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GTAP Resources: Resource Display

GTAP Resource #5041

"The Effect of Reducing Investment Barriers in China’s Services Sectors"
by Yuan, Wen


Abstract
This paper uses an extended GTAP model (GTAP-FDI model), which was development by Lakatos and Fukui (2013) to quantify the effect of removing FDI restrictions in China’s service sectors, in particular China’s financial services sector. This paper also extends the standard GTAP model by using a flexible labor supply closure, rather than assuming that the labor supply is fixed. This assumption allows the model to estimate the change of aggregate employment, as well as change of employment in different sectors in China in response to the removal of FDI restrictions. The author finds that a complete removal of FDI restrictions in China’s financial services sector in particular will increase Chinese welfare by $27.7 billion. Foreign affiliate sales in China’s financial service sector will increase significantly, but it will also hurt Chinese domestic investment in the financial services sector. Meanwhile, the removal of FDI barriers in China’s financial services sector will benefit moderately aggregate employment in China, but will hurt employment in Chinese-owned financial services sector in particular. Moreover, a complete removal of FDI restrictions in all Chinese services sectors will increase Chinese welfare significantly (by $228.2 billion), and will also moderately benefit Chinese aggregate employment.


Resource Details (Export Citation) GTAP Keywords
Category: 2016 Conference Paper
Status: Published
By/In: Presented at the 19th Annual Conference on Global Economic Analysis, Washington DC, USA
Date: 2016
Version:
Created: Yuan, W. (4/15/2016)
Updated: Yuan, W. (4/15/2016)
Visits: 359
- Baseline development
- Foreign direct investment
- Non-Tariff measures in services
- Trade in services
- Asia (East)


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