IDEAS home Printed from https://ideas.repec.org/a/ris/adbadr/2724.html
   My bibliography  Save this article

The Growth Locomotive of the People’s Republic of China: Macro and Terms-of-Trade Impacts on Neighboring Countries

Author

Listed:
  • Mai, Yinhua

    (Asian Development Bank)

  • Adams, Philip

    (Asian Development Bank)

  • Dixon, Peter

    (Asian Development Bank)

  • Menon, Jayant

    (Asian Development Bank)

Abstract

This paper analyzes the impact that terms of trade (TOT) are likely to have on the growth of the People’s Republic of China’s (PRC) neighboring countries. Two scenarios employing a dynamic computable general equilibrium (CGE) framework are considered: (i) a convergence scenario, where historical trends are projected; and (ii) a baseline scenario, where technological progress in the PRC is placed in line with that of the United States (US). The results show that the PRC’s technological convergence leads to increased world prices for mining products, and lower world prices for manufactures, especially those exported extensively by the PRC. On the whole, however, the effects on the growth and TOT of the PRC’s neighboring countries are relatively small. The modelling framework used in this study explicitly captures the various offsetting effects that dampen the impact on TOT and contribute to the small impact on growth. Furthermore, the additional capital required to finance the PRC’s growth comes predominantly from domestic savings, placing little pressure on the global supply of capital. Thus, an awakening PRC is unlikely to make a dramatic entrance despite the country’s overall positive impact on the region – although there is nothing to fear, there is also only little to gain.

Suggested Citation

  • Mai, Yinhua & Adams, Philip & Dixon, Peter & Menon, Jayant, 2010. "The Growth Locomotive of the People’s Republic of China: Macro and Terms-of-Trade Impacts on Neighboring Countries," Asian Development Review, Asian Development Bank, vol. 27(2), pages 82-121.
  • Handle: RePEc:ris:adbadr:2724
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    References listed on IDEAS

    as
    1. Jamison, Eliot A. & Jamison, Dean T. & Hanushek, Eric A., 2007. "The effects of education quality on income growth and mortality decline," Economics of Education Review, Elsevier, vol. 26(6), pages 771-788, December.
    2. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    3. Luis Serven & César Calderon, 2004. "The Effects of Infrastructure Development on Growth and income," Econometric Society 2004 Latin American Meetings 173, Econometric Society.
    4. Kakwani, N., 1993. "Performance in living standards : An international comparison," Journal of Development Economics, Elsevier, vol. 41(2), pages 307-336, August.
    5. Zhuang, Juzhong & Gunatilake, Herath & Niimi, Yoko & Ehsan Khan, Muhammad & Jiang, Yi & Hasan, Rana & Khor, Niny & S. Lagman-Martin, Anneli & Bracey, Pamela & Huang, Biao, 2009. "Financial Sector Development, Economic Growth, and Poverty Reduction: A Literature Review," ADB Economics Working Paper Series 173, Asian Development Bank.
    6. Thierry Bracke & Matthieu Bussière & Michael Fidora & Roland Straub, 2008. "A framework for assessing global imbalances," Occasional Paper Series 78, European Central Bank.
    7. Zhuang, Juzhong & de Dios, Emmanuel & Lagman-Martin, Anneli, 2010. "Governance and Institutional Quality and the Links with Economic Growth and Income Inequality: With Special Reference to Developing Asia," ADB Economics Working Paper Series 193, Asian Development Bank.
    Full references (including those not matched with items on IDEAS)

    More about this item

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • F47 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Forecasting and Simulation: Models and Applications

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ris:adbadr:2724. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Maria Susan M. Torres). General contact details of provider: http://edirc.repec.org/data/eradbph.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.