This Paper is concerned with the interaction of regulated efficiency and World Trade Organization (WTO) accession and its impact on China’s motor vehicle sector. The analysis is conducted using a 23-sector/25-region computable general equilibrium model. Regulatory reform and internal restructuring are found to be critical. Restructuring is represented by a cost reduction following from consolidation and rationalization that moves costs toward global norms. Without restructuring, WTO accession means a surge of final imports, though imports of parts could well fall as production moves offshore. With restructuring, however, the final assembly industry can be made competitive by world standards, with a strengthened position for the industry.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
4439.
Find related papers by JEL classification: F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations F14 - International Economics - - Trade - - - Country and Industry Studies of Trade F17 - International Economics - - Trade - - - Trade Forecasting and Simulation