A Study On The Welfare Effect Of China's Trade Liberalization

Since the reform and opening up,China's foreign trade develops rapidly,which has made remarkable achievements.There is no doubt that the great achievements of foreign trade in China are closely connected with the trade liberalisation since the 1990 s,as the main content to reduce tariff and non-tariff barriers.However,high speed development does not mean high quality development.In the behind of the prosperous development of trade,there are also many problems and challenges.What effect did the vigorous development of trade bring to the development of economic and social? Scholars conducted a lot of exploration and research on this question from different perspectives.The welfare effect of trade liberalization is one ancient and core issue.So far,however,discussion on this issue does not have a consistent conclusion.So,what effect does China's trade liberalization have on Chinese welfare level? Does there exist difference between different areas and different groups of the welfare effect of trade liberalization in China? Obviously,the answer to these questions can help us to better evaluate the gains and losses of the trade liberalization reform in China,and also can contribute to providing references for China's future trade policy adjustment and in-depth reform.Based on the realistic background and from the micro and macro aspects,this dissertation comprehensively and systematically investigates the impact of trade liberalization on the welfare of Chinese producers,consumers and the whole social,by using Chinese provincial panel data and microscopic data of family income survey and manufacturing firm.Specifically,we first briefly review the China's trade liberalization and the periodic evolution characteristic of trade policy since the reform and opening up,construct the measurement index of trade liberalization,and quantitatively analyze the measurement result of the trade liberalization level of the whole China,all kinds of goods and every industries.Then we analyze the mechanism of action of the impact of trade liberalization on producers,consumers and social welfare,and construct econometric model on the basis of analysis to empirical test to investigate the impact of trade liberalization on the welfare of Chinese producers,consumers and the whole social.Finally,we get the conclusion of this dissertation,give corresponding policy implications based on the conclusion,and summarize the shortcomings and direction of extension in the future.The main research conclusion of this dissertation can be listed as follows:First,the producer welfare effect of China's trade liberalization: The tariff concession of intermediate inputs significantly increases the profit margin of firms by cost-reduction effect.However,the tariff concession of final goods reduces the profit margin of firms by import competition effect.In the short term,trade liberalization is not favorable to increasing firms' welfare.The influence of tariff concession of intermediate inputs and final goods on local firms and non-export firms is greater than that on foreign firms and export firms respectively.Second,the consumer welfare effect of China's trade liberalization through tariff reduction: From the point of consumption effect,all provinces are benefited from the fall in consumer prices brought by tariff reduction.The average consumption effect of eastern region is higher and western region is lower.As the family per capita income increases,consumption effect shows a trend of decline.From the point of wage effect,all provinces are benefited from the rise in wages brought by tariff reduction.The average wage effect of western region is higher,eastern region is middle,and central region is lower.As the family per capita income increases,wage effect shows a trend of first rise then decline.From the point of welfare effect,trade liberalization improves the welfare level of all households,and low-income families benefit more.Trade liberalization inclines to promote the welfare of low-income families more.Third,the consumer welfare effect of China's trade liberalization through imported species growth: From 1998 to 2001,the upward bias of China's import price index is 3.78% due to ignoring the growth of varieties,and the welfare gains of Chinese consumers from variety growth is 0.44% of GDP in 2001.From 2001 to 2005,the upward bias of China's import price index is 6.69% due to ignoring the growth of varieties,and the welfare gains of consumers is 1.08% of GDP in 2005.From 2005 to 2010,the downward bias of traditional import price index is 7.01%,and the welfare loss of consumers from variety change is 1.08% of GDP in 2010.From the point of goods categories decomposition of China's import price bias index,the contribution of consumer goods and capital goods to China's import price bias index is significantly higher than primary goods and intermediate goods;From the point of industry decomposition,the instruments,meters,and culture,office machinery manufacturing industry(41)and contribution of network equipment,computers and other electronic equipment manufacturing industry(40)to China's import price bias index is the highest.Fourth,the social welfare effect of China's trade liberalization:There's significant and stable positive correlation between trade liberalization and social welfare level.The trade liberalization of primary goods,capital goods,intermediate goods,and consumer goods have a significant role in promoting the social welfare level,of which,the welfare promotion effect of consumer goods is more significant,and the effect of capital goods is relatively small.The influence of trade liberalization on social welfare of the western region is the largest,of the eastern region ismoderate,and the improvement of social welfare in central region is not obvious.The impact of trade liberalization on social and economic development is bigger,on ecological construction and people's livelihood is smaller,and the promotion of scientific and technological innovation is not significant.In conclusion,from the macro aspect,trade liberalization promotes the Chinese social welfare level,but there are differences of the influence for different regions and different development aspects;From the micro aspect,trade liberalization improves the welfare level of consumers,but in the short term,trade liberalization is not favorable to increasing firms' welfare,and also,for different types of groups,the influence of trade liberalization is different.