Impact of Economic Policy Reform and Regional and Global Shocks on Trade and Growth in East Asia: Econometric Evidence for China

摘要

In pursuing policies of trade liberalization and growth promotion within the framework of regional economic integration, WTO membership and globalization, major Asian developing economies and China in particular had achieved economic "miracles" in the past decades. Recently however, they face many economical and political challenges, and other domestic or international uncertainty ahead. The paper introduces the generalized gravity theory to construct a simple flexible simultaneous-equation econometric model of growth and trade of China and its five major trading country or blocs. The model incorporates explicitly major temporary and persistent structural change. Using latest data, the paper reports efficient empirical results on trade- growth causality, trade determination and effects of shocks and policy reform on trade and growth between these economies and China over the past two decades.