Estimation of Welfare Change due to the Trade Environment Change in China after Joining the World Trade Organization in 2001

Katsufumi Fukuda

Abstract


The measurement of welfare brought about by trade environment change has long been a heated topic in international trade analysis. By utilizing compensating variation (by Grinols and Wong, and Irwin) and equivalent variation methodology, we separately measured not only the directions but also the magnitudes of the welfare changes that occurred after shocks to China in the following period: welfare change between 2001 and 2004 after China’s entrance into the World Trade Organization (WTO). The result shows that China gained up to 4.8% of GDP in welfare after its entrance into the WTO. The original methodology offered by previous studies as well as the EV measurement is also reviewed in this paper.


Keywords


Trade welfare, WTO joining, China

Full Text:

PDF

References


Bernhofen, D. M., Brown, J. C. (2005). An empirical assessment of the comparative advantage gains from trade: evidence from Japan, American Economic Review, 95, pp. 208–25.

Grinols, E. L., Wong, K-Y. (1991). An exact measure of welfare change, Canadian Journal of Economics, XXIV, pp. 428–49.

Haggay, E., Assaf, Z. (2015). When trade stops: Lessons from the Gaza blockade 2007–2010, Journal of International Economics, 95, pp. 16–27.

Irwin, D. A. (2005). The welfare cost of autarky: evidence from the Jeffersonian trade embargo, 1807–09, Review of International Economics, 13, pp. 631–45.

Jose, A. C. (2002). The Marshall Plan and the Spanish postwar economy: a welfare loss analysis, Economic History Review, 65, 1, pp. 91-119.

Mas-Colell, A., Whinston, M and Green, J. (1995) Microeconomic Theory, Oxford University Press, New York.

Ministry of Commerce of the People’s Republic of China. (2003). The Historical Backgrounds of China’s Entrance into the World Trade Organization. Retrieved from http://cwto.mofcom.gov.cn/article/sjzl/201001/20100106765404.shtml

Ministry of Commerce of the People’s Republic of China. (2003). How do Chinese Enterprise Face Anti-dumping Investigations?. Retrieved from http://sanfrancisco.mofcom.gov.cn/article/ztdy/200304/20030400080926.shtml

National Bureau of Statistics of China. (2018). China Statistics Yearbook. Retrieved from http://www.stats.gov.cn/english/statisticaldata/annualdata/

Samejima, K. (Eds.). (2001). The Impact of China’s Joining WTO. Tokyo: Nikkei

Shirai, S. (2009). The Impact of the Subprime Mortgage Crisis on the World and East Asia: Through Analysis of Cross-Border Capital Movement, SFC-RM-2009-001

The World Bank Group. (2019) World Bank Open Data. Retrieved https://databank.worldbank.org/reports.aspx?source=2&country=CHN#




DOI: http://dx.doi.org/10.5202/rei.v10i2.308



E-ISSN 2038 1379 -  2009-2022 University of Perugia