Chinese exporters boost productivity by switching to less capital-intensive products.
Chinese exporters tend to use less capital-intensive methods after starting to export, unlike firms in other countries. This is because they focus on making products that require more labor instead. More productive firms see a smaller drop in capital use when they start exporting, but those that decrease capital use more actually become more productive overall. Chinese exporters tend to add new products that need less capital and stop making products that need more capital over time.