.047 0.109 0.049 0.114

42084 Other manufacturing products 0.028 0.066 0.027 0.063 0.032 0.07

43085 Scrap and waste 0 0 0 0 0 0

44086 Electricity, Steam and hot water production and supply 0.174 0.414 0.101 0.331 0.142 0.381

45087 Gas production and supply 0.011 0.029 0.012 0.028 0.012 0.029

46088 Water production and supply 0.017 0.035 0.015 0.032 0.016 0.034

47089 Construction 0.972 2.519 0.807 2.287 0.915 2.446

51090 Railway passenger transport 0.021 0.051 0.015 0.042 0.016 0.044

51091 Railway freight transport 0.025 0.072 0.019 0.062 0.02 0.065

52092 Highway passenger transport 0.083 0.21 0.085 0.205 0.086 0.213

53093 Highway freight transport 0.014 0.042 0.014 0.04 0.015 0.042

54094 Water passenger and freight transport 0.086 0.282 0.07 0.257 0.073 0.27

55095 Air passenger transport 0.03 0.072 0.026 0.068 0.027 0.07

55096 Air freight transport 0.008 0.022 0.007 0.021 0.007 0.022

56097 Pipeline transport 0.002 0.005 0.001 0.004 0.001 0.005

58098 Warehousing 0.012 0.039 0.009 0.036 0.011 0.038
6

59099 Post 0.012 0.034 0.012 0.033 0.013 0.035

60100 information transfer services 0.21 0.309 0.176 0.272 0.209 0.304

61101 computer and software services 0.085 0.196 0.081 0.188 0.071 0.183

63102 Wholesale and retail trade 0.277 0.813 0.277 0.791 0.294 0.824

66103 Hotels 0.02 0.071 0.02 0.069 0.023 0.074

67104 Eating and drinking places 0.083 0.236 0.083 0.231 0.139 0.293

68105 Finance 0.191 0.299 0.211 0.311 0.214 0.318

70106 Insurance 0.024 0.071 0.024 0.069 0.025 0.071

72107 Real estate 0.042 0.171 0.04 0.164 0.042 0.17

73108 Public services 0.003 0.008 0.003 0.008 0.003 0.008

74109 Resident services 0.125 0.396 0.123 0.387 0.091 0.368

74110 Tourism 0.013 0.03 0.013 0.029 0.013 0.03

75111 Scientific research 0.061 0.091 0.054 0.083 0.061 0.09

76112 specialized technical and other services 0.036 0.078 0.03 0.069 0.032 0.073

78113 Geological prospecting and water conservancy 0.007 0.017 0.004 0.015 0.006 0.016

79114 irrigation facility management 0.007 0.018 0.005 0.016 0.006 0.017

80115 Management of environment resource and public infrastructure 0.019 0.055 0.016 0.05 0.018 0.054

82116 household and other services 0.281 0.43 0.314 0.452 0.319 0.463

84117 Educational services 0.171 0.335 0.161 0.314 0.177 0.338

85118 Health services 0.064 0.188 0.04 0.162 0.047 0.175

86119 Social welfare 0.002 0.006 0.002 0.006 0.002 0.006

88120 Culture and arts, radio, film and television 0.033 0.076 0.032 0.073 0.036 0.079

91121 Sports 0.001 0.004 0.001 0.004 0.002 0.005

92122 Recreational services 0.008 0.023 0.008 0.023 0.011 0.026

93123 Public administration and other sectors 0.163 0.436 0.172 0.428 0.179 0.45

Total 0.17 0.357 0.166 0.346 0.173 0.359
7

Table 4. Vertical Specialization Shares for China’s Exports to the United States 

Benchmark IO 

Table

Year

Direct VS Share

DFW

Total VS Share

DFW

1997 1996 12.36% 25.88%

1997 1997 12.30% 25.46%

1997 1998 12.48% 25.93%

1997 1999 12.69% 26.38%

1997 2000 12.89% 26.73%

1997 2001 12.96% 27.00%

2002 2001 15.70% 29.61%

2002 2002 15.99% 29.82%

2002 2003 16.66% 30.67%

2002 2004 16.85% 31.01%

2002 2005 16.68% 30.75%

Table 5. Total Vertical Specialization Shares by Types of Chinese Exporting Firms, 2002

