CATO JOURNAL FIGURE I REAL EFFECTIVE EXCHANGE RATE OF THE RMB 1994 march2006 993988容88净 FIGURE 2 CHINAS GDP GROWTH. 1994-2005 10% 199419951996199719981999200020012002200320042005 mean that the Chinese economy is"export led "Adjusting for the relatively low domestic content of exports makes China's"true"ex- port exposure lower than suggested by the headline export-to-GDP ratio. Anderson(2005a) goes on to argue that one salient character- istic of an export-led economy is that fluctuations in trade growth should be similar to those in broader GDP growth--whereas an economy that relies more on domestic demand for growth would display fluctuations in gDP growth that were considerably smallermean that the Chinese economy is “export led.” Adjusting for the relatively low domestic content of exports makes China’s “true” ex￾port exposure lower than suggested by the headline export-to-GDP ratio. Anderson (2005a) goes on to argue that one salient character￾istic of an export-led economy is that fluctuations in trade growth should be similar to those in broader GDP growth—whereas an economy that relies more on domestic demand for growth would display fluctuations in GDP growth that were considerably smaller FIGURE 1 REAL EFFECTIVE EXCHANGE RATE OF THE RMB, 1994–MARCH 2006 FIGURE 2 CHINA’S GDP GROWTH, 1994–2005 CATO JOURNAL 256