electronic Global Trade Credit Platform/eGTCP's Blog: What Benefits U.S. Consumers A Lot?

2017/07/12

What Benefits U.S. Consumers A Lot?

Since China's accession to the WTO, not only China but also the world can feel the changes brought by the world economy.

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U.S. families benefitted greatly from China's WTO entry in 2001, as prices of manufactured goods like shirts, electronic devices and pet foods fell by 7.6 percent between 2000 and 2006, a recent research paper from a leading U.S. economic research organization showed.

"The impact of China's enormous growth on the rest of the world is an increasingly active area of study," four economists from the United States, China and Australia said in a National Bureau of Economic Research (NBER) working paper released in late June.

The paper found people largely neglected the potential gains of consumers in developed nations through cheaper imported goods.

Their research showed that China's World Trade Organization (WTO) entry drove down the price index of manufactured goods in the United States by 7.6 percent, averaging around 1 percent annually between 2000 and 2006.

Moreover, they found the major reason for lower goods prices in the United States was mainly related to lower tariffs China imposed on imported inputs in the aftermath of its WTO entry, which led to higher productivity and lower export costs.

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