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Regulated Efficiency, World Trade Organization Accession, and the Motor Vehicle Sector in China

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  • Joseph F. Francois

    (Department of Economics, Erasmus Universiteit Rotterdam, and CEPR)

  • Dean Spinanger

    (Institute for World Economics, Kiel)

Abstract

This paper is concerned with the interaction of regulated efficiency and World Trade Organization (WTO) accession and its impact on China’s motor vehicle sector. The analysis is conducted using a 23 sector–25 region computable general equilibrium model. Regulatory reform and internal restructuring are found to be critical. Restructuring is represented by a cost reduction following from consolidation and rationalization that moves costs toward global norms. Without restructuring, WTO accession means a surge of final imports, though imports of parts could well fall as production moves offshore. However, with restructuring, the final assembly industry can be made competitive by world standards, with a strengthened position for the industry.

Suggested Citation

  • Joseph F. Francois & Dean Spinanger, 2004. "Regulated Efficiency, World Trade Organization Accession, and the Motor Vehicle Sector in China," Tinbergen Institute Discussion Papers 04-049/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20040049
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    References listed on IDEAS

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    1. Wei Zhang & Robert Taylor, 2001. "EU TECHNOLOGY TRANSFER TO CHINA: The automotive industry as a case study," Journal of the Asia Pacific Economy, Taylor & Francis Journals, vol. 6(2), pages 261-274.
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    Cited by:

    1. Elena Ianchovichina & Terrie Walmsley, 2005. "Impact of China's WTO Accession on East Asia," Contemporary Economic Policy, Western Economic Association International, vol. 23(2), pages 261-277, April.
    2. Anderson, Kym & Huang, Jikun & Ianchovichina, Elena, 2004. "Will China's WTO accession worsen farm household incomes?," China Economic Review, Elsevier, vol. 15(4), pages 443-456.
    3. William Jefferies, 2021. "China’s Accession to the WTO and the Collapse That Never Was," Review of Radical Political Economics, Union for Radical Political Economics, vol. 53(2), pages 300-319, June.
    4. Elena IANCHOVICHINA & Will MARTIN, 2006. "Trade Impacts of China's World Trade Organization Accession," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(1), pages 45-65, June.
    5. Deqiang Liu & Yanyun Zhao, 2006. "Ownership, Foreign Investment and Productivity--A Case Study of the Automotive Industry in China," Microeconomics Working Papers 21892, East Asian Bureau of Economic Research.

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    More about this item

    Keywords

    China Accession to WTO; Automobile Sector;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation

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