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Regulated Efficiency, World Trade Organization Accession, and the Motor Vehicle Sector in China

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  • Joseph F. Francois

    ()
    (Department of Economics, Erasmus Universiteit Rotterdam, and CEPR)

  • Dean Spinanger

    ()
    (Institute for World Economics, Kiel)

Abstract

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. However, with restructuring, the final assembly industry can be made competitive by world standards, with a strengthened position for the industry.

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Bibliographic Info

Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 04-049/2.

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Date of creation: 04 May 2004
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Handle: RePEc:dgr:uvatin:20040049

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Web page: http://www.tinbergen.nl

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Keywords: China Accession to WTO; Automobile Sector;

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Cited by:
  1. Anderson, Kym & Huang, Jikun & Ianchovichina, Elena, 2004. "Will China's WTO Accession Worsen Rural Poverty?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 4196, C.E.P.R. Discussion Papers.
  2. Deqiang Liu & Yanyun Zhao, 2006. "Ownership, Foreign Investment and Productivity--A Case Study of the Automotive Industry in China," Microeconomics Working Papers 21892, East Asian Bureau of Economic Research.

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