The International Effects of China's Growth, Trade and Ecucation Booms
China’s international trade flows have increased by 500% since 1992, far outstripping GDP growth. Likewise tertiary education enrollments have increased by 300%. We simulate these changes using a multi-sector growth model of the Chinese and USA economies. A decade of trade biased growth in China is found to have a large effect on the USA economy – raising GDP approximately 3-4.5 percentage points. We also show that the trade bias in China’s growth accounts for more than half of the observed growth in tertiary enrolments in China. In contrast neutral growth has practically no effect on USA incomes or China’s stock of skilled labour. Finally the simulations reveal that China’s education boom per se has practically no long run impact on the USA economy. The results thus indicate that the pattern of productivity growth in exports sectors, as might be caused by falling trade costs, has been critical in transmitting benefits of Chinese growth to the world economy. They also point to an important link between falling trade costs and human capital formation.
|Date of creation:||2010|
|Contact details of provider:|| Postal: 35 Stirling Highway, Crawley, W.A. 6009|
Phone: (08) 9380 2918
Fax: (08) 9380 1016
Web page: http://www.business.uwa.edu.au/school/disciplines/economics
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pavcnik, Nina, 2003.
"What explains skill upgrading in less developed countries?,"
Journal of Development Economics,
Elsevier, vol. 71(2), pages 311-328, August.
- Nina Pavcnik, 2000. "What Explains Skill Upgrading in Less Developed Countries?," NBER Working Papers 7846, National Bureau of Economic Research, Inc.
- Alessia Amighini, 2005.
"China in the international fragmentation of production: Evidence from the ICT industry,"
European Journal of Comparative Economics,
Cattaneo University (LIUC), vol. 2(2), pages 203-219, December.
- Alessia Amighini, 2004. "China in the international fragmentation of production: Evidence from the ICT industry," KITeS Working Papers 151, KITeS, Centre for Knowledge, Internationalization and Technology Studies, Universita' Bocconi, Milano, Italy, revised Jan 2004.
- James E. Anderson & Eric van Wincoop, 2004.
NBER Working Papers
10480, National Bureau of Economic Research, Inc.
- Prema-chandra Athukorala, 2003.
"Product Fragmentation and Trade Patterns in East Asia,"
Departmental Working Papers
2003-21, The Australian National University, Arndt-Corden Department of Economics.
- Prema-chandra Athukorala, 2005. "Product Fragmentation and Trade Patterns in East Asia," Asian Economic Papers, MIT Press, vol. 4(3), pages 1-27, October.
- Amiti, Mary & Freund, Caroline, 2008.
"The anatomy of China's export growth,"
Policy Research Working Paper Series
4628, The World Bank.
- Bussière, Matthieu & Schnatz, Bernd, 2006.
"Evaluating China’s integration in world trade with a gravity model based benchmark,"
Working Paper Series
0693, European Central Bank.
- Matthieu Bussière & Bernd Schnatz, 2009. "Evaluating China’s Integration in World Trade with a Gravity Model Based Benchmark," Open Economies Review, Springer, vol. 20(1), pages 85-111, February.
- Wing Thye Woo, "undated".
"Chinese Economic Growth: Sources And Prospects,"
Department of Economics
96-08, California Davis - Department of Economics.
- Bryan Graham & Jonathan Temple, 2006.
"Rich Nations, Poor Nations: How Much Can Multiple Equilibria Explain?,"
Journal of Economic Growth,
Springer, vol. 11(1), pages 5-41, 03.
- Graham, Bryan S & Temple, Jonathan, 2001. "Rich Nations, Poor Nations: How Much can Multiple Equilibria Explain?," CEPR Discussion Papers 3046, C.E.P.R. Discussion Papers.
- Graham, Bryan S. & Jonathan Temple, 2002. "Rich Nations, Poor Nations: How much can multiple equilibria explain?," Royal Economic Society Annual Conference 2002 91, Royal Economic Society.
- Bryan S. Graham & Jonathan R. W. Temple, 2004. "Rich nations, poor nations: how much can multiple equilibria explain?," The Institute for International Integration Studies Discussion Paper Series iiisdp017, IIIS.
- Knight, John & Li, Shi, 1996. "Educational Attainment and the Rural--Urban Divide in China," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 58(1), pages 83-117, February.
- Lee Branstetter & Nicholas Lardy, 2006. "China's Embrace of Globalization," NBER Working Papers 12373, National Bureau of Economic Research, Inc.
- Yao Amber Li & John Whalley & Shunming Zhang & Xiliang Zhao, 2011.
"The Higher Educational Transformation of China and Its Global Implications,"
The World Economy,
Wiley Blackwell, vol. 34(4), pages 516-545, 04.
- Yao Li & John Whalley & Shunming Zhang & Xiliang Zhao, 2008. "The Higher Educational Transformation of China and Its Global Implications," NBER Working Papers 13849, National Bureau of Economic Research, Inc.
- Tyers, Rod & Yang, Yongzheng, 2000. "Capital-Skill Complementarity and Wage Outcomes Following Technical Change in a Global Model," Oxford Review of Economic Policy, Oxford University Press, vol. 16(3), pages 23-41, Autumn.
- Baier, Scott L. & Bergstrand, Jeffrey H., 2001. "The growth of world trade: tariffs, transport costs, and income similarity," Journal of International Economics, Elsevier, vol. 53(1), pages 1-27, February.
When requesting a correction, please mention this item's handle: RePEc:uwa:wpaper:10-04. 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: (Verity Chia)
If references are entirely missing, you can add them using this form.