The Chinese export displacement effect revisited: The case of East African Community

China’s rising exports have prompted an empirical literature on whether Chinese exports displace those originated from elsewhere. In this paper we focus on the growth of China’s exports to the East African Community (EAC) countries and show how it has affected exports from the European Union (EU). Our methodological contribution to the literature is a set of total and relative displacement estimates based on different specifications of the gravity model where we control for country-year fixed effects so as to avoid the “gold medal mistake” of not accounting for time varying “multilateral resistance”. Our empirical findings do not support the hypothesis that Chinese exports have displaced exports from other countries including those from the EU. These results suggest that competition on the EAC market has not been a zero-sum game among different exporting countries ; JRC.D.4 - Economics of the Food System