Publication: Economic Impacts of China's Accession to the World Trade Organization
Date
2003-05
ISSN
Published
2003-05
Author(s)
Abstract
Ianchovichina and Martin present
estimates of the impact of accession by China and Chinese
Taipei to the World Trade Organization. China is estimated
to be the biggest beneficiary, followed by Chinese Taipei
and their major trading partners. Accession will boost the
labor-intensive manufacturing sectors in China, especially
the textiles and apparel sector that will benefit directly
from the removal of quotas on textiles and apparel exports
to North America and Western Europe. Consequently,
developing economies competing with China in third markets
may suffer relatively small losses. China has already
benefited from the reforms undertaken between 1995 and 2001
(US$31 billion) and trade reforms after accession will lead
to additional gains of around $US10 billion. Accession will
have important distributional consequences for China, with
wages of skilled workers and unskilled nonfarm workers
rising in real terms and relative to farm incomes. Reduction
in agricultural protection may hurt some farmers. Possible
policy changes considered to offset these impacts include
reductions in barriers to labor mobility and improvements in
rural education. The authors estimate that the removal of
the hukou system would raise farm wages and allow 28 million
workers to migrate to nonfarm jobs. If, in addition, there
is an increase in education spending that results in a
percentage point increase in the annual skilled labor growth
rate, approximately 32 million farm workers would leave
their job for jobs in the nonfarm sectors. These policies
would not only facilitate the evolution of China's
economy toward high-technology manufacturing and services,
they have the potential to much more than offset any
negative impacts of accession on rural wages and rural
incomes generally.
Citation
“Ianchovichina, Elena; Martin, William. 2003. Economic Impacts of China's Accession to the World Trade Organization. Policy Research Working Paper;No. 3053. © World Bank, Washington, DC. http://openknowledge.worldbank.org/handle/10986/18212 License: CC BY 3.0 IGO.”
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