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Trade liberalization in China's accession to the World Trade Organization (English)

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.

Details

  • Author

    Ianchovichina, Elena Martin, Will

  • Document Date

    2001/06/30

  • Document Type

    Policy Research Working Paper

  • Report Number

    WPS2623

  • Volume No

    1

  • Total Volume(s)

    1

  • Country

    China,

  • Region

    East Asia and Pacific,

  • Disclosure Date

    2010/07/01

  • Doc Name

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

  • Keywords

    duty exemptions;judicial review of administrative decision;share of world output;Agriculture;share of world exports;imports of investment good;dispersion of tariff rate;total factor productivity growth;aggregate measure of support;concern of policy makers;membership in the wto;rate of productivity growth;trade regime;state trading;rates of protection;average tariff rate;quota growth rates;trade policy instrument;high import duties;foreign trade corporations;secondary market price;growth in trade;state trading enterprise;world export market;demand for import;nontariff barrier;duty exemption scheme;restrictions on trade;export of apparel;trade policy reform;benefits of openness;process of reform;domestic value added;agriculture and industry;state owned enterprise;improved food security;tariff import;imports of textiles;agricultural product price;share of export;share of output;share of trade;decline in agriculture;gross domestic investment;physical capital stock;composition of output;tariff on import;special economic zone;statutory tariff rates;economies of scale;economies in transition;agricultural trade barriers;annual productivity growth;process of liberalization;high trade barriers;agricultural export subsidy;value added tax;improved market access;official exchange rate;export tax equivalents;reduction in tariffs;time of delivery;agricultural trade policy;real exchange rate;trading rights;agricultural protection;import volume;protection rate;comparative advantage;automobile sector;pricing system;tariff reduction;skilled labor;domestic input;agricultural import;intermediate input;trading partner;industrial product;labor-intensive industry;unskilled worker;accession package;tariff reform;tariff binding;Exchange Rates;foreign exchange;partial liberalization;increased competition;trade enterprise;agricultural sector;export share;export volume;weighted average;manufacturing sector;simple average;import share;welfare gains;protective barrier;grain price;apparel sector;import intermediates;high-tech sector;liberalization measure;foreign enterprise;export processing;trading system;economic reform;special arrangement;output growth;heavy reliance;baseline scenario;export sector;refined oil;cost structure;protective effect;factor endowment;production sharing;chemical fertilizer;accession process;labor-intensive agricultural;dairy industry;personal communication;projection period;human capital;wood product;demographic dividend;consumer demand;tariff line;meat industry;income elasticity;income growth;world market;import market;agricultural commodity;commodity price;customs authority;industrialized economy;manufactured goods;intraindustry trade;export drive;standard deviation;percent change;initial investment;General Administration;command economy;intraregional trade;protective impact;international market;model result;transition economy;apparel export;export quota;market liberalization;world economy;market demand;protection level;trade pattern;Transition economies;industrial country;trade costs;conventional instrument;trade volume;input use;production chain;conventional policy;domestic price;bilateral negotiation;primary product;transition period;sale decision;administrative action;customs valuation;trips agreement;base year;agricultural price;Trade Policies;economic history;accession negotiation;accession agreement;capital good;tariff exemption;empirical research;vegetable oil;commodity group;grain trade;reform process;clothing products;direct regulation;enterprise sector;behavioral response;domestic demand;effective monopoly;draft agreement;negative protection;audiovisual service;welfare change;poor farming;beneficial impact;food buyer;net exporter;tariff equivalent;agricultural production;positive growth;constant return;apparel product;automobile industry;assembly line;reducing protection;import data;merchandise trade;tariff protection;food product;import side;Extractive Industry;rapid change;

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Citation

Ianchovichina, Elena Martin, Will

Trade liberalization in China's accession to the World Trade Organization (English). Policy, Research working paper ; no. WPS 2623 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/275091468770463367/Trade-liberalization-in-Chinas-accession-to-the-World-Trade-Organization