China and the World Economy by David Greenaway, Chris Milner, Shujie Yao (eds.)

By David Greenaway, Chris Milner, Shujie Yao (eds.)

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Melitz, M. (2003), The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity, Econometrica, 71(6), 1695–725. Polaski, S. (2005), Winners and Losers: Impact of the Doha Round on Developing Countries, Carnegie Endowment for International Peace, Washington DC. van der Mensbrugghe, D. 0, World Bank, Development Prospects Group, Washington DC. van der Mensbrugghe, D. (2006), Estimating the Benefits: Why Numbers Change, in Newfarmer, R. ) Trade, Development and Doha: A Window into the Issues, World Bank, Washington DC.

The dramatic growth in China’s exports of electronic products since the signing of the Information Technology Agreement is further evidence that such linkages can have important effects on growth and transformation. The dynamic process of trade expansion associated with economic growth and trade liberalization has been given a new interpretation by Melitz (2003). Melitz argues that liberalization stimulates entry of the more efficient firms into exporting, and that the resulting reallocation of resources provides a stimulus to productivity that is additional to learning by doing through exporting.

The elimination of trade-distorting farm policies in high-income countries accounts for three-fourths of those gains. Notice too that as much of the gain to developing countries from farm reform results from South–South agricultural liberalization as from developing countries’ unrestricted access to markets in high-income countries. 4 Regional and sectoral source of gains from full liberalization of global merchandise trade, developing and high-income countries, 2015, (relative to the baseline scenario) Gains by region in $ billion % of regional gain Developing High- World Developing High- World income income Developing countries liberalize: Agriculture and food Textiles and clothing Other merchandise All sectors 28 9 6 43 19 14 52 85 47 23 58 128 33 10 7 50 9 7 26 42 17 8 20 45 High-income countries liberalize: Agriculture and food Textiles and clothing Other merchandise All sectors 26 13 4 43 109 2 5 116 135 15 9 159 30 15 5 50 54 1 3 58 47 5 3 55 All countries liberalize: Agriculture and food Textiles and clothing Other merchandise All sectors 54 22 10 86 128 16 57 201 182 38 67 287 63 25 12 100 63 8 29 100 63 14 23 100 Source: Authors’ estimates.

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