Types of Firms Total VS Share for China’s 

Exports to The World in 

2002

Total VS Share for China’s 

Exports to the United States 

in 2002

State-Owned Enterprises 27.25% 28.72%

Joint-Ventures 28.68% 29.53%

Wholly-owned foreign firms 30.60% 30.34%

Collectives 28.23% 29.98%

Others 26.00% 26.63%
8

APPENDIX I

As Hummels, Ishii and Yi (2001) (HIY) state, “imported inputs are allowed to circulate through 

several stages of the domestic economy before ‘exiting’ as an export.” The imported intermediates in the 

HIY definition of vertical specialization (VS) include all direct and indirect imported inputs embodied in 

a country’s exports (HIY, page 80). They therefore describe their VS measure as "the imported input 

content of exports, or equivalently, foreign value-added embodied in exports" (HIY page 79, italics 

added).17 It is easy to show that the domestic content share, or domestic value-added share18 in a 

country’s aggregate exports equals one minus the VS share measure proposed by HIY in a noncompetitive import type input-output (IO) model. 

The IO model can be specified as follows:

A X Y X

D D

+ = (1)

A X Y M

M M

+ = (2)

A A X Av X X

D M

+ + =

∧

( )' (3)

uA uA A u v

D M

+ + = (4)

where: 

A

D = [aD

ij] is an n nx matrix of direct input coefficients of domestic products;

A

M

 = [a

M

ij] is an n nx matrix of direct inputs of imported goods;

Y

D

 is an nx1 vector of final demands for domestic products;

Y

M

 is an nx1 vector of final demands for imported goods;

X is an nx1 vector of gross output;

M is an nx1 vector of imports;

Av = [a

v

j] is a 1xn vector of each sector j’s ratio of value-added to gross output; 

ˆAV

 is an n nx diagonal matrix with Av as its diagonal elements;

u is a 1xn unity vector;

superscripts D and M represent domestic and imported products, respectively;

subscripts i and j indicate sectors.

From equation (1), we have 

 

17 Note that HIY are referring to the value of imported intermediate goods embodied in the home country’s exports. 

They are not referring to the returns to foreign labor or foreign capital working in the home country. 

18 The term “domestic value-added” used throughout this appendix is most often referred to in the trade literature as 

“domestic content.” 
9

D D X I A Y1

( )

−

= − (5)

Substituting equation (5) into equation (2) for X, yields:

M D D M M = A I − A Y + Y−1

( ) , (6)

Suppose that there is an incremental increase in exports of DE. Assuming no other change in domestic 

final demand (DY

D= DE), the incremental increase in gross output induced by this change is given by

X I A E

D Δ = − Δ−1

( ) (7)

according to equation (5). Define the incremental increase in value-added induced by a change in gross 

output as: 

VAX v

∧

Δ = Δ (8)

Then, substituting equation (7) for DX, the incremental increase in value-added induced by this increase in 

exports is given by

V A X A I A E

D

v Δ = v Δ = − Δ

−

∧ ∧

1

( ) (9)

 where V = {vj } is an nx1 vector of sector value-added. (Miller and Jones, 1985, Chen et al 2005, and 

Lau et al, 2006). 

Define Bv= {b

V

j}, a 1xn vector, as the “domestic value added” generated by one unit of exports

(DE = u’). Based on (9), we have 1( )

−

= Δ = −

D Bv V Av

I A . The intuition behind Bv is as follows. 

When an export is produced, a first round of value-added is generated. Let us call it the direct domestic 

value-added induced by exports. In order to produce that export, however, intermediate inputs must be 

used. The production of these intermediate inputs creates the second-round of value-added. Let us call 

this the indirect domestic value added induced by exports. Clearly, this process of creating indirect valueadded can be traced throughout the economy, as intermediate inputs are used to produce other 

intermediate inputs, etc. Therefore, the total domestic value-added induced by exports is equal to the sum 
10

of direct domestic value-added and all indirect domestic value-added (Chen, et. al, 2004). Expressing this 

process mathematically using the terms defined above, we have 

( ...)

....

2 3

= + + + +

= + + + +

D D D

v

D D D

v

D D

v

D

v v v

A I A A A

B A A A A A A A A A A

(10)

It can be shown that the power series of matrix D A is convergent and the inverse matrix 1( )

−

−

D

I A

exists (Miller and Jones, 1985). Thus, we have

1

( )

−

= −

D Bv Av

I A (11)

Now define Bm = {bM

j}, a 1xn vector which represents the VS in one unit of exports. Then based 

on HIY’s equation (3), we have:

1

( )

−

= −

M D

Bm uA I A (12)

where AM and (I – AD)

-1

are defined as above. It is easy to show that

Bv + Bm = u

19

.

