How much did China's WTO accession increase economic growth in resource-rich countries?

Abstract

We provide an estimate of China's impact on the growth rate of resource--rich countries after its WTO accession on 11 December 2001. Our empirical approach follows the logic of the differences--in--differences estimator. In addition to temporal variation arising from the WTO accession, which we argue was exogenous to other countries' growth trajectories, we exploit spatial variation arising from differences in natural resource wealth. This allows us to compare changes in economic growth in the post--accession period relative to the pre--accession period between countries that were able to benefit from the surge in demand for industrial commodities brought about by China's WTO accession and countries that were less able to do so. We find that roughly one tenth of average annual post--accession growth in resource--rich countries was due to China's increased appetite for commodities. We use this finding to inform the debate about what will happen to economic growth in resource--rich countries as China rebalances and its demand for commodities weakens.JEL Codes: F4, F62 ❋ We thank Nikolaj Malchow--Møller for useful comments.

Towards recoupling? Assessing the global impact of a Chinese hard landing through trade and commodity price channels

“…Moreover, for commodity-exporting LICs in Sub-Saharan Africa and the Middle East, terms-oftrade shocks and demand from the "emerging market leaders" are the main channels of transmission of foreign shocks. Focusing on the consequences of China's WTO accession, Andersen, Barslund, Hansen, Harr, and Jensen (2014) find that roughly one-tenth of the average annual post-accession growth in resource-rich countries was due to China's increased appetite for commodities. Using a GVAR model, Cashin, Mohaddes, and Raissi (2012) find that the MENA countries are more sensitive to developments in China than to shocks in the Euro Area or the United States.…”

Towards Recoupling? Assessing the Global Impact of a Chinese Hard Landing Through Trade and Commodity Price Channels.

“…Moreover, for commodity-exporting LICs in Sub-Saharan Africa and the Middle East, terms of trade shocks and demand from the "emerging market leaders" are the main channels of transmission of foreign shocks. Focusing on the consequences of China's WTO accession, Andersen et al (2013) find that roughly one-tenth of the average annual post-accession growth in resource-rich countries was due to China's increased appetite for commodities. Using a GVAR model that takes into account trade linkages, financial variables and oil prices, Cashin et al (2012) find that the MENA countries are more sensitive to developments in China than to shocks in the Euro Area or the United States.…”

Mining and economic development: Did China’s WTO accession affect African local economic development?

“…Africa has been achieving much higher rates of growth, with the 'super-cycle' in commodity prices constituting a positive economic shock for much of the region, and especially for those with mineral resources (Andersen et al 2014;Beny and Cook, 2009). Although there has recently been a sharp drop in world prices, the post-2000 commodity boom has been one of the most powerful since 1945 (see for example Radetzki, 2006;Humphreys, 2013).…”