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THE WORLD BANK ECONOMIC REVIEW, VOL. 18, NO. 1, 29-57
THE WORLD BANK ECONOMIC REVIEW, VOL. 18, NO. 1,
© The International Bank for Reconstruction and Development / THE WORLD BANK 2004; all rights reserved

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

Shaohua Chen and Martin Ravallion

Shaohua Chen is senior information officer at the World Bank; her e-mail address is schen{at}worldbank.org. Martin Ravallion is research manager at the World Bank; his e-mail address is mravallion{at}worldbank.org.

Abstract

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


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