2004年-世界发展银行全球_Impacts_of_Chinas_Accession_to_the_World_Trade_Organization_26页_183kb

Summary of "Impacts of China's Accession to the World Trade Organization"

Core Content

This article by Elena Ianchovichina and Will Martin evaluates the economic impacts of China's accession to the World Trade Organization (WTO), focusing on trade reforms and labor market dynamics. The analysis uses a computable general equilibrium (CGE) model adjusted to reflect China's specific economic conditions, including export processing arrangements and labor market barriers.

Main Policy Changes and Reforms

Trade Policy Reforms

• Tariff Reductions: China significantly reduced its average tariff rates during the 1990s, with the weighted average statutory tariff rate dropping from 40.6% in 1992 to 12.0% in 2001. Further reductions are expected post-accession.
• Nontariff Barriers: The coverage of nontariff barriers decreased from 32.5% in 1996 to 21.6% in 2001. These barriers included licenses, quotas, and state trading, with a notable decline in tendering requirements.
• Export Processing Arrangements: China's export-oriented industries benefited from duty-free imports of intermediate goods, which were used extensively in the production of exports. This significantly affected trade flows and sectoral output.
• Agricultural Reforms: Agricultural protection was reduced, though some commodities, like rice and wheat, remained under negative protection. The abolition of export subsidies on feedgrains and plant-based fibers was a key part of the accession agreement.

Labor Market Policies

• Mobility Barriers: Significant barriers to rural-urban labor mobility exist due to requirements like the urban residence permit (bukou) and the inability to sell rural land. These barriers are modeled as an implicit tax on nonagricultural employment.
• Skill Differences: Urban workers generally have higher wages and skills than rural workers, leading to distributional impacts from trade liberalization.
• Labor Transformation Model: The model incorporates an imperfect transformation between agricultural and nonagricultural labor, using a constant elasticity of transformation (σ = 1.32) to reflect the difficulty of transitioning labor from rural to urban areas.

Key Economic Impacts

• China's Gains: China is estimated to be the largest beneficiary of WTO accession, gaining approximately $31 billion annually from trade reforms before accession and an additional $10 billion after accession.
• Trading Partners: Major trading partners such as North America, Western Europe, and Taiwan (China) also experienced gains due to their own liberalization efforts.
• Sectoral Benefits: Manufacturing sectors, particularly textiles and apparel, saw substantial benefits from the removal of export quotas and duty-free imports.
• Distributional Effects: Trade liberalization led to real wage increases for both skilled and unskilled nonfarm workers, while farm workers faced relatively lower wages. This created a shift in labor from agriculture to manufacturing and services.
• Poverty and Inequality: The study suggests that improved labor mobility and rural education could mitigate negative impacts and improve poverty and inequality outcomes, with an estimated 1 million additional farm workers leaving agriculture.

Methodology and Model Adjustments

• The analysis uses the GTAP-DD model, which incorporates China's unique export processing arrangements and labor market features.
• The model allows for two distinct activities per sector: one for domestic production and one for export-oriented production, reflecting different input mixes.
• The study accounts for the elasticity of substitution between domestic and imported goods and includes a detailed representation of labor market distortions.
• It highlights the importance of considering both tariff and non-tariff reforms, as well as the impact of labor mobility on overall economic outcomes.

Conclusion and Policy Implications

• The study provides a comprehensive estimate of the economic effects of China's WTO accession, emphasizing the role of trade and labor reforms.
• While some developing economies may face small losses due to competition with China, the overall impact is positive for China and its trading partners.
• The authors suggest that complementary policies, such as improving rural education and reducing labor mobility barriers, could enhance the benefits of WTO accession and support sustainable economic development in China.

Key Findings

• Trade Liberalization: Substantial merchandise trade liberalization occurred in China from 1995 to 2001, with significant reductions in tariffs and nontariff barriers.
• Sectoral Impact: Manufacturing and services sectors, especially textiles, apparel, and automobiles, are expected to see the most significant gains.
• Agricultural Protection: Reductions in agricultural protection were less than previously estimated due to the persistence of negative protection on certain commodities.
• Labor Market Dynamics: The model shows that labor mobility is constrained, leading to potential inefficiencies and distributional shifts, which can be mitigated through policy reforms.

References and Data Sources

• The study draws on data from the GTAP version 5 database and China's customs statistics.
• It incorporates findings from previous studies by Ianchovichina and Martin (2001), Wang (2003), and Sicular and Zhao (2004).
• The analysis is part of a joint World Bank-Development Research Centre study, with data provided by Prashant Dave and Zhi Wang.