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The impact of China's accession to the WTO on its economy: an imperfect competitive CGE analysis

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  • Hong Zhang

Abstract

To examine the impact of trade barrier reductions on the Chinese economy following its WTO accession, a single-country, static CGE (Computable General Equilibrium) model is constructed, which incorporates certain elements of imperfect competition in China's current economic situation. China's real GDP and total employment are expected to rise by small degrees, while the general price level may decline by a few percentage points. Total imports would rise by more than 10%, whereas total exports would increase far less. China's trade surplus is, therefore, likely to shrink substantially and its dependence upon foreign trade is likely to rise by a few percentage points. A sensitivity analysis confirms the robustness of the simulation results. A comparison with other CGE studies on China's trade liberalization also shows the plausibility of this study's predictions. JEL Classification: F17, C68

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  • Hong Zhang, 2004. "The impact of China's accession to the WTO on its economy: an imperfect competitive CGE analysis," International Economic Journal, Taylor & Francis Journals, vol. 18(1), pages 119-137.
    • Handle: RePEc:taf:intecj:v:18:y:2004:i:1:p:119-137
    DOI: 10.1080/10168730410001684596
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    References listed on IDEAS

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    1. Ge, Jianping & Lei, Yalin & Tokunaga, Suminori, 2014. "Non-grain fuel ethanol expansion and its effects on food security: A computable general equilibrium analysis for China," Energy, Elsevier, vol. 65(C), pages 346-356.
    2. Guo, Zhichao & Feng, Yuanhua & Tan, Xiangyong, 2011. "Short- and long-term impact of remarkable economic events on the growth causes of China–Germany trade in agri-food products," Economic Modelling, Elsevier, vol. 28(6), pages 2359-2368.
    3. Ghosh, Madanmohan & Rao, Someshwar, 2010. "Chinese accession to the WTO: Economic implications for China, other Asian and North American economies," Journal of Policy Modeling, Elsevier, vol. 32(3), pages 389-398, May.
    4. Ge, Jianping & Lei, Yalin, 2017. "Policy options for non-grain bioethanol in China: Insights from an economy-energy-environment CGE model," Energy Policy, Elsevier, vol. 105(C), pages 502-511.

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    More about this item

    Keywords

    China; trade liberalization; CGE model; imperfect competition;
    All these keywords.

    JEL classification:

    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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