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GTAP Resource #1219

"Estimating the Effects of China’s Accession to the WTO"
by Yinhua, Mai, Mark Horridge and Frances Perkins

The most remarkable change the WTO accession brings to China is the opening up to Foreign Direct Investment of pillar manufacturing and services industries that have been monopolized or dominated by State Owned Enterprises. This study analyses the effects of this change using a Computable General Equilibrium model of China. The study draws on China’s experience in the early 1990s when state capital withdrew from light manufacturing industries leading to a massive inflow of foreign direct investment. In contrast to most general equilibrium analysis focusing on tariffs and non-tariff barriers, this study concludes that WTO accession will not threaten the health of China’s pillar industries. Opening up of the pillar industries to non-state capital will bring about improvement in productivities following the inflow of foreign direct investment into these industries. WTO accession thus positions China to become an important production base of not only light manufacturing industries, but also the more capital-intensive industries.

Resource Details (Export Citation) GTAP Keywords
Category: GTAP Application
2003 Conference Paper
Status: Published
By/In: Presented at the 6th Annual Conference on Global Economic Analysis, The Hague, The Netherlands
Date: 2003
Created: Bacou, M. (4/23/2003)
Updated: Yinhua, M. (7/29/2004)
Visits: 4,166
- Asia (East)

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