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Trade liberalization in China's accession to the World Trade Organization

  • Ianchovichina, Elena
  • Martin, Will

Before reform, China's trade was dominated by a few foreign trade corporations with monopolies on the trade of specific ranges of products. Planners could control imports through these corporations so there was little need for conventional instruments such as tariffs, quotas, and licenses. Trade reforms increased the range of enterprises eligible to trade in specific commodities and led to the development of indirect new trade instruments, such as duty exemptions. Duty exemptions almost completely liberalized the imports of intermediate inputs used to produce exports and investment goods used in joint ventures with foreign enterprises. Comprehensive liberalization measures in China's World Trade Organization (WTO) accession package will help ease this problem as tariff reduction reduces the costs of domestic inputs to exporters. WTO commitments will also lead to the abolition of most nontariff barriers and of quotas on textiles and clothing. With accession, China's share of world exports may almost double between 1995 and 2005 - an estimate that is smaller than those found in studies that do not incorporate duty exemptions. (Duty exemptions were a form of partial liberalization, so any further reduction in protection will boost trade volume less than some estimate.) With reform, labor-intensive industries are expected to grow most, especially exports of apparel. Wages of unskilled worker should rise.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2623.

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Date of creation: 30 Jun 2001
Date of revision:
Handle: RePEc:wbk:wbrwps:2623
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  1. Martin, Will, 2001. "Trade policy reform in the East Asian transition economies," Policy Research Working Paper Series 2535, The World Bank.
  2. Bach, Christian Friis, et al, 2000. "Market Growth, Structural Change, and the Gains from the Uruguay Round," Review of International Economics, Wiley Blackwell, vol. 8(2), pages 295-310, May.
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  4. Deardorff, Alan V., 2001. "International provision of trade services, trade, and fragmentation," Policy Research Working Paper Series 2548, The World Bank.
  5. Will Martin, 2001. "Implications of reform and WTO accession for China' agricultural policies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(3), pages 717-742, November.
  6. John Gilbert & Thomas Wahl, 2002. "Applied General Equilibrium Assessments of Trade Libereralisation in China," The World Economy, Wiley Blackwell, vol. 25(5), pages 697-731, 05.
  7. Ahuja, Vinod & Filmer, Deon, 1995. "Educational attainments in developing countries : new estimates and projections disaggregated by gender," Policy Research Working Paper Series 1489, The World Bank.
  8. Wang, Zhi & Zhai, Fan, 1998. "Tariff Reduction, Tax Replacement, and Implications for Income Distribution in China," Journal of Comparative Economics, Elsevier, vol. 26(2), pages 358-387, June.
  9. Hertel, Thomas W. & Terrie Walmsley, 2000. "China's Accession to the WTO: Timing is Everything," GTAP Working Papers 403, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  10. Martin, Will & Mitra, Devashish, 2001. "Productivity Growth and Convergence in Agriculture versus Manufacturing," Economic Development and Cultural Change, University of Chicago Press, vol. 49(2), pages 403-22, January.
  11. David E. Bloom & Jeffrey G. Williamson, 1997. "Demographic Transitions and Economic Miracles in Emerging Asia," NBER Working Papers 6268, National Bureau of Economic Research, Inc.
  12. Ianchovichina, Elena & Walmsley, Terrie, 2003. "The impact of China's WTO accession on East Asia," Policy Research Working Paper Series 3109, The World Bank.
  13. Bach, Christian F. & Martin, Will, 2001. "Would the right tariff aggregator for policy analysis please stand up?," Journal of Policy Modeling, Elsevier, vol. 23(6), pages 621-635, August.
  14. Francois, Joseph & Martin, Will, 1995. "Multilateral Trade Rules and the Expected Cost of Protection," CEPR Discussion Papers 1214, C.E.P.R. Discussion Papers.
  15. Martin, Will, 1993. "Modeling the post-reform Chinese economy," Journal of Policy Modeling, Elsevier, vol. 15(5-6), pages 545-579.
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