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The global welfare impact of China: Trade integration and technological change

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  • Julian di Giovanni

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  • Andrei A. Levchenko
  • Jing Zhang

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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Bibliographic Info

Paper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 1388.

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Date of creation: Oct 2013
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Handle: RePEc:upf:upfgen:1388

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Web page: http://www.econ.upf.edu/

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Keywords: China; productivity growth; international trade;

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  29. repec:cge:warwcg:13 is not listed on IDEAS
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Citations

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Cited by:
  1. Kei-Mu Yi & Jing Zhang, 2010. "Structural Change in an Open Economy," Working Papers 595, Research Seminar in International Economics, University of Michigan.
  2. Andrei A. Levchenko & Jing Zhang, 2013. "The global labor market impact of rmerging giants: a quantitative assessment," Working Paper Series WP-2013-10, Federal Reserve Bank of Chicago.
  3. Daron Acemoglu & Gino Gancia & Fabrizio Zilibotti, 2012. "Offshoring and directed technical change," Economics Working Papers 1362, Department of Economics and Business, Universitat Pompeu Fabra, revised Apr 2013.
  4. Jing Zhang & Andrei A. Levchenko, 2011. "Comparative Advantage and the Welfare Impact of European Integration," 2011 Meeting Papers 819, Society for Economic Dynamics.
  5. Fabrice Defever & Alejandro Riaño, 2012. "China's Pure Exporter Subsidies," CESifo Working Paper Series 4054, CESifo Group Munich.
  6. Pierre-Daniel G. Sarte & Esteban Rossi-Hansberg & Fernando Parro & Lorenzo Caliendo, 2013. "The impact of regional and sectoral productivity changes on the U.S. economy," Working Paper 13-14, Federal Reserve Bank of Richmond.

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