What’s so special about China’s exports? They are too sophisticated.

One special characteristic of Chinese exports is that they are too technologically sophisticated for a typical developing country at this stage of development. Certainly it is sometimes foreign parent companies that control the most value-adding stage of the production chain of these products, and Chinese may not contribute that much technologically, there are benefits associated with such an export pattern.

According to new study Harvard professors Ricardo Hausmann, Jason Hwang, and Dani, this export pattern is beneficial to China’s future growth, because knowledge can spillover from these sophisticated productions, while in countries specialize in commodity exporting, they may not have a chance to learn at all.

What You Export Matters (pdf file)
When local cost discovery generates knowledge spillovers, specialization patterns become partly indeterminate and the mix of goods that a country produces may have important implications for economic growth. We demonstrate this proposition formally and adduce some empirical support for it. We construct an index of the "income level of a country's exports," document its properties, and show that it predicts subsequent economic growth.

Also see their case study of China:
What’s so special about China’s exports? (pdf file)