IDEAS home Printed from https://ideas.repec.org/p/tky/fseres/2002cf157.html
   My bibliography  Save this paper

China's Entry into the WTO: ICT Sectors, Innovation, Growth and Distribution

Author

Listed:
  • Haider Ali Khan

    (GSIS, University of Denver and CIRJE, Faculty of Economics, University of Tokyo)

Abstract

During the debate about PRC's entry into the WTO, it was assumed by the proponents of joining the WTO that the export-led growth will continue and under WTO regime it will also lead to the modernization of the economy along the lines of the other newly industrialized economies(NIEs) of Asia. If examined rigorously, such an assumption can be seen to entail the goal of creating further technological capabilities. In particular, China seems to be firmly committed to the creation of a largely self-sustaining innovation system as part of a knowledge-based economy of the future . Such innovation systems, called positive feedback loop innovation systems or POLIS have been created by advanced countries, and NIEs such as South Korea and Taiwan are proceeding to create these as well. Can China do the same? And will China's entry into the WTO help or hinder such efforts? Using an economy wide model it is found thatThe entry into WTO can create an opportunity for technological learning and new technology imports. The challenge is to learn quickly and develop domestic capability before costs become too high. Thus, subsidizing domestic ICT firms can become an even more attractive strategic trade and technology policy. However, developing an interactive sustainable innovation system with virtuous positive feedbacks will require strategic complementarity between capital expenditures such as R&D and human resources.Therefore, upgrading education and training and developing ICT infrastructure quickly become urgent policy objectives. Also, precompetitive support of innovation needs to be separated from the actual development and marketing. In this area, clear guidelines and incentives for both the state and non-state enterprises will be necessary. A well-defined competition policy is a sine qua non for this purpose. In the Chinese case, openness can lead to increased competition under a rules-based trading regime. The challenge will be to build competitive world class ICT firms in such an environment. Even as competitive policies are pursued along with further structural reforms in China, the fact that such policies are to be pursued in an environment of incomplete information and other market imperfections mean that excess capacity, and consequently, unemployment may persist for sometime. Therefore, the role for appropriate macroeconomic policies to pursue the goal of reducing excess capacity without creating inflationary pressures need to be considered carefully.

Suggested Citation

  • Haider Ali Khan, 2002. "China's Entry into the WTO: ICT Sectors, Innovation, Growth and Distribution," CIRJE F-Series CIRJE-F-157, CIRJE, Faculty of Economics, University of Tokyo.
  • Handle: RePEc:tky:fseres:2002cf157
    as

    Download full text from publisher

    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2002/2002cf157.pdf
    Download Restriction: no

    References listed on IDEAS

    as
    1. Foster, James & Greer, Joel & Thorbecke, Erik, 1984. "A Class of Decomposable Poverty Measures," Econometrica, Econometric Society, vol. 52(3), pages 761-766, May.
    2. Quibria, mg & Tschang, Ted, 2001. "Information and communication Technology and Poverty: An Asian Perspective," MPRA Paper 2639, University Library of Munich, Germany, revised Jan 2001.
    3. Deolalikar, Anil & Hasan, Rana & Khan, Haider & Quibria, M.G., 1997. "Competiveness and Human Resource Development," MPRA Paper 2819, University Library of Munich, Germany, revised 1997.
    4. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, vol. 55(1), pages 133-153, February.
    5. Kakwani, Nanak, 1993. "Poverty and Economic Growth with Application to Cote d'Ivoire," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(2), pages 121-139, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Haider A. Khan & Zulfiqar Larik, 2007. "Globalization and Regional Co-operation in South Asia: A Political and Social Economy Approach," CIRJE F-Series CIRJE-F-480, CIRJE, Faculty of Economics, University of Tokyo.

    More about this item

    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:tky:fseres:2002cf157. 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: (CIRJE administrative office). General contact details of provider: http://edirc.repec.org/data/ritokjp.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.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with 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.