The Effectiveness of China's Foreign Trade Liberalization

Abstract

This paper studies the ex-post trade effects of China's multilateral, regional and bilateral trade liberalization using augmented gravity and panel data estimation methods for the period 1995–2016. China's accession to the WTO was revealed to have had a significant impact on the volume of trade as well as on bilateral exports and imports. Regional trade agreements and the majority of bilateral trade agreements were found not to be effective in increasing China's foreign trade. Only the agreements with Chile, Costa Rica and Switzerland were effective in increasing China's trade volume. Moreover, the results for Chile were driven by increases in both exports and imports, while for Costa Rica and Switzerland only by increased imports from these countries.

Keywords

• china
• trade liberalization
• incomplete specialization
• gravity model
• wto