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WTO Accession, "Greater China" Free Trade Area and Economic Integration across the Taiwan Strait

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  • Wang, Zhi
Abstract
This paper evaluates the impact of China's WTO accession on trade and economic relation across the Taiwan Strait and its implications for rest of the world by a recursive dynamic, 17-region, 25- sector computable general equilibrium (CGE) model with import embodied technology transfer, trade policy induced total factor productivity (TFP) growth, and explicit treatment of TRQ of agricultural products. The simulation results shown that China will gains the most from its WTO entry. It will emerge as one of the world largest manufacturing center during its integration into the world economy. Taiwan will become an upstream supplier for China's massive manufacturing productions. Taiwan will gain more economically by further integrate its economy with China via greater China FTA or other means after its WTO entry. The economic dependence of Taiwan on China will further increase and enable China to replace the US as the number one of its export market. A greater China FTA will further reduce the cost of vertical integration among manufacturing industries across the Taiwan Strait and enhance the efficiency of production factor allocation within the three Chinese economies, thus enable them become a stronger competitor of manufactured goods, especially for labor-intensive products, electronics and low-end capital-intensive products in the world market.

Suggested Citation

  • Wang, Zhi, 2003. "WTO Accession, "Greater China" Free Trade Area and Economic Integration across the Taiwan Strait," Conference papers 331126, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331126
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    Cited by:

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    3. Anderson, Kym & Huang, Jikun & Ianchovichina, Elena, 2004. "Will China's WTO accession worsen farm household incomes?," China Economic Review, Elsevier, vol. 15(4), pages 443-456.
    4. Hung-Gay Fung & Jian Zhang, 2007. "An Assessment of the Closer Economic Partnership Arrangement Between China and Hong Kong," Chinese Economy, Taylor & Francis Journals, vol. 40(2), pages 36-50, April.
    5. Lai, Yung-Lien & Cao, Liqun & Zhao, Jihong Solomon, 2010. "The impact of political entity on confidence in legal authorities: A comparison between China and Taiwan," Journal of Criminal Justice, Elsevier, vol. 38(5), pages 934-941, September.
    6. Andersen, Thomas Barnebeck & Barslund, Mikkel & Hansen, Casper Worm & Harr, Thomas & Jensen, Peter Sandholt, 2014. "How much did China's WTO accession increase economic growth in resource-rich countries?," China Economic Review, Elsevier, vol. 30(C), pages 16-26.
    7. Huang, Jikun & Rozelle, Scott & Xu, Zhigang & Li, Ninghui, 2005. "Impacts Of Trade Liberalization On Agriculture And Poverty In China," Agricultural Policy Papers 23681, Massey University, Centre for Applied Economics and Policy Studies.
    8. Chao, Chi-Chur & Yu, Eden S.H. & Yu, Wusheng, 2009. "Government budget, public-sector wages and capital taxes in a small open economy: A Hong Kong case," China Economic Review, Elsevier, vol. 20(1), pages 54-64, March.
    9. Peter Drysdale & Xinpeng Xu, 2007. "Taiwan's Role in the Economic Architecture of East Asia and the Pacific," World Scientific Book Chapters, in: Julian Chang & Steven M Goldstein (ed.), Economic Reform And Cross-Strait Relations Taiwan and China in the WTO, chapter 5, pages 149-185, World Scientific Publishing Co. Pte. Ltd..
    10. Hua, Jian & Wu, Yi-Hsuan & Jin, Pang-Fu, 2008. "Prospects for renewable energy for seaborne transportation—Taiwan example," Renewable Energy, Elsevier, vol. 33(5), pages 1056-1063.
    11. Elena IANCHOVICHINA & Will MARTIN, 2006. "Trade Impacts of China's World Trade Organization Accession," Asian Economic Policy Review, Japan Center for Economic Research, vol. 1(1), pages 45-65, June.
    12. Terrie L. Walmsley & Thomas W. Hertel & Elena Ianchovichina, 2006. "Assessing The Impact Of China'S Wto Accession On Investment," Pacific Economic Review, Wiley Blackwell, vol. 11(3), pages 315-339, October.
    13. Hwee Kwan Chow, 2010. "Asian Tigers’ Choices : An Overview," Trade Working Papers 21879, East Asian Bureau of Economic Research.
    14. Elena Ianchovichina & Terrie Walmsley, 2005. "Impact of China's WTO Accession on East Asia," Contemporary Economic Policy, Western Economic Association International, vol. 23(2), pages 261-277, April.
    15. Alicia Garcia-Herrero, 2015. "Determinants of Trade in Parts and Components: An Empirical Analysis," Working Papers 1524, BBVA Bank, Economic Research Department.
    16. Dean, Judith & Fung, K.C. & Wang, Zhi, 2008. "How vertically specialized is Chinese trade?," BOFIT Discussion Papers 31/2008, Bank of Finland Institute for Emerging Economies (BOFIT).
    17. Thomas Gries & Margarete Redlin, 2008. "International Integration and Regional Development in China," WIDER Working Paper Series RP2008-66, World Institute for Development Economic Research (UNU-WIDER).
    18. Chao, Chi-Chur & Yu, Eden S.H. & Yu, Wusheng, 2006. "China's import duty drawback and VAT rebate policies: A general equilibrium analysis," China Economic Review, Elsevier, vol. 17(4), pages 432-448.
    19. Bi-Huei Tsai, 2017. "Predicting the competitive relationships of industrial production between Taiwan and China using Lotka–Volterra model," Applied Economics, Taylor & Francis Journals, vol. 49(25), pages 2428-2442, May.

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