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THE EFFECTS OF FOREIGN DEMAND SHOCKS ON CHINA'S EXPORTS

ZHANG Yan-hong(School of Economics,Renmin University of China,Beijing 100872,China)  
China's unique economic growth model renders it vulnerable to adverse changes in external economic environment,with foreign demand shock being an important channel.Empirical results from this study demonstrate that on one hand China's exports were driven by foreign demand,and on the other hand the competitiveness of China's exports depended on its cost advantages.Given the recent rises in its export costs and the economic downturn occurring in its major export markets,in order to stabilize its export growth,in the short run China needs to readjust its export tariff rebate rates and stabilize Renminbi(RMB)'s appreciation,and in the long run promote technological advances.
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