CESEE and the Impact of China and Russia
Edited by Ewald Nowotny, Peter Mooslechner and Doris Ritzberger-Grünwald
Chapter 10: Competition in the EU-15 market: CESEE, China and Russia
Producing exportable products for the most highly industrialized markets has shaped many emerging economies’ growth paths since World War II. With the fall of the central planning system in the late 1980s and early 1990s, the countries of Central, Eastern and South-Eastern Europe (CESEE) embarked on such a growth path. Their exports have mainly targeted the Western European countries, the EU-15, which have since become highly contested, even in times of strong world market growth. Thus the question of competitiveness has become crucial, above all in the face of an expected decline in world demand for imports. Therefore we investigate the competitiveness of CESEE – compared with that of China and Russia – in terms of their ‘ability to sell’, that is, their exports to the EU-15 market. How did the exports from CESEE, China and Russia perform in the EU-15 market from 1995 to 2010? What has driven the growth of exports of the three regions to the EU-15? Were these exports complementary or did they crowd each other out? While there is ample literature on the trade competitiveness and comparative advantages of these three regions, we provide a direct comparison of their export performance in the EU-15 market. Our assessment is based on export volumes and the number of trade links at the very disaggregated six-digit Harmonized System (HS) level. That is to say, when we speak of China’s exports to the EU-15, we are actually using EU imports from China (based on Eurostat’s COMEXT database) as our data source and so on. Working with the mirror trade flow ensures that the data are fully comparable across all three regions of interest. Specifically, we analyse export market shares, decompose export growth along two different lines and analyse the number of trade links to find evidence of crowding out at the product level.
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