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The Consequences of China's WTO Accession for Its Neighbors

  • Warwick J. McKibbin

    (Research School of Pacific and Asian Studies Australian National University Canberra, ACT 0200 Australia and The Brookings Institution 1775 Massachusetts Avenue, N.W. Washington, DC 20036 USA)

  • Wing Thye Woo

    (Economics Department University of California One Shields Avenue Davis, CA 95616, USA,)

Our simulations of a global macroeconomic model suggest that China's WTO accession could create significant welfare losses in the ASEAN-4 if foreign direct investment (FDI) is significantly redirected away from these countries toward China, and if the ASEAN-4 countries are unable to implement policies to make up for the slower rate of technological diffusion from the reduced FDI inflow. If the ASEAN-4 do not fall behind technologically, then they will be able to find lucrative niches within the lengthened international manufacturing production chains. The ASEAN-4 must therefore strengthen their abilities to absorb new foreign technologies quickly and to engage in indigenous technical innovations. Copyright (c) 2003 Center for International Development and the Massachusetts Institute of Technology.

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Article provided by MIT Press in its journal Asian Economic Papers.

Volume (Year): 2 (2003)
Issue (Month): 2 ()
Pages: 1-38

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Handle: RePEc:tpr:asiaec:v:2:y:2003:i:2:p:1-38
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  1. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  2. Wing Thye Woo & Michael Magill & Julian R. Betts, 2003. "Chinese Economic Growth: Sources and Prospects," Working Papers 968, University of California, Davis, Department of Economics.
  3. Wing Thye Woo, 1999. "The Economics and Politics of Transition to an Open Market Economy: China," OECD Development Centre Working Papers 153, OECD Publishing.
  4. Warwick J. McKibbin & K. K. Tang, 2000. "Trade and Financial Reform in China: Impacts on the World Economy," The World Economy, Wiley Blackwell, vol. 23(8), pages 979-1003, 08.
  5. W. J. McKibbin & P. J. Wilcoxen, . "The Theoretical and Empirical Structure of the G-Cubed Model," Discussion Papers 118, Brookings Institution International Economics.
  6. McKibbin, Warwick J & Vines, David, 2000. "Modelling Reality: The Need for Both Inter-temporal Optimization and Stickiness in Models for Policy-Making," Oxford Review of Economic Policy, Oxford University Press, vol. 16(4), pages 106-37, Winter.
  7. Ianchovichina, Elena, 2001. "Trade Liberalization in China’s Accession to WTO," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 16, pages 421-445.
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