Since D M Av = u'−u' A − u' A by definition from equation (4), therefore, 

v

D

v

D M D

D M D

D D M D

M D

M D

m

A I A B

u uA uA I A

u I A A I A

u I A I A A I A

u I A I A

u B u uA I A

= − =

= − − −

= − − −

= − − − −

= − −

− = − −

−

−

−

− −

−

−

1

1

1

1 1

1

1

( )

( )( )

[( )( ) ]

[( )( ) ( ) ]

( ( )

( )

(13)

Therefore, Bm + Bv = u and Bv is the domestic value-added embodied in exports. 

 

19 The proof is first given in Chen, Cheng, Fung and Lau (2004) in their appendix 1. However, they did not realize 

the link of their domestic value-added measure and Hummels, Ishii and Yi (2001)’s VS measure.
11

APPENDIX II

Share of intemediate and final good identified by different methods - China's imports from the United States, 2002 

ioid IOCode description intshbec finshbec intshdfw finshdfw Intshio Finshio

1 01001 Crop cultivation 95.75 4.25 96.41 3.59 62.35 37.65

2 02002 Forestry 100.00 100.00 83.65 16.35

3 02003 Livestock and livestock products 100.00 100.00 97.68 2.32

4 03004 Fishery 85.32 14.68 85.32 14.68 39.19 60.81

5 04005 Other agricultural products 94.39 5.61 94.39 5.61 50.11 49.89

6 05006

Technical services for agriculture, forestry, livestock 

and fishing 30.60 69.40 39.01 60.99 74.52 25.48

7 06007 Coal mining and processing 100.00 100.00 83.25 16.75

8 07008 Crude petroleum and natural gas mining 100.00 100.00 95.15 4.85

9 08009 Ferrous ore mining 100.00 100.00 97.34 2.66

10 09010 Non-ferrous ore mining 100.00 100.00 100.96 -0.96

11 10011 Salt mining 100.00 100.00 91.58 8.42

12 10012 Non-metal minerals and other mining 100.00 100.00 95.96 4.04

13 13013 Grain mill products 99.60 0.40 99.60 0.40 48.44 51.56

14 13014 feed products 1.50 98.50 1.50 98.50 98.36 1.64

15 13015 vegetable oil and forage 69.91 30.09 96.33 3.67 51.74 48.26

16 13016 Sugar refining 64.16 35.84 92.82 7.18 66.03 33.97

17 13017

Slaughtering , meat processing, eggs and dairy 

products 15.65 84.35 19.48 80.52 48.12 51.88

18 13018 Prepared fish and seafood 36.64 63.36 91.29 8.71 36.32 63.68

19 13019 Other food products 57.52 42.48 64.66 35.34 19.31 80.69

20 15020 Wines, spirits and liquors 6.85 93.15 15.88 84.12 49.91 50.09

21 15021 Non-alcoholic beverage 5.25 94.75 9.94 90.06 37.94 62.06

22 16022 Tobacco products 0.00 100.00 0.00 100.00 32.56 67.44

23 17023 Cotton textiles 99.98 0.02 99.98 0.02 91.91 8.09

24 17024 Woolen textiles 97.98 2.02 98.44 1.56 89.37 10.63

25 17025 Hemp and silk textiles 100.00 100.00 80.52 19.48

26 17026 textiles products 96.08 3.92 97.60 2.40 80.19 19.81

27 17027 Knitted mills 89.19 10.81 92.14 7.86 60.20 39.80

28 18028 Wearing apparel 0.32 99.68 97.04 2.96 29.63 70.37

29 19029 Leather, furs, down and related products 96.37 3.63 99.59 0.41 52.50 47.50

30 20030

Sawmills and products of wood, bamboo, cane, palm, 

straw, etc. 100.00 100.00 97.43 2.57

31 21031 Furniture 70.73 29.27 72.79 27.21 62.03 37.97

32 22032 Paper and products 99.72 0.28 99.78 0.22 94.09 5.91

33 23033 Printing and record medium reproduction 36.23 63.77 38.07 61.93 95.43 4.57

