Why does China protect its labour-intensive industries more?

Sebastián Claro*

*Autor correspondiente de este trabajo

Resultado de la investigación: Contribución a una revistaArtículorevisión exhaustiva

6 Citas (Scopus)

Resumen

China's tariff structure favours labour-intensive sectors, and this is at odds with traditional theory of comparative advantage. The paper argues that tariffs in China are a mechanism for protecting technology-backward domestic - especially state-owned enterprises (SOEs) from competition technology-advanced foreign enterprises producing in China. With relatively integrated labour markets and cross-firm technology differences, SOEs' subsistence is supported by subsidized credit and limited access of foreign firms' local production to tariff-protected domestic markets. Labour market integration and capital subsidies increase the relative cost of labour in SOEs compared to their foreign competitors, hurting more domestic firms in industries that use labour more intensively. Restrictions to FIEs' (foreign-invested enterprises) access to tariff-protected product markets, which protect more labour-intensive industries, compensate for the greater cost disadvantage of SOEs in labour-intensive sectors.

Idioma originalInglés
Páginas (desde-hasta)289-319
Número de páginas31
PublicaciónEconomics of Transition
Volumen14
N.º2
DOI
EstadoPublicada - 2006
Publicado de forma externa

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