Are U.S. Exports Different from China's Exports? Evidence from Japan's Imports

Abstract

Are U.S. exports different from China's exports? If so, how? This paper attempts to answer this question, focusing on the quality, variety, and overlap of their products. Using product-level manufacturing import data from Japan, I find that the exports of China and the United States are similar in terms of variety. More than 85 percent of U.S. export products to Japan are commonly exported from China. However, U.S. exports are different from China's exports in terms of quality. A comparison with the European Union (EU) shows that U.S. exports are similar to EU exports in terms of both quality and variety when compared to China's exports. These results suggest that quality matters. Both the EU and the United States are better endowed with the factors needed to produce quality or are relatively more productive in producing quality products than China.