34 24034 Cultural goods 93.15 6.85 94.76 5.24 80.82 19.18

35 24035 Toys, sporting and athletic and recreation products 9.61 90.39 54.96 45.04 18.92 81.08

36 25036 Petroleum refining 99.99 0.01 99.99 0.01 98.51 1.49

37 25037 Coking 100.00 100.00 93.66 6.34

38 26038 Raw chemical materials 100.00 100.00 96.46 3.54

39 26039 Chemical fertilizers 100.00 100.00 100.27 -0.27

40 26040 Chemical pesticides 100.00 0.73 99.27 97.98 2.02

41 26041 Dye, printing oil and similar products 99.79 0.21 99.96 0.04 101.82 -1.82

42 26042 Organic chemical products 100.00 100.00 99.18 0.82

43 26043 specialized chemical products 76.83 23.17 98.36 1.64 98.31 1.69

44 26044 Chemical products for daily use 71.95 28.05 77.88 22.12 59.97 40.03

45 27045 Medical and pharmaceutical products 53.55 46.45 53.55 46.45 68.03 31.97

46 28046 Chemical fibers 100.00 100.00 98.69 1.31

47 29047 Rubber products 95.48 4.52 97.95 2.05 88.63 11.37

48 30048 Plastic products 82.37 17.63 93.00 7.00 93.70 6.30

49 31049 Cement 100.00 100.00 86.59 13.41

50 31050 Glass and glass products 98.27 1.73 99.21 0.79 94.34 5.66
12

51 31051 Pottery, china and earthenware 98.75 1.25 98.79 1.21 89.79 10.21

52 31052 Fireproof products 100.00 100.00 95.22 4.78

53 31053 Other non-metallic mineral products 99.67 0.33 99.81 0.19 106.35 -6.35

54 32054 Iron-smelting 100.00 100.00 95.11 4.89

55 32055 Steel-smelting 100.00 100.00 99.70 0.30

56 32056 Steel processing 100.00 100.00 96.77 3.23

57 32057 Alloy iron smelting 100.00 100.00 100.36 -0.36

58 33058 Nonferrous metal smelting 100.00 100.00 98.61 1.39

59 33059 Nonferrous metal processing 100.00 100.00 99.09 0.91

60 34060 Metal products 66.94 33.06 75.02 24.98 91.15 8.85

61 35061 Boiler, engines and turbine 67.96 32.04 76.95 23.05 61.53 38.47

62 35062 Metalworking machinery 12.64 87.36 12.65 87.35 44.92 55.08

63 35063 Other general industrial machinery 41.13 58.87 56.45 43.55 82.15 17.85

64 36064

Agriculture, forestry, animal husbandry and fishing 

machinery 6.66 93.34 6.66 93.34 39.82 60.18

65 36065 Other special industrial equipment 16.52 83.48 16.91 83.09 34.06 65.94

66 37066 Railroad transport equipment 5.35 94.65 5.35 94.65 50.99 49.01

67 37067 Motor vehicles 1.11 98.89 1.27 98.73 45.01 54.99

68 37068 automobile parts 100.00 100.00 95.49 4.51

69 37069 Ship building 46.73 53.27 46.81 53.19 67.17 32.83

70 37071 Other transport machinery 16.66 83.34 16.67 83.33 38.67 61.33

71 39072 Generators 25.77 74.23 47.89 52.11 65.44 34.56

72 39073 Household electric appliances 24.37 75.63 24.67 75.33 44.78 55.22

73 39074 Other electric machinery and equipment 55.92 44.08 65.45 34.55 92.12 7.88

74 40075 Communication equipment 45.02 54.98 45.10 54.90 38.42 61.58

75 40076 Electronic computer 100.00 0.22 99.78 48.52 51.48

76 40077 Electronic appliances 100.00 2.58 97.42 78.35 21.65

77 40078 Electronic element and device 99.59 0.41 99.74 0.26 98.71 1.29

78 40079 Household video and audio manufacture 29.20 70.80 35.66 64.34 48.56 51.44

79 40080 Other electronic and communication equipment 73.00 27.00 79.53 20.47 52.78 47.22

80 41081 Instruments, meters and other measuring equipment 14.29 85.71 15.21 84.79 80.66 19.34

