Chinese Exports and Non-Tariff Measures: Testing for Heterogeneous Effects at the Product Level

Abstract

With international trade tariffs at historically low levels today, non-tariff measures (NTMs) play an important-and growing-role in global trade policy. Concerns about shifts in global trade policy agendas are on the rise. In this paper, we rely on a gravity model and focus on Chinese exports with two aims: the first is to test for heterogeneous effects of technical NTMs versus non-technical NTMs; the second is to verify whether the NTM's effect is influenced by the type of good (final good vs. intermediate or capital good). We find that: 1) technical NTMs tend to have positive effects on trade flows, potentially driven by improvements in consumers' confidence and by the technical capacities of Chinese exporters and 2) non-technical NTMs are particularly stringent for final goods, possibly due to political economy reasons or substitution effects.