Economic Effects of China's Import Expansion Strategy

Since 2018,Chinahasenactedastringofpolicyinitiativestoincrease imports. To quantify this import expansion strategy’s economic effects, we created a large numericalgeneralequilibriummodelandquantitativelysimulatedtheeconomiceffects ofthereductionsoftariffandnon-tariffbarriersonChinaandothereconomies.Our simulation results show that overall, China’s import expansion strategy benefited both itself and others and contributed to employment, welfare, and trade growth in China and the rest of the world. In relative terms, however, China’s import expansion strategy benefited other countries more than it did itself and contributed more to the growth of the world economy.Additionally, the import expansion strategy may effectively promote China’s trade balance,andthetradeequilibriumeffectdrivenbythereductionofnon-tariffbarriersismore significant than that of tariff barriers. Furthermore, regarding the self-benefiting effects of import expansion, the effects of nontariff measures are significantly greater than those of tariff measures, and this result has policy implications for China’s import expansion strategy going forward.