Trade and Financial Reform in China: Impacts on the World Economy

McKibbin, Warwick J.; Tang, Kam Ki

doi:10.1111/1467-9701.00314

Cited by 22 publications

(8 citation statements)

References 11 publications

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“…16. McKibbin and Tang (2000) and Walmsley et al (2004) discuss in detail the effect of trade and financial reform in China on rates of return to capital and foreign investment. countries of East Asia.…”

Section: Changes In Investment Patternsmentioning

confidence: 99%

Impact of China's WTO Accession on East Asia

Ianchovichina¹,

Walmsley²

2005

Contemporary Economic Policy

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2China's WTO accession will have major implications for China and present both opportunities and challenges for East Asia. We assess the possible channels through which China's accession to the WTO could affect East Asia and quantify these effects using a dynamic computable general equilibrium model. China will be the biggest beneficiary of accession, followed by the industrialized and newly industrializing economies (NIEs) in East Asia. However, their benefits are small relative to the size of their economies and to the vigorous growth projected to occur in the region over the next 10 years. By contrast, developing countries in East Asia are expected to incur small declines in real GDP and welfare as a result of China's accession, mainly because with the elimination of quotas on Chinese textile and apparel exports to developed countries China will because a formidable competitor in areas in which these countries have comparative advantage.With WTO accession China will increase its demand for petrochemicals, electronics, machinery, and equipment from Japan and the Newly Industrializing Economies (NIEs), and farm, timber, energy products, and other manufactures from the developing East Asian countries. New foreign investment is likely to flow into these expanding sectors. The overall impact on foreign investment is likely to be positive in the NIEs, but negative for the less developed East Asian countries as a result of the contraction of these economies' textile and apparel sector. As China becomes a more efficient supplier of services or a more efficient producer of high-end manufactures, its comparative advantage will shift into higher-end products. This is good news for the poor developing economies in East Asia, but implies that the impact of China's WTO accession on the NIEs may change to include heightened competition in global markets. JEL classification: F11, F15

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Section: Changes In Investment Patternsmentioning

confidence: 99%

Impact of China's WTO Accession on East Asia

Ianchovichina¹,

Walmsley²

2005

Contemporary Economic Policy

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“…However, given the importance of other barriers such as capital controls, export promotion strategies, non-tariff barriers (quotas, voluntary export restraints and the like) and institutional restrictions on foreign participation in the services sector, their abstraction has obvious implications for the accuracy of the simulation process. Alternatively, some attempt is made to account for these other barriers by estimating their tariff equivalents and / or through exogenously introducing ad hoc changes in technology and / or the expected return on investment (McKibbon and Tang, 2000). In any case, simulations are a necessarily imprecise endeavour.…”

Section: Introductionmentioning

confidence: 99%

Economic Integration between China and the ASEAN‑5

Laurenceson¹

2003

Asean Economic Bulletin

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“…In these papers the key insight was that the fixed exchange rate regime of the euro zone would be under serious stress if fiscal policies in Europe were not coordinated in the face of various economic shocks. Macroeconomic policy issues in Japan have been examined using G-Cubed by McKibbin (2002) and Callen and McKibbin (2003) where the experience of Japan during the 1990s was captured by the model as a serious of policy errors particularly in announcing fiscal expansion and generating crowding out through asset markets, but then not delivering the fiscal spending causing a persistent downward drop in GDP; in India by McKibbin and Singh (2003) where nominal income targeting was shown to be a far better monetary regime than inflation targeting given the prevalence of supply side rather than demand-side shocks in the Indian economy; in China by McKibbin and Tang (2000) and McKibbin and Huang (2000) where financial reforms where found to have profound effects on economic growth and the balance of payments adjustment but that a loss in confidence in China could devastate economic growth; and in Asia in McKibbin and Le (2004) and McKibbin and Chanthapun (1999) where flexible exchange rate regimes were found to be far better at insulating East Asian economies against global economic shocks that pegging to either the US dollar or a common Asia currency.…”

Section: Macroeconomic Policymentioning

confidence: 99%