An approach of reducing overall level of export fluctuations of the export-oriented countries

Overall level of export fluctuations of the export-oriented countries with rising export volume partly stem from the market failure caused by free choice of export enterprises, some government intervention thus may be necessary. To reduce the level of fluctuations of the export growth rates in these countries, this paper, taking the significant differences of the exports among various markets into account and thus using a new index named relative variance to measure the export volatility risks, proposes a model of merchandise market portfolio, a modified version of Markowitz model, available to provide explicit guidelines for the firms, the industries and even the whole country to optimize the structure of their export markets. An application of this model to the case of China's apple is then discussed. The results show that the market share of China’s apple in 7 sub-markets should be redistributed drastically.