  In the 1990s, China started a process of structural reforms and of trade
liberalization, which was followed by the accession to the World Trade
Organization (WTO) in 2001. In this paper, we analyze trade patterns of Chinese
firms for the period 2000-2006, characterized by a notable increase in exports
volumes. Theoretically, in a more open economy, firms are expected to move from
the production of a set of less-competitive products towards more
internationally competitive ones, which implies specialization. We study
several stylized facts on the distribution of Chinese firms trade and growth
rates, and we analyze whether firms have diversified or specialized their trade
patterns between 2000 and 2006. We show that Chinese export patterns are very
heterogeneous, that the volatility of growth rates depends on the level of
exports, and that volatility is stronger after trade liberalization. Both,
diversification in products and destinations have a positive impact on trade
growth, but diversification of destinations has a stronger effect. We conclude
that the success of Chinese exports is not only due to an increase in the
intensive margin, related to the existence of economies of scale, but also due
to an increase in the extensive margin, related to the existence of economies
of scope.
