Economic Impacts of China's Accession to the World Trade Organization

Ianchovichina and Martin present estimates of the impact of accession by China and Chinese Taipei to the World Trade Organization. China is estimated to be the biggest beneficiary, followed by Chinese Taipei and their major trading partners. Accession will boost the labor-intensive manufacturing sectors in China, especially the textiles and apparel sector that will benefit directly from the removal of quotas on textiles and apparel exports to North America and Western Europe. Consequently, developing economies competing with China in third markets may suffer relatively small losses. China has already benefited from the reforms undertaken between 1995 and 2001 (US$31 billion) and trade reforms after accession will lead to additional gains of around $US10 billion. Accession will have important distributional consequences for China, with wages of skilled workers and unskilled nonfarm workers rising in real terms and relative to farm incomes. Reduction in agricultural protection may hurt some farmers. Possible policy changes considered to offset these impacts include reductions in barriers to labor mobility and improvements in rural education. The authors estimate that the removal of the hukou system would raise farm wages and allow 28 million workers to migrate to nonfarm jobs. If, in addition, there is an increase in education spending that results in a percentage point increase in the annual skilled labor growth rate, approximately 32 million farm workers would leave their job for jobs in the nonfarm sectors. These policies would not only facilitate the evolution of China's economy toward high-technology manufacturing and services, they have the potential to much more than offset any negative impacts of accession on rural wages and rural incomes generally.

Bibliographic Details

Main Authors:	Ianchovichina, Elena, Martin, William
Language:	English en_US
Published:	World Bank, Washington, DC 2003-05
Subjects:	ACCESSION, ACCESSION AGREEMENT, ACCESSION AGREEMENTS, ACCESSION COMMITMENTS, ACCESSION PROCESS, ACCESSION TO THE WORLD TRADE ORGANIZATION, ACCESSION TO WTO, ADVERSE IMPACTS, AGRICULTURAL COMMODITIES, AGRICULTURAL EXPORT SUBSIDIES, AGRICULTURAL RETURNS, AGRICULTURAL SECTOR, AGRICULTURAL SECTORS, AGRICULTURE, APPAREL, APPAREL EXPORTS, APPAREL SECTOR, AUTOMOBILE SECTOR, AVERAGE TARIFF, AVERAGE TARIFF RATES, AVERAGE TARIFFS, BASE YEAR, BENCHMARK, BENCHMARK DATA, CAPACITY BUILDING, CAPITAL FLOWS, CAPITAL GOODS, CAPITAL PER WORKER, CUSTOMS, CUSTOMS UNION, DOMESTIC MARKET, DOMESTIC MARKETS, DOMESTIC PRODUCERS, DOMESTIC REGULATIONS, DUTY EXEMPTIONS, ECONOMIC GROWTH, ECONOMIC IMPACTS, ECONOMIC POLICY, ECONOMIES OF SCALE, ELASTICITIES, ELASTICITY, ELASTICITY OF TRANSFORMATION, EMPLOYMENT, EQUILIBRIUM, EXCHANGE RATE, EXCHANGE RATE REGIME, EXPORT PROCESSING, EXPORT PRODUCTION, EXPORT SECTOR, EXPORT SHARE, EXPORT SUBSIDIES, EXPORT SUBSIDY, EXPORT TAX, EXPORT-ORIENTED ACTIVITIES, EXPORTERS, FINISHED GOODS, FOREIGN ENTRY, FOREIGN EXCHANGE, FOREIGN FIRMS, FOREIGN INVESTMENT, FULL EMPLOYMENT, GDP, GENERAL EQUILIBRIUM MODEL, GROWTH RATE, GROWTH RATES, HARMONIZATION, HARMONIZATION PROGRAM, HUMAN CAPITAL, IMPORT PROTECTION, IMPORTED, IMPORTED INPUTS, IMPORTED INTERMEDIATE, IMPORTED INTERMEDIATES, IMPORTS, INCOME, INCOME TRANSFERS, INDUSTRIAL STRUCTURE, INTERMEDIATE IMPORTS, INTERMEDIATE INPUTS, INTERMEDIATES, INTERNATIONAL CAPITAL, INVESTMENT LEVELS, LABOR MARKET, LABOR MARKET DISTORTIONS, LABOR MARKET POLICIES, LABOR MARKETS, LABOR MOBILITY, LABOR MOVEMENT, LABOR SUPPLY, LOCAL CONTENT, LOCAL MARKET, LOSS OF TARIFF REVENUE, MANUFACTURING SECTORS, MARKET DISTORTIONS, MARKET IMPERFECTIONS, MERCHANDISE TRADE, MERCHANDISE TRADE LIBERALIZATION, METALS, MULTILATERAL AGREEMENTS, NEGATIVE PROTECTION, NON-AGRICULTURAL EMPLOYMENT, NONTARIFF BARRIER, NONTARIFF BARRIERS, OIL, OPEN ECONOMY, POLICY CHANGES, POLICY INSTRUMENTS, POLICY REFORMS, POVERTY REDUCTION, PRICE CHANGES, PRODUCERS, PRODUCTION STRUCTURE, PRODUCTIVITY, PRODUCTIVITY GROWTH, PROTECTION DATA, PROTECTIVE IMPACT, PUBLIC SERVICES, QUANTITATIVE RESTRICTIONS, QUOTA RENTS, QUOTAS, RATES OF PROTECTION, REAL WAGES, REDUCING TARIFFS, REDUCTION IN TARIFFS, REFORM PROGRAM, ROUND AGREEMENT, RURAL AREAS, RURAL LABOR, RURAL SECTOR, RURAL WAGES, RURAL WORKERS, SAFEGUARD ACTIONS, SERVICE SECTORS, STATE TRADING, STRUCTURAL CHANGE, STRUCTURAL CHANGES, TARIFF BINDINGS, TARIFF DATA, TARIFF LEVELS, TARIFF LIBERALIZATION, TARIFF LINES, TARIFF RATES, TARIFF REDUCTIONS, TARIFF REFORM, TOTAL FACTOR PRODUCTIVITY, TOTAL FACTOR PRODUCTIVITY GROWTH, TRADE BALANCE, TRADE DATA, TRADE FLOWS, TRADE POLICIES, TRADE POLICY, TRADE REFORM, TRADE REFORMS, TRADE REGIME, TRADE VOLUMES, TRADING ARRANGEMENTS, TRADING PARTNERS, TRADING SYSTEM, TRANSITIONAL PRODUCT, TRANSPORT SERVICES, UNDERESTIMATES, UNSKILLED WORKERS, URBAN AREAS, URBAN EMPLOYMENT, URBAN WORKERS, URUGUAY ROUND, VALUE OF IMPORTS, WAGES, WHOLESALE PRICES, WORLD ECONOMY, WORLD PRICES, WORLD TRADE, WORLD TRADING SYSTEM, WTO, WTO ACCESSION ECONOMIC IMPACT, BENEFICIARY CAPACITY, TRADING, MANUFACTURING, TEXTILES, EXPORTS, SKILLED WORKERS, FARMERS, RURAL EDUCATION, WTO ACCESSION, ECONOMIC IMPACT,
Online Access:	http://documents.worldbank.org/curated/en/2003/05/2384816/economic-impacts-chinas-accession-world-trade-organization https://hdl.handle.net/10986/18212
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