Cross-border E-commerce and China's Exports during the COVID-19 Pandemic

Abstract

China's exports experienced a rapid recovery after the outbreak of the 2019 COVID-19 pandemic. A primary engine was cross-border e-commerce (CBEC) trade, which bucked the downward export trend during the pandemic. By exploring the variation in the number of CBEC comprehensive pilot zones across provinces, we identified the causal impact of CBEC on exports using monthly province–product–destination data for 2019 and 2020. We found strong and robust evidence that CBEC contributed to exports during the pandemic by promoting the expansion of incumbent exports (intensive margin) rather than through the expansion of product categories and exporting partners (extensive margin). Specifically, higher pandemic risk suppressed the role of CBEC at the intensive margin while enhancing it at the extensive margin. Exports to developed countries benefited more from CBEC, both intensively and extensively. Compared with final products, a larger number of intermediate products were exported through CBEC after the outbreak of the pandemic.