| Abstract: | To examine the impact of trade barrier reductions on the Chinese economy following its WTO accession, a single‐country, static CGE (Computable General Equilibrium) model is constructed, which incorporates certain elements of imperfect competition in China's current economic situation. China's real GDP and total employment are expected to rise by small degrees, while the general price level may decline by a few percentage points. Total imports would rise by more than 10%, whereas total exports would increase far less. China's trade surplus is, therefore, likely to shrink substantially and its dependence upon foreign trade is likely to rise by a few percentage points. A sensitivity analysis confirms the robustness of the simulation results. A comparison with other CGE studies on China's trade liberalization also shows the plausibility of this study's predictions. JEL Classification: F17, C68 |
