Impacts of trade liberalization with China and Chinese FDI on Laos : evidence from the CGE model

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

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Detail(s)

Original languageEnglish
Pages (from-to)215-228
Journal / PublicationJournal of Chinese Economic and Business Studies
Volume15
Issue number3
Publication statusPublished - 3 Jul 2017

Abstract

The Lao-Chinese railway will be completed by 2020. It is a strategic route of China’s One-Belt-One-Road policy to reach out to SouthEast Asia, linking Kunming and Vientiane. Surrounded by Thailand, Myanmar, Cambodia, Vietnam, and China; Laos is small economy with a population of 6.90 million in 2014. It has been one of least developed economies in the world for several decades. With increased trade liberalization and FDI, Laos has robust GDP growth in the
past two decades. In particular, the amount of FDI in Laos quickly jumps by more than 100% in 2014, because of massive increases in Chinese FDI. This paper summarizes major policies in Laos on trade liberalization and FDI and applies Computable General Equilibrium model to estimate how trade liberalization with China and Chinese FDI would affect Laos in terms of economic performance, outputs on various sectors, and poverty reduction. Our results show the
following interesting findings: (a) both have positive impacts on overall economic performance; (b) some sectors in Laos have their outputs declined by trade liberalization with China; (c) both have positive impacts on reducing poverty in Laos but Chinese FDI is more able to narrow income gap in the country.

Research Area(s)

  • CGE model, China, foreign direct investment (FDI), Laos, Trade liberalization

Citation Format(s)

Impacts of trade liberalization with China and Chinese FDI on Laos : evidence from the CGE model. / Kyophilavong, Phouphet; Wong, Michael C. S.; Souksavath, Somchith; Xiong, Bin.

In: Journal of Chinese Economic and Business Studies, Vol. 15, No. 3, 03.07.2017, p. 215-228.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review