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By Andrew Sharpe and Myeongwan Kim
Over the past 20 years Chinese-made goods have occupied more and more space in the shopping baskets of Canadians. This has had costs and benefits. There is no shortage of research on the costs, which include job losses in manufacturing. In a recent report for Global Affairs Canada, the Centre for the Study of Living Standards has taken a detailed look at the benefits, which include lower prices for some products and lower inflation overall.
China became an exporting powerhouse after it joined the World Trade Organization (WTO) in 2001. Much of this export surge, commonly called the “China Shock,” stemmed from internal factors in China, such as urbanization, the rising competitiveness of Chinese manufacturing and the Chinese government’s decision to, at least nominally, sign on to the rules of global trade. China wanted to sell its goods to the world and consumers around the world were happy to buy them. The expansion of superstores like Walmart, which focused on high-volume, low-margin sales, boosted the spread of Chinese products.