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

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
(WTO). 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.