Since the global crisis, China's foreign trade is no longer driven by its involvement in the global supply chains (i.e. by processing trade) but its dynamics stems from China’s own domestic demand and supply. For foreign funded enterprises, China is less and less a production base for export...

Our work contributes to the literature relating output structure and economic development by showing that growth gains from upgrading are not unconditional. Relying on data from a panel of Chinese cities, we show that the level of capabilities available for domestic firms operating in ordinary...