Abstract:

It hasn’t been systematically examined whether and how digital service trade barriers have an impact on the quality upgrade of China’s manufacturing exports. Based on the technical relationship between the intermediate input of upstream digital services and the output of downstream manufacturing, this paper calculates the country-manufacturing industry-level digital service trade restriction index, and then makes an empirical analysis of the above issues. The results show that the increase of digital service trade barriers has a significant inhibitory effect on the quality upgrade of China’s manufacturing exports, and the negative effects of increased restrictive measures in the fields of facilities and connections, payment systems are particularly significant. The impact of digital service trade barriers is heterogeneous across countries and industries, that is, there is an inhibitory effect mainly on the quality of exports of developed countries on the one hand, and capital-intensive and labor-intensive manufacturing exports on the other. Further analysis shows that the increase in FDI and R&D can weaken the negative impact of digital service trade barriers on the quality upgrade of China’s manufacturing exports. At the same time, the higher the quality of China's manufacturing exports, the stronger the negative effect of digital service trade barriers. Therefore, to promote high-quality development of China’s foreign trade, China should make great efforts to reduce global digital service trade barriers, increase the R&D of digital technology in the manufacturing industry, and improve FDI policies related to the digital industry.

Key words: digital service trade, trade barrier, export product quality, manufacturing industry