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

Lafang Wang, Mingyong Lai and Baojun Zhang

International Journal of Trade and Global Markets, 2007, vol. 1, issue 1, 23-43

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. (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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