A Description of the Mudan Model

Mudan, a dynamic macroeconometric input-output model of China, is short for MUtisectoral Development Analysis of China. It shows for each of 59 sectors, gross output, household consumption, exports, imports, other final demand components, value added and prices. It also shows capital investment and employment for 52 sectors. The historical database is from 1992 to 2005 which is a unique database at this level of detail. It has been development over the course of the past 15 years with the cooperation of Wang Yinchu and Li Shantong. Recently a working relationship with the State Information Center of China has been formed. While the initial work on the model began in 1990, the really substantive work began with the efforts of Yu Qisheng who wrote his Phd thesis on Mudan (1999). Since that time the model has been updated, modified and enhanced. It now is based on the 2002 input-output table and is entirely consistent with the recently revised (2006-7) national accounts based upon an economic census taken in 2004.

In the past the model has been used to examine the economic effects of China’s entry into the WTO. The results of that study have been born out as China has rapidly restructured its automotive industry which was the only industry to have a negative impact on production upon entry. The flood of apparel imports from China in early 2005 was a direct result of the entry since at that time China was no longer burdened by the export limitations of the MultiFiber Agreement which controlled how much China could send abroad.

In addition the model has been used to ascertain the import content of Chinese exports; the effect on China of alternative paths of economic growth in Japan; and, most recently, the economic and industrial effects if China is able to eliminate its trade surplus in the next ten years. For more information Mudan or any Inforum model, send an email to [email protected].

MUDAN Papers