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How Would Bilateral Trade Retaliation Affect China?

Author

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  • Chunding Li

    () (Chinese Academy of Social Sciences
    Western University
    Central University of Finance and Economics)

Abstract

Abstract China is a large trade surplus country and could potentially become involved in bilateral trade retaliation. This paper uses a numerical simulation method to empirically explore how Chinese involvement in bilateral trade retaliation could affect both China and other countries. We analyze four different country groupings using scenario solutions of numerical global general equilibrium models to simulate trade retaliation equilibria and calculate their impacts. Our simulation results suggest that China will be hurt by trade retaliation sequences with other countries, but impacts depend on who is involved. Trade retaliation with large countries and major trade partners will hurt China more.

Suggested Citation

  • Chunding Li, 2017. "How Would Bilateral Trade Retaliation Affect China?," Computational Economics, Springer;Society for Computational Economics, vol. 49(3), pages 459-479, March.
  • Handle: RePEc:kap:compec:v:49:y:2017:i:3:d:10.1007_s10614-016-9571-6
    DOI: 10.1007/s10614-016-9571-6
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Trade retaliation; General equilibrium; Numerical simulation; Effects;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F51 - International Economics - - International Relations, National Security, and International Political Economy - - - International Conflicts; Negotiations; Sanctions
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models

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