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Structural change in the Chinese economy and changing trade relations with the world

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  • Bekkers, Eddy
  • Koopman, Robert
  • Lemos Rego, Carolina

Abstract

This paper examines the impact of structural change in China, in particular a reduction in the savings rate, an increase in the share of skilled workers, and an increase in productivity in technologically advanced manufacturing sectors targeted by Made in China 2025. Baseline projections until 2040 are generated with the WTO Global Trade Model, a dynamic computable general equilibrium model. With the modelled structural changes the Chinese economy is projected to reorient its focus increasingly onto the domestic economy, raising the share of private household and government consumption in GDP, turning China's trade surplus into a trade deficit, reducing China's share in global exports, raising the share of services in both production and exports, shifting the destination markets of Chinese exports from developed to developing countries, and changing its pattern of comparative advantage away from sectors like light and heavy manufacturing to electronic and machinery equipment. The large bilateral trade surplus vis-a-vis the United States is projected to fall to almost zero.

Suggested Citation

  • Bekkers, Eddy & Koopman, Robert & Lemos Rego, Carolina, 2019. "Structural change in the Chinese economy and changing trade relations with the world," CEPR Discussion Papers 13721, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13721
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    References listed on IDEAS

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    Cited by:

    1. Benjamin N. Dennis & Talan B. İşcan, 2020. "Structural change and global trade flows: Does an emerging giant matter?," Review of International Economics, Wiley Blackwell, vol. 28(5), pages 1191-1231, November.
    2. Aguiar, Angel & Corong, Erwin L. & van der Mensbrugghe, Dominique & Bekkers, Eddy & Koopman, Robert Bernard & Teh, Robert, 2019. "The WTO Global Trade Model: Technical documentation," WTO Staff Working Papers ERSD-2019-10, World Trade Organization (WTO), Economic Research and Statistics Division.

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    More about this item

    Keywords

    China; Dynamic CGE-Modelling; structural change;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

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