Based on a new panel data set covering exports of four Chinese port cities to 32 countries and Hong Kong over the period of 1997{2008, this paper extends the conventional gravity model to assess the impacts of transport costs and port eciency on China's exports. The results can be summarized as three main ndings: (1) The improvements of port eciency and reduction of road transport costs play a vital role in China's export competitiveness in the global market. The coecient estimates on them are relatively large, around 0.72 and ??0:89, respectively; (2) The eect of transport costs and port eciency on China-to-Asia exports signicantly exceeds that on China-to-Europe and China-to-America exports; (3) The overall estimated elasticity of road, railroad and port measure is 1.66, which is almost three times that of the average wage of port cities. The empirical results provide strong evidences that upgrading China's transport service networks should oer greater scope for maintaining and increasing its competitive edge in low cost productions. The ndings oer some
insights and priorities for government policy making.