Expanding The Trade And Welfare Effects Of Intermediate Goods Import Policy In High-tech Industry

In the sino-US trade war in 2018,the "Huawei chip supply cut-off" incident of the United States to China sounded the alarm for the import of intermediate products in China’s high-tech industry.The State Council subsequently issued a document on balanced trade development,which pointed out increasing the import of technology and equipment conducive to transformation and development.After that,The State Council’s high-quality Trade Development document in 2021 further pointed out expanding the import of advanced equipment and parts.In order to accurately quantify the trade volume effect and welfare effect of the policy of expanding the import of intermediate goods in high-tech industry,based on Caliendo and Parro(2015),this paper constructed a multi-country and multi-sector general equilibrium model to distinguish intermediate goods from final goods.Counterfactual simulation method is used to quantify the impact of lowering tariff barriers and adjusting tariff and non-tariff walls simultaneously(i.e.cutting trade costs)on China’s high-tech industry and the overall import and export of China,as well as the impact on China’s overall welfare.In the basic counterfactual simulation,it is found that the reduction of tariff barrier of intermediate goods import in China’s high-tech industry has a positive effect on the import and export of intermediate goods and the export of final goods,and has a restraining effect on the import of final goods.Moreover,the trade effect and welfare effect of reducing tariff barriers of intermediate goods import in China’s high-tech industry are not only related to the reduction of tariff range,but also have an important relationship with the tariff structure.When further expanding the range of tariff reduction,it is found that changing the counterfactual tariff level from the 2007 level of China to the 2007 level of the United States not only increases China’s welfare benefit from 0.0413% to 6.4658%,but also transfers the largest welfare benefit country from South Korea to China.After introducing the change of non-tariff barrier,we find that although the reduction of trade cost of intermediate goods in China’s high-tech industry from 2000 to 2007 can improve China’s welfare level,the welfare benefit is smaller than that of only reducing tariffs.The reason lies in the rise of non-tariff barriers for China’s import of intermediate products in high-tech industry brought about by the policy of "high-tech export restriction" in developed countries.Based on the above analysis,this paper puts forward some suggestions: in order to maximize the welfare effect,we should not only reduce the overall tariff level,but also actively adjust the tariff structure when implementing the import expansion policy.Not only should tariff instruments be actively used,but also non-tariff barriers should be adjusted.