How China Navigated the Dilemma of Trade Liberalization and Government Revenues

Abstract

Many economists believe that in the long run, the aggregate performance of open economies is better than that of closed ones, and that open policies contribute significantly to economic development. At the same time, many political scientists and policy makers fear that, in the short run, one of the steps towards openness -trade liberalization -may harm government revenues. However, in the 1990s, China successfully navigated the dilemma of trade liberalization and government revenues. In this period, China decreased tariff and non-tariff barriers for WTO accession, but has achieved dramatically increased tariff revenues since 1999. This study explores how China implemented trade liberalization and simultaneously increased tariff revenues in the 1990s. It demonstrates that a series of institutional arrangements, including a reform of Criminal Law, rigorous anti-smuggling activities and a de facto tax imposed on the export sector, successfully curbed smuggling activities through the processing trade, and made foreign-invested manufacturing enterprises the major contributors to the stability of customs revenue. China's case shows that a prosperous, export-oriented and foreign-invested manufacturing sector could potentially provide a developing country with a source of customs revenue.

“Marriage fraud” or social constraint? Reasons for understanding tongzhi and tongqi in mixed‐orientation marriages in China

“…On the other hand, when tongzhi abide by the laws and enter the only legal marriage, they are accused and denounced by the public as dishonest and immoral fraudsters (Guo, 2009;Zhang et al, 2022). Some previous Chinese studies have highlighted the negative impacts of filial piety on marital decisions among tongzhi (Guo, 2009;Hildebrandt, 2018;Li, 2009;Miège, 2009;Tang & Liu, 2014). In particular, the discourse that buxiao yousan, buhou weida ("There are three kinds of unfilial behavior: the greatest is to have no male descendant") is a powerful social norm of filial piety shaping China's lesbian, gay, bisexual, and transgender (LGBT) individuals in terms of gender role attitudes, hierarchical family relationships, marital decisions, and family satisfaction and function (Choi & Luo, 2016;Gui, 2021;Liu et al, 2021;Miège, 2009).…”

“…Additionally, in China, the only legal marriage is between a man and a woman, regardless of sexual orientation. On the other hand, when tongzhi abide by the laws and enter the only legal marriage, they are accused and denounced by the public as dishonest and immoral fraudsters (Guo, 2009;Zhang et al, 2022). Some previous Chinese studies have highlighted the negative impacts of filial piety on marital decisions among tongzhi (Guo, 2009;Hildebrandt, 2018;Li, 2009;Miège, 2009;Tang & Liu, 2014).…”

“…Additionally, in China, the only legal marriage is between a man and a woman, regardless of sexual orientation. On the other hand, when tongzhi abide by the laws and enter the only legal marriage, they are accused and denounced by the public as dishonest and immoral fraudsters (Guo, 2009; Zhang et al., 2022).…”

Trade Openness and Inflation Rate in China: Empirical Evidence from Time Series Data

“…Policymakers introduced various reforms in 1978 to liberalize the foreign trade regime (Hye et al 2016) and expose the Chinese economy to the global economy. The policymakers of the Chinese economy have taken various steps to reduce tariffs during the 1990s (Guo 2013) to gain access to the World Trade Organization (WTO). China entered the World Trade Organization (WTO) in 2001, and the average tariff, which was 56% in 1982, was reduced to 15% by 2001 (Lardy 2005), which is a remarkable improvement in terms of trade liberalization.…”

“…China entered the World Trade Organization (WTO) in 2001, and the average tariff, which was 56% in 1982, was reduced to 15% by 2001 (Lardy 2005), which is a remarkable improvement in terms of trade liberalization. Due to the decrease in tariff and non-tariff barriers, in subsequent years, the total value of imports has increased, while the revenue generated from tariffs has declined (Guo 2013).…”