15-JUN-1993 14:13
DEL (UK)
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OECD FUTURE STUDIES INFORMATION BASE
0301
THE CHINESE ECONOMIC AREA: ECONOMIC INTEGRATION WITHOUT A FREE TRADE AGREEMENT
By Jones, Randall; King, Robert; Klein, Michael. Working Paper No. 124, OECD Economics Department, Paris, FR, 44 P. (1992)
The emergence of a Chinese economic area (CEA) comprising China, Hong Kong, and Taiwan is described, and the impact on the world economy is assessed in a scenario up to 2030. Rapid growth of the CEA is possible due to Taiwan's capital and technical and managerial know- how, Hong Kong's intermediation services, and China's cheap labour and natural resources. The scenario assumes that world trade grows by 5.8% p.a. over 1990-2030, and real GDP in OEÇD countries by 2.9% p.a., while China's real GDP grows by 7% p.a. (5.6% per capita) versus 8.1% p.a. in the 1980s. China would thus reach Mexico's 1992 per capita income level by 2030. As China implements outward-oriented policies and further integrates with the world economy, growth of export of goods and non-factor services is assumed to expand by 8% p.a., raising the export to GDP ratio from 14% in 1992 to 20% by 2030. By 2000 the CEA (netting out intra- trade) would then account for 4.4% of world GDP (3% in 1992) and 6.5% of world trade (4.2%). By 2030, share of world GDP would be 12%, share of world trade 20% (the USA's 1992 share was 14%). By 2000, the CEA's share of world exports would exceed Japan's. Chinese exports would compete mainly with those of middle-income developing countries and the lower end of exports from OECD countries. The OÈCD countries would benefit from higher exports to China of capital goods and technology-intensive products. If China follows Taiwan's path, changing its production structure from agriculture and processing of primary products to manufacturing based on unskilled labour, there may also be room for increased food imports from the OECD.
GD: Country Studies; Economic Development
SD: Regional Integration; Free Trade; Economic Growth; International Trade; Economic
Integration
GE: China; Taiwan; Hong Kong
LO: OECD, Economics Department, Paris, FR
(Ref. no.: OCDE/GD(92)142)
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