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The purpose of this thesis is to assess the effects of China s growth, investment in higher education and trade liberalisation on China and its neighbouring East Asian economies. The study is conducted within the framework of a dynamic multi-sector, multi-region computational general equilibrium model, which incorporates endogenous capital and skill accumulation. China s trade liberalisation induces substantial investment spending and accumulation of capital and skilled labour in China and East Asia. There is a positive wage outcome for skilled and unskilled labour in both regions. The expanded trade opportunities with China should compensate East Asia for the loss of exports to the rest of the world. Complementarity exists between the exports of China and East Asia with East Asia supplying China s skill-intensive manufacturing sectors with components and parts which are then used as inputs into China s exports. Furthermore, the simulation results indicate that China s trade reforms will support the industrial upgrading process in China but the impact is more apparent in the long term. As China transforms into a more skill oriented, open and competitive economy, it will impose significant structural adjustments on itself and East Asia. A large increase in the output and exports of low tech manufacturing is seen in China, as well as in the high skill sectors of intermediate manufacturing, durables and traded services. China s exports and imports surge, further rising its presence in the global trading system. The exports of East Asia to the rest of the world decline across the sectors except for the durables sector. However, the decline in the exports of several sectors in East Asia to the rest of the world was offset by the increase in the exports of these sectors to China.