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Will China's WTO accession worsen farm household incomes?

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  • Anderson, Kym
  • Huang, Jikun
  • Ianchovichina, Elena

Abstract

Many fear ChinaÂ’s accession to WTO will impoverish its rural people, via greater import competition in its agricultural markets. We explore that possibility bearing in mind that, even if producer prices of some (land-intensive) farm products fall, prices of other (labour-intensive) farm products could rise. Also, the removal of restrictions on exports of textiles and clothing could boost town and village enterprises, so demand for unskilled labour for non-farm work in rural areas may grow even if demand for farm labour in aggregate falls. New estimates, from the global, economywide numerical simulation model known as GTAP, of the likely changes in agricultural and other product prices as a result of WTO accession are drawn on to examine empirically the factor reward implications of ChinaÂ’s WTO accession. The results suggest farm-nonfarm and Western-Eastern income inequality may well rise within China but rural-urban income inequality need not. The paper concludes with some policy suggestions for alleviating any pockets of farm household poverty that may emerge as a result of WTO accession.

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Bibliographic Info

Article provided by Elsevier in its journal China Economic Review.

Volume (Year): 15 (2004)
Issue (Month): 4 ()
Pages: 443-456

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Handle: RePEc:eee:chieco:v:15:y:2004:i:4:p:443-456

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Web page: http://www.elsevier.com/locate/chieco

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References

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  1. Ianchovichina, Elena & Martin, William, 2003. "Economic impacts of China's accession to the World Trade Organization," Policy Research Working Paper Series 3053, The World Bank.
  2. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years Of Regional Inequality In China: A Journey Through Revolution, Reform And Openness," Working Papers 7236, Cornell University, Department of Applied Economics and Management.
  3. Kym Anderson & Lee Ann Jacskon, 2004. "Standards, trade and protection: the case of GMOs," Centre for International Economic Studies Working Papers 2004-11, University of Adelaide, Centre for International Economic Studies.
  4. Anderson, Kym, 1993. "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries," CEPR Discussion Papers 789, C.E.P.R. Discussion Papers.
  5. Jikun Huang & Ninghui Li & Scott Rozelle, 2003. "Trade Reform, Household Effects, and Poverty in Rural China," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1292-1298.
  6. Ianchovichina, Elena & Walmsley, Terrie, 2003. "The impact of China's WTO accession on East Asia," Policy Research Working Paper Series 3109, The World Bank.
  7. Fan, Shenggen & Zhang, Linxiu & Zhang, Xiaobo, 2002. "Growth, inequality, and poverty in rural China: the role of public investments," Research reports 125, International Food Policy Research Institute (IFPRI).
  8. Fan, Shenggen & Fang, Cheng & Zhang, Xiaobo, 2001. "How agricultural research affects urban poverty in developing countries: the case of China," EPTD discussion papers 83, International Food Policy Research Institute (IFPRI).
  9. John Gilbert & Thomas Wahl, 2002. "Applied General Equilibrium Assessments of Trade Libereralisation in China," The World Economy, Wiley Blackwell, vol. 25(5), pages 697-731, 05.
  10. Wang, Zhi, 2003. "WTO accession, the "Greater China" free-trade area, and economic integration across the Taiwan Strait," China Economic Review, Elsevier, vol. 14(3), pages 316-349.
  11. Terry Sicular & Yaohui Zhao, 2002. "Earnings and Labor Mobility in Rural China: Implications for China's WTO Entry," University of Western Ontario, Economic Policy Research Institute Working Papers 20028, University of Western Ontario, Economic Policy Research Institute.
  12. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution Of China'S Rural Labor Markets During The Reforms," Working Papers 11984, University of California, Davis, Department of Agricultural and Resource Economics.
  13. Schultz, Theodore W, 1975. "The Value of the Ability to Deal with Disequilibria," Journal of Economic Literature, American Economic Association, vol. 13(3), pages 827-46, September.
  14. Sicular, Terry, 1988. "Plan and Market in China's Agricultural Commerce," Journal of Political Economy, University of Chicago Press, vol. 96(2), pages 283-307, April.
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Citations

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Cited by:
  1. Liu, Bo & Keyzer, Michiel & van den Boom, Bart & Zikhali, Precious, 2012. "How connected are Chinese farmers to retail markets? New evidence of price transmission," China Economic Review, Elsevier, vol. 23(1), pages 34-46.
  2. Yang, Jun & Huang, Jikun & Li, Ninghui & Rozelle, Scott & Martin, Will, 2011. "The impact of the Doha trade proposals on farmers' incomes in China," Journal of Policy Modeling, Elsevier, vol. 33(3), pages 439-452, May.
  3. Anderson, Kym, 2003. "Trade Liberalization, Agriculture, and Poverty in Low-income Countries," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
  4. Wei, Guoxue & Huang, Jikun & Yang, Jun, 2012. "The impacts of food safety standards on China's tea exports," China Economic Review, Elsevier, vol. 23(2), pages 253-264.
  5. Huang, Jikun & Rozelle, Scott & Martin, William J. & Liu, Yu, 2007. "Distortions to Agricultural Incentives in China," Agricultural Distortions Working Paper 48478, World Bank.
  6. Yinhua Mai & Xiujian Peng & Peter B. Dixon & Maureen T. Rimmer, 2009. "The effects of facilitating the flow of rural workers to urban employment in China," Centre of Policy Studies/IMPACT Centre Working Papers g-188, Victoria University, Centre of Policy Studies/IMPACT Centre.
  7. Huang, Jikun & Rozelle, Scott & Xu, Zhigang & Li, Ninghui, 2005. "Impacts Of Trade Liberalization On Agriculture And Poverty In China," Agricultural Policy Papers 23681, Massey University, Centre for Applied Economics and Policy Studies.
  8. Kleinwechter, Ulrich & Grethe, Harald, 2012. "Trade policy impacts under alternative land market regimes in rural China," China Economic Review, Elsevier, vol. 23(4), pages 1071-1089.
  9. Huang, Jikun & Jun, Yang & Xu, Zhigang & Rozelle, Scott & Li, Ninghui, 2007. "Agricultural trade liberalization and poverty in China," China Economic Review, Elsevier, vol. 18(3), pages 244-265.
  10. Du, Yuxin & Teixeira, Aurora A.C., 2012. "A bibliometric account of Chinese economics research through the lens of the China Economic Review," China Economic Review, Elsevier, vol. 23(4), pages 743-762.
  11. Yuxin Du, 2011. "A Bibliometrics Portrait of Chinese Research through the Lens of China Economic Review. A research proposal," Economics and Management Research Projects: An International Journal, Open Access International Journals, vol. 1(1), pages 79-91, December.
  12. Anderson, Kym, 2003. "Impact assessment of IFPRI's research and related activities based on economywide modeling," Impact assessments 21, International Food Policy Research Institute (IFPRI).
  13. Hanjra, Munir A. & Qureshi, M. Ejaz, 2010. "Global water crisis and future food security in an era of climate change," Food Policy, Elsevier, vol. 35(5), pages 365-377, October.
  14. Yang, Jun & Huang, Jikun & Rozelle, Scott & Martin, Will, 2012. "Where is the balance? Implications of adopting Special Products and Sensitive Products in Doha negotiations for world and China's agriculture," China Economic Review, Elsevier, vol. 23(3), pages 651-664.

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