81 41082 Cultural and office equipment 90.47 9.53 90.49 9.51 80.57 19.43

82 42083 Arts and crafts products 66.12 33.88 82.96 17.04 35.06 64.94

83 42084 Other manufacturing products 59.85 40.15 66.16 33.84 90.97 9.03

84 43085 Scrap and waste 100.00 100.00 97.76 2.24

86 45087 Gas production and supply 100.00 100.00 56.37 43.63

98 59099 Post 100.00 100.00 63.30 36.70

119 88120 Culture and arts, radio, film and television 44.81 55.19 45.30 54.70 34.32 65.68

99999 100.00 98.72 1.28

total 59.70 40.30 63.78 36.22 74.20 25.80
13

Share of intemediate and final good identified by different methods - China's imports from the World, 2002

ioid IOCode description intshbec finshbec intshdfw finshdfw Intshio Finshio

1 01001 Crop cultivation 89.08 10.92 90.08 9.92 62.35 37.65

2 02002 Forestry 100.00 100.00 83.65 16.35

3 02003 Livestock and livestock products 100.00 100.00 97.68 2.32

4 03004 Fishery 97.19 2.81 97.19 2.81 39.19 60.81

5 04005 Other agricultural products 72.34 27.66 73.45 26.55 50.11 49.89

6 05006

Technical services for agriculture, forestry, livestock and 

fishing 8.16 91.84 16.85 83.15 74.52 25.48

7 06007 Coal mining and processing 100.00 100.00 83.25 16.75

8 07008 Crude petroleum and natural gas mining 100.00 100.00 95.15 4.85

9 08009 Ferrous ore mining 100.00 100.00 97.34 2.66

10 09010 Non-ferrous ore mining 100.00 100.00 100.96 -0.96

11 10011 Salt mining 100.00 100.00 91.58 8.42

12 10012 Non-metal minerals and other mining 100.00 100.00 95.96 4.04

13 13013 Grain mill products 91.64 8.36 94.49 5.51 48.44 51.56

14 13014 feed products 1.10 98.90 1.10 98.90 98.36 1.64

15 13015 vegetable oil and forage 95.05 4.95 95.67 4.33 51.74 48.26

16 13016 Sugar refining 85.75 14.25 98.53 1.47 66.03 33.97

17 13017 Slaughtering , meat processing, eggs and dairy products 28.89 71.11 32.30 67.70 48.12 51.88

18 13018 Prepared fish and seafood 31.29 68.71 84.11 15.89 36.32 63.68

19 13019 Other food products 39.15 60.85 47.83 52.17 19.31 80.69

20 15020 Wines, spirits and liquors 2.00 98.00 16.29 83.71 49.91 50.09

21 15021 Non-alcoholic beverage 11.07 88.93 19.39 80.61 37.94 62.06

22 16022 Tobacco products 88.71 11.29 88.77 11.23 32.56 67.44

23 17023 Cotton textiles 99.94 0.06 99.99 0.01 91.91 8.09

24 17024 Woolen textiles 99.75 0.25 99.90 0.10 89.37 10.63

25 17025 Hemp and silk textiles 99.92 0.08 99.99 0.01 80.52 19.48

26 17026 textiles products 95.00 5.00 97.92 2.08 80.19 19.81

27 17027 Knitted mills 73.10 26.90 96.71 3.29 60.20 39.80

28 18028 Wearing apparel 0.38 99.62 86.24 13.76 29.63 70.37

29 19029 Leather, furs, down and related products 95.71 4.29 97.57 2.43 52.50 47.50

30 20030

Sawmills and products of wood, bamboo, cane, palm, straw, 

etc. 100.00 100.00 97.43 2.57

31 21031 Furniture 60.71 39.29 70.57 29.43 62.03 37.97

32 22032 Paper and products 99.55 0.45 99.67 0.33 94.09 5.91

33 23033 Printing and record medium reproduction 63.44 36.56 73.64 26.36 95.43 4.57

34 24034 Cultural goods 83.53 16.47 92.20 7.80 80.82 19.18

35 24035 Toys, sporting and athletic and recreation products 19.07 80.93 78.60 21.40 18.92 81.08

36 25036 Petroleum refining 99.53 0.47 99.53 0.47 98.51 1.49

37 25037 Coking 100.00 100.00 93.66 6.34

38 26038 Raw chemical materials 100.00 100.00 96.46 3.54

39 26039 Chemical fertilizers 100.00 100.00 100.27 -0.27

40 26040 Chemical pesticides 100.00 3.22 96.78 97.98 2.02

41 26041 Dye, printing oil and similar products 99.87 0.13 99.97 0.03 101.82 -1.82

