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A Fragmented China. Measure and Determinants of Chinese Domestic Market Disintegration

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  • Sandra PONCET

    ()
    (Université Paris I)

Abstract

This paper studies the degree of integration of China’s domestic market and investigates the determinants of inter-provincial trade barriers in light of endogenous trade policy theory. I rely on a new set of provincial trade ows to develop a model which analyzes the magnitude and evolution of Chinese provinces’ engagement in domestic trade by computing all-inclusive indicators of trade barriers. Results underline that not only the Chinese domestic economy is fragmented but also that local protectionism has spread between 1992 and 1997. The investigation of province-level and industry-level trade barriers confirms the relevance of applying the framework of endogenous protection to explain the level of impediments to trade between Chinese provinces. Our findings emphasize that provinces’domestic trade protection pursues a dual objective of socio-economic stability preservation and fiscal revenues maximization.

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File URL: http://publi.cerdi.org/ed/2002/2002.21.pdf
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Bibliographic Info

Paper provided by CERDI in its series Working Papers with number 200221.

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Length: 38
Date of creation: 2002
Date of revision:
Publication status: Published in Review of International Economics, 2005, pages 409-430
Handle: RePEc:cdi:wpaper:186

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Keywords: border effects.; domestic integration; Chinese provinces;

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