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

Data from China's national rural and urban household surveysare used to measure and explain the welfare impacts of changesin goods and factor prices attributable to accession to theWorld Trade Organization. The price changes are estimated separatelyusing a general equilibrium model to capture both direct andindirect effects of the initial tariff changes. The welfareimpacts are first-order approximations based on a householdmodel incorporating own-production activities calibrated tohousehold-level data and imposing minimum aggregation. The resultsshow 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 incomesources, with possible implications for compensatory policyresponses.