42 26042 Organic chemical products 100.00 100.00 99.18 0.82

43 26043 specialized chemical products 86.47 13.53 98.15 1.85 98.31 1.69

44 26044 Chemical products for daily use 76.12 23.88 83.26 16.74 59.97 40.03

45 27045 Medical and pharmaceutical products 39.09 60.91 39.11 60.89 68.03 31.97

46 28046 Chemical fibers 100.00 100.00 98.69 1.31
14

47 29047 Rubber products 86.04 13.96 96.30 3.70 88.63 11.37

48 30048 Plastic products 76.71 23.29 95.05 4.95 93.70 6.30

49 31049 Cement 100.00 100.00 86.59 13.41

50 31050 Glass and glass products 97.58 2.42 98.82 1.18 94.34 5.66

51 31051 Pottery, china and earthenware 90.95 9.05 94.26 5.74 89.79 10.21

52 31052 Fireproof products 100.00 100.00 95.22 4.78

53 31053 Other non-metallic mineral products 98.94 1.06 99.23 0.77 106.35 -6.35

54 32054 Iron-smelting 100.00 100.00 95.11 4.89

55 32055 Steel-smelting 100.00 100.00 99.70 0.30

56 32056 Steel processing 100.00 100.00 96.77 3.23

57 32057 Alloy iron smelting 100.00 100.00 100.36 -0.36

58 33058 Nonferrous metal smelting 100.00 100.00 98.61 1.39

59 33059 Nonferrous metal processing 100.00 100.00 99.09 0.91

60 34060 Metal products 76.49 23.51 79.39 20.61 91.15 8.85

61 35061 Boiler, engines and turbine 72.55 27.45 75.67 24.33 61.53 38.47

62 35062 Metalworking machinery 11.66 88.34 11.68 88.32 44.92 55.08

63 35063 Other general industrial machinery 43.87 56.13 58.95 41.05 82.15 17.85

64 36064 Agriculture, forestry, animal husbandry and fishing machinery 12.52 87.48 12.55 87.45 39.82 60.18

65 36065 Other special industrial equipment 12.30 87.70 13.10 86.90 34.06 65.94

66 37066 Railroad transport equipment 32.36 67.64 32.39 67.61 50.99 49.01

67 37067 Motor vehicles 1.05 98.95 1.56 98.44 45.01 54.99

68 37068 automobile parts 100.00 100.00 95.49 4.51

69 37069 Ship building 45.51 54.49 48.84 51.16 67.17 32.83

70 37071 Other transport machinery 31.43 68.57 31.51 68.49 38.67 61.33

71 39072 Generators 31.16 68.84 71.67 28.33 65.44 34.56

72 39073 Household electric appliances 44.33 55.67 46.82 53.18 44.78 55.22

73 39074 Other electric machinery and equipment 61.88 38.12 82.59 17.41 92.12 7.88

74 40075 Communication equipment 46.70 53.30 50.95 49.05 38.42 61.58

75 40076 Electronic computer 100.00 0.57 99.43 48.52 51.48

76 40077 Electronic appliances 100.00 27.61 72.39 78.35 21.65

77 40078 Electronic element and device 97.75 2.25 99.67 0.33 98.71 1.29

78 40079 Household video and audio manufacture 85.86 14.14 92.91 7.09 48.56 51.44

79 40080 Other electronic and communication equipment 56.05 43.95 57.87 42.13 52.78 47.22

80 41081 Instruments, meters and other measuring equipment 21.33 78.67 53.78 46.22 80.66 19.34

81 41082 Cultural and office equipment 93.86 6.14 94.08 5.92 80.57 19.43

82 42083 Arts and crafts products 84.81 15.19 94.56 5.44 35.06 64.94

83 42084 Other manufacturing products 94.84 5.16 96.78 3.22 90.97 9.03

84 43085 Scrap and waste 100.00 100.00 97.76 2.24

85 44086 Electricity, Steam and hot water production and supply 100.00 100.00 85.47 14.53

86 45087 Gas production and supply 100.00 100.00 56.37 43.63

98 59099 Post 100.00 100.00 63.30 36.70

119 88120 Culture and arts, radio, film and television 45.04 54.96 59.03 40.97 34.32 65.68

99999 100.00 57.12 42.88

total 73.89 26.11 80.03 19.97 74.67 25.33