China's skill-biased imports

China has witnessed rapid increases in the skill premium over last few decades. In this paper, we study short-run effect of capital goods imports on China. The surge imports, which embody advanced technology, can explain rising demand for We exploit regional variations import exposure stemming from initial differences structure and instrument growth using exchange rate movements. A city at 75th percentile distribution a higher by 5 percentage points (0.38 standard deviation) one 25th percentile. To explore underlying mechanism, provide firm-level evidence show that imported are skill-complementary.