Effects of WTO Membership on Income Distribution and Labour Movement in China - A CGE Analysis

71 Pages Posted: 27 Jul 2007

See all articles by Jiao Wang

Jiao Wang

London South Bank University

David G. Mayes

University of Auckland Business School (Deceased)

Guanghua Wan

Asian Development Bank Institute

Date Written: December 30, 2005

Abstract

Using a CGE model (PRCGEM) updated to 2002, the paper explores how WTO membership could affect earnings in 40 industries across 31 regions (and 8 regional blocks) of China during the period 2002-2007. Taking into account labour movement between regions within China, the direct contribution of WTO membership to overall economic growth and development is predicted to be small, with a rise in real GDP of only 6.48% short term and 5.6% long term. However, structural economic change and the WTO shock should increase regional output, especially in the established coastal economies. Regional labour movement is found to increase 69.2% at the completion of economic structural reforms. A slight decrease in the Gini coefficient for income inequality is also anticipated.

Keywords: applied CGE modelling, China, WTO, labour movement, inequality

JEL Classification: C68, O18, R12, R23

Suggested Citation

Wang, Jiao and Mayes, David G. and Wan, Guanghua, Effects of WTO Membership on Income Distribution and Labour Movement in China - A CGE Analysis (December 30, 2005). BOFIT Discussion Paper No. 18/2005, Available at SSRN: https://ssrn.com/abstract=1002855 or http://dx.doi.org/10.2139/ssrn.1002855

Jiao Wang

London South Bank University ( email )

103 Borough Road
London, Greater London SE1 OAA
United Kingdom

David G. Mayes (Contact Author)

University of Auckland Business School (Deceased)

12 Grafton Rd
Private Bag 92019
Auckland, 1010
New Zealand

Guanghua Wan

Asian Development Bank Institute ( email )

6 ADB Avenue, Mandaluyong City 1550
Metro Manila
Philippines

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