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Changing Global High-Technology Trade Patterns

Two global recessions notwithstanding, total export volume of high-technology products increased at an 8% annual rate from 1998 to 2010, not accounting for inflation. This ranged from a low of 2% for Japan to a high of 19% for China, with the United States and EU in the 5%–7% range. The increase reflects a number of developments: growing international capacity for high-technology manufacturing, expansion of multinational companies' overseas production, and growing reliance on specialized and geographically dispersed supplier networks.

China became the largest single high-technology exporter in 2006 and, together with the Asia-8, has since accounted for about half of total world exports in high-technology goods. After relatively prolonged slowdowns following the 2001 global recession, China and Asia-8 high-technology exports accelerated until sharp declines in 2009, which were followed immediately by expansion beyond the 2008 levels. The general patterns were similar for the United States and the EU, but with a less complete recovery for the EU. Japan's high-technology exports have been flat, not accounting for inflation, for a decade or more (figure O-33).

These changes have affected the relative positions of the developed and developing countries. China's share of world high-technology exports increased from 7% in 1998 to 22% in 2010, while the Asia-8 share dropped to 26% in 2009 before easing upward again. Shares of the United States, EU, Japan, and the rest of the world—mostly developing countries—were flat or declined (figure O-34).

An Asian high-technology supplier zone has developed that is largely arrayed around China. The shift in output of high-technology goods toward developing Asian economies has been accompanied by the growth of intraregional supplier relationships that provide intermediate goods, many for further assembly and eventual export. The share of Asia-8 high-technology exports going directly to the United States and the EU declined from more than 50% to under 30%, while exports to China rose from 10% to 37% of their total (figure O-35).

China's high-technology exports withstood the global recession very well. Slowing sharply from double-digit to high single-digit growth in 2007–08, they declined by 9% in 2009 but rose by 22% in 2010. After 2009, China's high-technology exports to the United States jumped from $107 billion to $137 billion. Similarly large increases were evident for other export destinations (figure O-36).