China's Export Surge and World Poverty

Abstract

This paper addresses the impact of imports from China on the importer countries' poverty levels. We posit that imports from China equal to or over a certain threshold level such as 2%, i.e., the ratio of a country's imports from China to its total imports is equal to or greater than 2% on average over the estimation period; could contribute to the decrease in the poverty levels of the importer countries. Using cross-section fixed and random effect regressions and data from 1994 to 2006, we report evidence that increases in the share of one country's imports from China is associated with higher Human Development Index and higher per capita GNP (both indicators of poverty). The obtained result holds for low-income countries as well.