Welfare Impacts of China's Accession to the World Trade Organization

Abstract

Data from China's national rural
\n and urban household surveys are used to measure and explain
\n the welfare impacts of changes in goods and factor prices
\n attributable to accession to the World Trade Organization
\n (WTO). The price changes are estimated separately using a
\n general equilibrium model to capture both direct and
\n indirect effects of the initial tariff changes. The welfare
\n impacts are first-order approximations based on a household
\n model incorporating own-production activities calibrated to
\n household-level data and imposing minimum aggregation. The
\n results show negligible impacts on inequality and poverty in
\n the aggregate. However, diverse impacts emerge across
\n household types and regions, associated with heterogeneity
\n in consumption behavior and income sources, with possible
\n implications for compensatory policy responses.