This paper evaluates the global welfare impact of China's trade integration and technological change in a multi-country quantitative Ricardian-Heckscher-Ohlin model. We simulate two alternative growth scenarios: a "balanced" one in which China's productivity grows at the same rate in each sector, and an "unbalanced" one in which China's comparative disadvantage sectors catch up disproportionately faster to the world productivity frontier. Contrary to a well-known conjecture (Samuelson 2004), the large majority of countries experience significantly larger welfare gains when China's productivity growth is biased toward its comparative disadvantage sectors. This finding is driven by the inherently multilateral nature of world trade.
di Giovanni, Julian, Andrei A. Levchenko, and Jing Zhang.
"The Global Welfare Impact of China: Trade Integration and Technological Change."
American Economic Journal: Macroeconomics,
Empirical Studies of Trade
Economic Growth of Open Economies
International Linkages to Development; Role of International Organizations
Technological Change: Choices and Consequences; Diffusion Processes
Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
Socialist Systems and Transitional Economies: National Income, Product, and Expenditure; Money; Inflation
Socialist Institutions and Their Transitions: International Trade, Finance, Investment, Relations, and Aid