China’s welfare gain from involved mega-regional trade agreements

ABSTRACT

This article draw upon a 29-country numerical general equilibrium model with trade cost and endogenous trade imbalance to simulate China’s welfare gain from negotiating mega-regional trade agreements (mega-RTAs). We introduce elasticity of substitution distributions instead of normally definite values in the model and generate a distribution of impact results ranging among some specific intervals, which injects a new kind of effect presentation style to existing literature. The results of our article reveal that China will gain from all undergoing negotiation mega-RTAs we mentioned in this article, comparatively Regional Comprehensive Economic Partnership will benefit China the most.

KEYWORDS:

• Mega-regional trade agreement
• China
• computational general equilibrium
• welfare

JEL CLASSIFICATION:

• F47
• C68
• F15

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ The RCEP has 16 country members, which are 10 ASEAN countries, Australia, China, India, Japan, South Korea and New Zealand.

² Its member countries include China, Japan and South Korea.

³ It has 11 member countries which are China and 10 ASEAN countries.

⁴ It has seven member countries which are Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, United Arab Emirates and China.

⁵ It includes all 21 APEC member countries.

⁶ The method is to take the ratio of bilateral trade flows over local trade, scaled to some parameter values, and then use a measure that capture all barriers.

Additional information

Funding

This work was supported by the Chinese National Social Science Foundation [15ZDC017, 15CJL042]