Gains from trade or from catching-up? Value creation and distribution in the era of China’s WTO accession

In this article we focus on the role of exports in Chinese economic development in the era of WTO accession. We address a series of different, although connected, questions. First, do Chinese exporting and non-exporting firms differ in terms of their productivity performance and paid wages? Second, to what extent exporting and non-exporting firms have contributed to the process of convergence and catching-up? Third, does the productivity-wage pass-through differ between exporting and non-exporting firms? Overall our findings downplay the role of exporting firms as both carriers of labor productivity and wage growth for the Chinese economy. In this respect, “gains from catching-up” outweigh any “gain from trade”.