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Changes in trade and domestic distortions affecting China's agriculture

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Author Info

  • Huang, Jikun
  • Liu, Yu
  • Martin, Will
  • Rozelle, Scott

Abstract

This paper assesses the implications of China's trade and domestic policies for incentives to producers in China. It uses a price comparison methodology (nominal rates of assistance--at the border and the farmgate), with adjustments for exchange rate distortions in the first part of the sample period (1981-1994). On average, distortions to agricultural incentives have been reduced. In the early 1980s, on average, China's domestic prices were far below international prices. There were substantial variations, however, between imported (which were being protected) and exported goods. During the 1980s and 1990s the gap between domestic and international prices for both imports and exports narrowed initially mainly due to the elimination of domestic policy distortions. Between the mid-1990s and 2004, trade liberalization policy furthered narrowed the gap between world and China farmgate prices. By the mid-2000s, China's agriculture was operating with only small price distortions.

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Bibliographic Info

Article provided by Elsevier in its journal Food Policy.

Volume (Year): 34 (2009)
Issue (Month): 5 (October)
Pages: 407-416

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Handle: RePEc:eee:jfpoli:v:34:y:2009:i:5:p:407-416

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

Related research

Keywords: China Agriculture Trade distortions Incentives Prices;

References

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  1. Lin, Justin Yifu, 1992. "Rural Reforms and Agricultural Growth in China," American Economic Review, American Economic Association, vol. 82(1), pages 34-51, March.
  2. Dornbusch, Rudiger, 1976. "Expectations and Exchange Rate Dynamics," Journal of Political Economy, University of Chicago Press, vol. 84(6), pages 1161-76, December.
  3. Anderson, Kym & Kurzweil, Marianne & Martin, Will & Sandri, Damiano & Valenzuela, Ernesto, 2008. "Measuring distortions to agricultural incentives, revisited," Policy Research Working Paper Series 4612, The World Bank.
  4. 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.
  5. Lardy,Nicholas R., 1992. "Foreign Trade and Economic Reform in China," Cambridge Books, Cambridge University Press, number 9780521414951, October.
  6. Kiguel, Miguel & O'Connell, Stephen A, 1995. "Parallel Exchange Rates in Developing Countries," World Bank Research Observer, World Bank Group, vol. 10(1), pages 21-52, February.
  7. Orden, David & Cheng, Fuzhi & Nguyen, Hoa & Grote, Ulrike & Thomas, Marcelle & Mullen, Kathleen & Sun, Dongsheng, 2007. "Agricultural producer support estimates for developing countries: Measurement issues and evidence from India, Indonesia, China, and Vietnam," Research reports 152, International Food Policy Research Institute (IFPRI).
  8. W. E. G. Salter, 1959. "Internal And External Balance: The Role Op Price And Expenditure Effects," The Economic Record, The Economic Society of Australia, vol. 35(71), pages 226-238, 08.
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Citations

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Cited by:
  1. Fan, Linlin & Nogueira, Lia & Baylis, Katherine R., 2013. "Agricultural Market Reforms and Nutritional Transition in Rural China," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150203, Agricultural and Applied Economics Association.
  2. Huang, Jikun & Wu, Yunhua & Yang, Zhijian & Rozelle, Scott & Fabiosa, Jacinto & Dong, Fengxia, 2012. "Marketing China's milk: A case study of the sales activity of dairy farmers in greater Beijing," China Economic Review, Elsevier, vol. 23(3), pages 675-689.
  3. Dingyang Zhou & Hirotaka Matsuda & Yuji Hara & Kazuhiko Takeuchi, 2012. "Potential and observed food flows in a Chinese city: a case study of Tianjin," Agriculture and Human Values, Springer, vol. 29(4), pages 481-492, December.

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