Title: The transmission effects of iron ore price shocks on China's economy and industries: a CGE approach

Authors: Lafang Wang, Mingyong Lai, Baojun Zhang

Addresses: School of Economics and Trade, Hunan University, Changsha 410079, PR China. ' School of Economics and Trade, Hunan University, Changsha 410079, PR China. ' School of Statistics, Hunan University, Changsha 410079, PR China

Abstract: This paper assesses the transmission impacts of world iron ore price fluctuation on China|s macroeconomics and industries. The analytical framework is a computable general equilibrium model. The results demonstrate that a sharp increase in imported iron ore price will exert certain negative effects on macroeconomic and industries in China. It exerts a negative chain-effect on regional output and employment in Beijing, Tianjin, Liaoning, Shanghai and Hainan province, while a slight impact on Gansu and Qinghai province. Finally, we carry out the systematic sensitivity analysis, and found that the sensitivity of the model results with respect to import trade function is not strong.

Keywords: iron ore; computable general equilibrium; CGE; FOB price; systematic sensitivity analysis; SSA; price shocks; China; price fluctuation; macroeconomics; regional output; regional employment; imports.

DOI: 10.1504/IJTGM.2007.015574

International Journal of Trade and Global Markets, 2007 Vol.1 No.1, pp.23 - 43

Published online: 31 Oct 2007 *

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