Longyue Zhao, Mariem Malouche and Richard Newfarmer
The purpose of this paper is to provide a timely review and analysis of China's regional trade agreements, its motivations, and its economic implications for Association of…
Abstract
Purpose
The purpose of this paper is to provide a timely review and analysis of China's regional trade agreements, its motivations, and its economic implications for Association of Southeast Asian Nations (ASEAN)‐China Free Trade Agreement (ACFTA) member countries and other trading partners.
Design/methodology/approach
The paper uses the SMART model of the World Integrated Trade Solution to quantify the economic implications of the ACFTA on merchandise trade flows among member countries and other trading partners. Then, for comparative purposes, the impact of two possible paths beyond the ACFTA is simulated: an East Asia Free Trade Agreement (EAFTA) and the possible Doha Round multilateral trade liberalization.
Findings
The paper finds that, if regional and bilateral trade arrangement (RTA) were only concentrated in tariff reductions, the impact on trade flows would be quite limited. China's trade liberalization will bring the similar impacts to ASEAN in three of the scenarios modeled. Japan and Korea would get more market access to China if an EAFTA were to become reality. Only in a multilateral liberalization would all RTA member countries and the rest of the world benefit.
Research limitations/implications
Three limitations are noteworthy. First, these types of models capture only static gains from trade. Second, the simulations do not include services liberalization, which could readily provide benefits in several multiples of merchandise trade, and third, it is assumed that full removal of all border barriers at once, in a multilateral scenario, would be of illuminating heuristic value but is unlikely to occur in reality.
Originality/value
The paper demonstrates the wisdom of China's simultaneous pursuit of unilateral, regional and multilateral liberalization – because the wider the trading group involved in the liberalization, the more China and its partners will benefit. The tariff reductions in RTAs will have limited effects on expanding merchandise trade, especially when compared with comprehensive and multilateral liberalization agreements.
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Longyue Zhao and Yan Wang
World Trade Organization (WTO) accession marked a new beginning for China's economic, legal and institutional reforms and rapid integration with the rest of the world. The purpose…
Abstract
Purpose
World Trade Organization (WTO) accession marked a new beginning for China's economic, legal and institutional reforms and rapid integration with the rest of the world. The purpose of this paper is to review China's post‐WTO transition experience, synthesize and update studies on China's pattern of trade and structural transformation, and provide both positive and negative lessons for other developing countries.
Design/methodology/approach
The paper has broadly reviewed the latest policy changes after China's WTO accession, and literatures on China's trade and economic development issues in order to understand the Chinese success and its speciality, and draw some useful lessons for both China's decision‐makers and other developing countries.
Findings
There are two main findings: first, market liberalization alone is not sufficient, and economic system reform and the liberalization are closely related and complement and promote each other. Second, experimentations via special economic zones (SEZs) and opening to foreign direct investment (FDI), which facilitated and supported cluster development and learning‐by‐doing, are needed for industrial upgrading and export competitiveness.
Originality/value
The paper demonstrates the wisdom of China's simultaneous pursuit of domestic economic system reform, and opening to the international market. However, China has also paid a high social and environmental cost for its rapid growth. It is important for developing countries to have an exclusive, balanced and sustainable strategy in the future development.
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The purpose of this paper is to analyze the mechanism of the role of government subsidies on corporate environmental investment and explore how specific characteristics of firms…
Abstract
Purpose
The purpose of this paper is to analyze the mechanism of the role of government subsidies on corporate environmental investment and explore how specific characteristics of firms affect corporate environmental responsibility.
Design/methodology/approach
This paper examines the relationship between government subsidies and corporate environmental investment and models with a sample of 78,854 industries. The authors measure the corporate environmental investment by the natural logarithm of the volume of waste gas treatment facilities.
Findings
The results show the positive effect of government subsidies on corporate environmental investment. In addition, state ownership positively regulates the relationship between government and corporations, but the relationship between them is negatively regulated by the slack resources.
Practical implications
When people are increasingly concerned about corporate social and environmental responsibility, clarifying the link between government subsidies and corporate environmental investments can help policymakers formulate policies and allocate limited resources.
Originality/value
This study uses the resource-based view as a theoretical framework to reveal the mechanism of action between government subsidies and corporate environmental responsibility, enriching the previous literature that explores the issue based on the legitimacy perspective.