1996/1997 and 2005. Only McKibbin and Tang (2000) conclude that trade liberalization in China would lead to a decline in exports due to a projected strengthening of the yuan. Since this scenario significantly departs from the developments in China during the period from 1997 to 2005, when the yuan remained pegged to the dollar and even strengthened relative to the currencies of countries affected by the Asian crisis (Yang and Tyers, 2001), their results are not discussed further and are omitted from Table 2.

**Table 2 Simulated Effects of WTO Accession on China’s Exports**

|Study|Results|Model closure|Model Specification|Data & policy shocks|
|---|---|---|---|---|
|Wang (1997)|51 cumulative<br>percentage<br>point increase<br>relative<br>to<br>baseline<br>(1996-2005)|Static capital market<br>closure with fixed<br>capital stock and<br>trade balance in a<br>multi-country<br>extension of the<br>model of de Melo<br>and Tarr (1992)|Perfect competition,<br>endogenous savings,<br>CES function allows for<br>substitutability between<br>value added and<br>aggregate inputs;<br>international shipping<br>sector a la GTAP;|Version 3 GTAP Database<br>aggregated into 12 regions<br>and 14 sectors;<br>35% reduction in average<br>tariffs due to accession<br>between 1996 and 2005,<br>removal of quotas on<br>textiles and apparel in US<br>and EU|
|Wang (1997)|57 cumulative<br>percentage<br>point increase<br>relative<br>to<br>baseline<br>(1996-2005)|Steady state capital<br>market closure with<br>endogenous capital<br>stock in a multi-<br>country extension of<br>the model of de Melo<br>and Tarr (1992)|Perfect competition,<br>endogenous savings,<br>CES function allows for<br>substitutability between<br>value added and<br>aggregate inputs;<br>international shipping<br>sector a la GTAP|Version 3 GTAP Database<br>aggregated into 12 regions<br>and 14 sectors;<br>35% reduction in average<br>tariffs due to accession,<br>removal of quotas on<br>textiles and apparel in US<br>and EU|
|Wang (2003)|54 cumulative<br>percentage<br>point increase<br>relative<br>to<br>baseline<br>(2000-2010)|Recursive dynamic<br>extension of the<br>model in Wang<br>(1997) with import<br>embodied technology<br>transfer|Perfect competition,<br>endogenous savings,<br>CES function allows for<br>substitutability between<br>value added and<br>aggregate inputs;<br>international shipping<br>sector a la GTAP|Version 5 GTAP Database<br>aggregated into 17 regions<br>and 25 sectors;<br>approximately 50%<br>reduction in average<br>tariffs due to accession,<br>removal of quotas on<br>textiles and apparel in US<br>and EU, efficiency gains<br>from sector-specific<br>technology transfers|
|Ianchovichina<br>and<br>Martin<br>(2004)|40 cumulative<br>percentage<br>point increase<br>relative<br>to<br>baseline<br>(1997-2007)|Static capital market<br>closure with fixed<br>capital stock and<br>trade balance fixed as<br>a share of GDP, trade<br>taxes replaced by a<br>consumption tax in<br>GTAP-DD<br>(Ianchovichina|Perfect competition,<br>fixed propensity to save,<br>CET function between<br>value added and<br>aggregate inputs, fixed<br>full employment, perfect<br>mobility of skilled and<br>unskilled labor between<br>manufacturing sectors|<br>Version 5 GTAP Database<br>aggregated into 20 regions<br>and 25 sectors; 14%<br>reduction in average<br>tariffs between 1997 and<br>2005, duty exemptions on<br>imported inputs used in<br>the production of exports,<br>removal of quotas on|

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