Author

Winnie Lam

Date of Award

1996

Degree Type

Dissertation

Degree Name

Doctor of Philosophy

Abstract

This thesis assesses the effects of China's trade, foreign investment, and factor market reforms on China and on its neighbouring Asian countries using a static, multi-country computational general equilibrium model. Existing literature concentrates on the analysis of the piecemeal abolition of distortions in the Chinese economy (Zhuang (1992)). One notable feature of this study is that special emphasis is placed on the interactive effects among individual reforms in China. This issue is particularly important for Chinese policy makers as they embark on the experimentation with major economic reforms. The results indicate that trade reform would not be nearly as successful without the complement of the foreign investment reform and vice versa. Moreover, foreign investment reform alone may lead to considerable increases in outputs in China's domestically subsidized sectors, which then exacerbates the country's domestic misallocation of resources.;This study also differs from others in highlighting the effects of China's foreign sector reforms on neighbouring Asian economies. On the one hand, these Asian economies welcome the potential benefits of expanded trade and investment opportunities with China. On the other hand, trade-reliant Asian economies (especially the Asian NICs and the ASEAN) are uncertain about the prospective heightened competition with China in exporting labour-intensive goods to their most important export market, the developed countries.;The results indicate that the Asian NTCs, which are closely linked with China in trade and foreign investment, are consistently estimated to gain the most from China's foreign sector reforms among these other Asian regions. In contrast, the ASEAN countries, which are relatively similarly endowed as China's, are found to compete more intensively with China in their exports, and consequently they experience much smaller overall welfare gains.;Data analysis relies crucially on the accuracy of data sources. Studies on China have often been constrained by sporadic and sometimes non-existent data. A major undertaking in this study is to systematically utilize existing information in order to estimate the extent of China's quantitative trade restrictions and domestic factor market distortions at the baseline period, and recast these estimates into a form suitable for quantitative work.

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