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WTO Accession, Rural Labour Migration and Urban Unemployment in China

Author

Listed:
  • Fan Zhai

    (Department of Policy and Fiscal Affairs, Ministry of Finance, PRC, Sanfihe, Xicheng District, Beijing 100820, P. R. China, fzhai_99@yahoo.com)

  • Zhi Wang

    (School of Computational Sciences, George Mason University, and with the Economic Research Service, US Department of Agriculture, 1800 M Street, NW, Room N2109, Washington, DC 20036, USA, zwang@ers.usda.gov)

Abstract

This paper evaluates the rural-urban migration and urban unemployment effects of China's WTO accession based on the China-US bilateral agreement on market accession. The evaluation is conducted by a 53-sector recursive dynamic computable general equilibrium (CGE) model of China benchmarked to a most recent version of the Chinese Social Accounting Matrix (SAM). The simulation results show that there is a great need for co-ordination between China's rural-urban migration policy, labour market reform and the implementation of trade liberalisation measures after China's WTO entry. The net benefit from WTO membership will be maximised if China adopts a policy gradually to relax its rural-urban migration control in conjunction with its labour market reform. Doing so not only prevents a dramatic worsening of the urban unemployment problem, but also permits enough labour market flexibility to create more employment opportunities for rural unskilled labour shifted out of the farming sector.

Suggested Citation

  • Fan Zhai & Zhi Wang, 2002. "WTO Accession, Rural Labour Migration and Urban Unemployment in China," Urban Studies, Urban Studies Journal Limited, vol. 39(12), pages 2199-2217, November.
  • Handle: RePEc:sae:urbstu:v:39:y:2002:i:12:p:2199-2217
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    Cited by:

    1. Hertel, Thomas & Zhai, Fan, 2006. "Labor market distortions, rural-urban inequality and the opening of China's economy," Economic Modelling, Elsevier, vol. 23(1), pages 76-109, January.
    2. Yinhua Mai & Xiujian Peng & Peter Dixon & Maureen Rimmer, 2014. "The economic effects of facilitating the flow of rural workers to urban employment in China," Papers in Regional Science, Wiley Blackwell, vol. 93(3), pages 619-642, August.
    3. Jin, Songqing & Deininger, Klaus, 2009. "Land rental markets in the process of rural structural transformation: Productivity and equity impacts from China," Journal of Comparative Economics, Elsevier, vol. 37(4), pages 629-646, December.

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