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Impact of ChinaÂ’s WTO Accession on Farm-Nonfarm Income Inequality and Rural Poverty

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Author Info

  • Kym Anderson

    ()
    (School of Economics, University of Adelaide, Australia)

  • Jikun Huang

    ()
    (Chinese Academy of Sciences, Beijing, CHINA)

  • Elena Ianchovichina

    ()
    (The World Bank, Washington D.C., USA)

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

Paper provided by University of Adelaide, Centre for International Economic Studies in its series Centre for International Economic Studies Working Papers with number 2002-11.

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Length: 32 pages
Date of creation: Nov 2002
Date of revision:
Handle: RePEc:adl:cieswp:2002-11

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Keywords: WTO accession; ChinaÂ’s economic reform; rural-urban income inequality;

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References

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  1. Elena Ianchovichina & Terrie Walmsley, 2005. "Impact of China's WTO Accession on East Asia," Contemporary Economic Policy, Western Economic Association International, vol. 23(2), pages 261-277, 04.
  2. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers.
  3. 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.
  4. 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).
  5. 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.
  6. 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.
  7. 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.
  8. Anderson, Kym & Jackson, Lee Ann, 2004. "Standards, Trade And Protection: The Case Of Gmos," 2004 Annual meeting, August 1-4, Denver, CO 20282, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  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. de Brauw, Alan & Huang, Jikun & Rozelle, Scott & Zhang, Linxiu & Zhang, Yigang, 2002. "The Evolution of China's Rural Labor Markets During the Reforms," Journal of Comparative Economics, Elsevier, vol. 30(2), pages 329-353, June.
  11. 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.
  12. 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).
  13. 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.
  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. 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.
  2. 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.
  3. 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).
  4. 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).
  5. 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.
  6. 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.
  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. 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.
  9. 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.
  10. 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.
  11. Huang, Jikun & Rozelle, Scott & Martin, William J. & Liu, Yu, 2007. "Distortions to Agricultural Incentives in China," Agricultural Distortions Working Paper 48478, World Bank.
  12. 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.
  13. 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.
  14. 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.

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