Title: Export-Led Growth Strategies Through History
Headings: Export-Led Growth Strategies Through History
Export-Led Growth Strategies Through History
What Is an Export-Led Growth Strategy?
Key Takeaways
Understanding Export-Led Growth
The Era of Export-Led Growth
Example of Export-led Growth
Fast Fact

Content: Rather than using export promotion to facilitate the development of domestic industry, the new model for developing nations became a platform for multinational corporations (MNCs) for the setting up of low-cost production centers to provide cheap exports to the developed world. While developing nations benefited from the creation of new jobs as well as technology transfer, the new model hurt the domestic industrialization process. This new paradigm was expanded more globally through the establishment of the World Trade Organization (WTO) in 1995. China’s admission into the WTO in 2001 and its export-led growth is an extension of Mexico’s model. 4 ﻿ However, China was much more successful in leveraging the benefits of greater openness to international trade than Mexico and other Latin American countries. Perhaps this is partly due to its greater use of import tariffs, stricter capital controls, and its strategic skill in adopting foreign technology to build its own domestic technological infrastructure. Regardless, China was dependent on MNCs around 2011, when 52.4% of Chinese exports come from foreign-owned firms, and those firms accounted for 84.1% of trade surplus. 5 ﻿
More recently, the threat of a trade war between the United States and China have caused MNCs based in China to rethink their positions. On the one hand, they face possible disruption to operations in China and a possible lack of inputs. On the other hand, relocating to other low wage countries is not ideal because countries such as Vietnam and Cambodia lack the technological capabilities and human skill sets that China possesses.