Industry-Level Export Impacts on China’s and Pakistan’s Economic Growth

Abstract

This study investigates the comparative advantage of disaggregated industrial exports, including agriculture, manufacturing, services, and technology on the economic growth of China and Pakistan using linear ARDL models. The findings confirm significant long-run relationships between industrial exports and economic growth in both countries. In China, agricultural, manufacturing, and technology exports contribute positively and significantly to economic expansion in both the short and long term, reflecting its strong comparative advantage, driven by advanced technology, robust infrastructure, and effective government policies. Conversely, agricultural and manufacturing exports in Pakistan show a positive but comparatively weaker impact, while technology and service exports remain largely insignificant. The results highlight Pakistan's need to enhance its technological capabilities, diversify its export base, and improve its infrastructure to strengthen its international competitiveness. Policy recommendations include investing in research and development, improving export quality standards, facilitating market access, and supporting human capital development. Drawing on China's successful experience, Pakistan should adopt export-oriented strategies emphasizing innovation, industrial diversification, and global integration to achieve sustainable economic growth. Overall, the study underscores the critical role of disaggregated industrial exports in driving economic performance and suggests that adopting targeted reforms could help Pakistan bridge the gap and strengthen its position in global trade.