Protectionism through Exporting: Subsidies with Export Share Requirements in China

Economics

Speaker:Alejandro Riano, University of Nottingham
Date: Wednesday 11 February 2015
Time: 14.00 - 15.30
Location: Bateman Lecture Theatre, Building One

Further details

Subsidies featuring export share requirements (ESR) have been a cornerstone of China's opening to the world economy. In this paper we provide the first quantitative assessment of their impact on welfare and the intensity of competition. We use our model to infer the magnitude of these subsidies so as to reproduce the large number of high-intensity exporters operating in China. We find that subsidies with ESR boost China’s exports while providing heightened protection for domestic firms, albeit at a large welfare cost.