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Long-run impacts of China's WTO accession on farm-nonfarm income inequality and rural poverty

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

Abstract

Many fear China's accession to the World Trade Organization (WTO) will impoverish its rural people by way of greater import competition in its agricultural markets. Anderson, Huang, and Ianchovichina explore that possibility bearing in mind that, even if producer prices of some (land-intensive) farm products fall, prices of other (labor-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 labor for nonfarm work in rural areas may grow even if demand for farm labor 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 China's WTO accession. The results suggest farm-nonfarm and Western-Eastern income inequality may well rise in China but rural-urban income inequality need not. The authors conclude 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 The World Bank in its series Policy Research Working Paper Series with number 3052.

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Date of creation: 31 May 2003
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Handle: RePEc:wbk:wbrwps:3052

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Keywords: Economic Theory&Research; Agricultural Knowledge&Information Systems; Labor Policies; Environmental Economics&Policies; Markets and Market Access; Environmental Economics&Policies; Crops&Crop Management Systems; Economic Theory&Research; World Trade Organization; Livestock&Animal Husbandry;

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References

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  1. Kala Krishna & Cemile Yavas, 2002. "When Does Trade Hurt? Market, Transition and Developing Economies," NBER Working Papers 8995, National Bureau of Economic Research, Inc.
  2. Kym Anderson & Shunli Yao, 2003. "China, Gmos And World Trade In Agricultural And Textile Products," Pacific Economic Review, Wiley Blackwell, Wiley Blackwell, vol. 8(2), pages 157-169, 06.
  3. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years Of Regional Inequality In China: A Journey Through Revolution, Reform And Openness," Working Papers, Cornell University, Department of Applied Economics and Management 7236, Cornell University, Department of Applied Economics and Management.
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  6. Hazell, Peter B. R. & Haddad, Lawrence James, 2001. "Agricultural research and poverty reduction," 2020 vision briefs, International Food Policy Research Institute (IFPRI) 70, International Food Policy Research Institute (IFPRI).
  7. Anderson,Kym (ed.), 1992. "The New Silk Roads," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521392785.
  8. Sicular, Terry, 1988. "Plan and Market in China's Agricultural Commerce," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 96(2), pages 283-307, April.
  9. Ianchovichina, Elena & Martin, William, 2003. "Economic impacts of China's accession to the World Trade Organization," Policy Research Working Paper Series, The World Bank 3053, The World Bank.
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  12. Will Martin, 2001. "Implications of reform and WTO accession for China' agricultural policies," The Economics of Transition, The European Bank for Reconstruction and Development, The European Bank for Reconstruction and Development, vol. 9(3), pages 717-742, November.
  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, University of Western Ontario, Economic Policy Research Institute 20028, University of Western Ontario, Economic Policy Research Institute.
  14. Shaohua Chen & Martin Ravallion, 2004. "Welfare Impacts of China's Accession to the World Trade Organization," World Bank Economic Review, World Bank Group, World Bank Group, vol. 18(1), pages 29-57.
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Citations

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Cited by:
  1. Zhai, Fan & Hertel, Thomas & Wang, Zhi, 2003. "Labor Market Distortions, Rural-Urban Inequality and the Opening of China’s Economy," GTAP Working Papers 1323, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
  2. Li, Yao, 2008. "Industrial Agglomeration and Wage Inequality in China," MPRA Paper 11426, University Library of Munich, Germany, revised Oct 2008.
  3. Shalizi, Zmarak, 2006. "Addressing China's growing water shortages and associated social and environmental consequences," Policy Research Working Paper Series, The World Bank 3895, The World Bank.
  4. McCalla, Alex F., 2003. "Liberalizing Agricultural Trade: Will It Ever Be a Reality?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, Western Agricultural Economics Association, vol. 28(03), December.
  5. Duncan, Ronald C., 2004. "Achieving food security in China: Implications of WTO accession," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia, Australian Agricultural and Resource Economics Society 58402, Australian Agricultural and Resource Economics Society.

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