The Impact of China's WTO Accession on East Asia
China's World Trade Organization (WTO) accession will have major implications for China and present both opportunities and challenges for East Asia. Ianchovichina and Walmsley assess the possible channels through which China's accession t...
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| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2003/08/2480797/impact-chinas-wto-accession-east-asia http://hdl.handle.net/10986/18127 |
| Summary: | China's World Trade Organization
(WTO) accession will have major implications for China and
present both opportunities and challenges for East Asia.
Ianchovichina and Walmsley assess the possible channels
through which China's accession to the WTO could affect
East Asia and quantify these effects using a dynamic
computable general equilibrium model. China will be the
biggest beneficiary of accession, followed by the industrial
and newly industrializing economies (NIEs) in East Asia. But
their benefits are small relative to the size of their
economies and to the vigorous growth projected to occur in
the region over the next 10 years. By contrast, developing
countries in East Asia are expected to incur small declines
in real GDP and welfare as a result of China's
accession, mainly because with the elimination of quotas on
Chinese textile and apparel exports to industrial countries
China will become a formidable competitor in areas in which
these countries have comparative advantage. With WTO
accession China will increase its demand for petrochemicals,
electronics, machinery, and equipment from Japan and the
NIEs, and farm, timber, energy products, and other
manufactures from the developing countries in East Asia. New
foreign investment is likely to flow into these expanding
sectors. The overall impact on foreign investment is likely
to be positive in the NIEs, but negative for the less
developed East Asian countries as a result of the
contraction of these economies' textile and apparel
sector. As China becomes a more efficient supplier of
services or a more efficient producer of high-end
manufactures, its comparative advantage will shift into
higher-end products. This is good news for the poor
developing economies in East Asia, but it implies that the
impact of China's WTO accession on the NIEs may change
to include heightened competition in global markets. |
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