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Global Welfare Impact of China: Trade Integration and Technology Change

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  • Jing Zhang

    (University of Michigan)

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    Abstract

    This paper evaluates the global welfare impact of China's trade integration and technological change in a multi-country quantitative Ricardian-Heckscher-Ohlin model. We simulate two alternative growth scenarios: a balanced one in which China's productivity grows at the same rate in each sector, and an unbalanced one in which China's comparative disadvantage sectors catch up disproportionately faster to the world productivity frontier. Contrary to a well-known conjecture (Samuelson 2004), the large majority of countries experience significantly larger welfare gains when China's productivity growth is biased towards its comparative disadvantage sectors. This finding is driven by the inherently multilateral nature of world trade.

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    File URL: http://www.economicdynamics.org/meetpapers/2013/paper_630.pdf
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    Bibliographic Info

    Paper provided by Society for Economic Dynamics in its series 2013 Meeting Papers with number 630.

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    Date of creation: 2013
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    Handle: RePEc:red:sed013:630

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