(picture source: pixabay)

(Correspondent: Zhong Yiming) Recently, the paper titled “Beyond Tariffs: How Service Reforms Reshape Chinese Firms’ Import” co-authored by Professor Mao Qilin and Ph. D. candidate Xie Huifeng of our school has been published in Review of International Economics, a leading international economics journal.

This study investigates how services liberalization influences firm import behavior, leveraging China’s 2002 revision of the Catalogue for the Guidance of Foreign Investment Industries (CIFD) as a quasi-natural experiment. Using Chinese firm-level panel data, we demonstrate that services liberalization significantly increases imports by alleviating financing constraints, expanding production scale, and enhancing production efficiency. These effects are more pronounced among non-state-owned firms, upstream manufacturers, capital-intensive industries, and exporters. While services liberalization increases imports of intermediate and capital goods, it exerts no significant impact on consumer goods imports. Sectoral analysis reveals positive effects from liberalizing finance, distribution, and transportation. Furthermore, an analysis employing a region-industry-year perspective based on China’s post-WTO commitments under the General Agreement on Trade in Services (GATS) robustly corroborates these findings. Broader conceptual analysis shows that services liberalization also facilitates firms’ entry into import markets, expands their imported product baskets, upgrades import quality, accelerates industry-level import growth, and induces product switching. Finally, we establish that import growth spurred by liberalization enhances firm performance, highlighting its tangible economic benefits.

Review of International Economics is an authoritative journal in the field of international economics published bimonthly by Wiley-Blackwell. The journal focuses on international trade and international finance, covering topics such as economic development, trade and the environment, as well as political economy. It publishes innovative, occasionally controversial research and places particular emphasis on the integration of theoretical analysis with practical, real-world concerns.