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

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Author Info
Anderson, Kym
Huang, Jikun
Ianchovichina, Elena

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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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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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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hazell, P. B. R. & Haddad, Lawrence James, 2001. "Agricultural research and poverty reduction:," 2020 vision discussion papers 34, International Food Policy Research Institute (IFPRI). [Downloadable!]
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  2. Kala Krishna & Cemile Yavas, 2002. "When Does Trade Hurt? Market, Transition and Developing Economies," NBER Working Papers 8995, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. 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. [Downloadable!] (restricted)
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  4. Anderson, Kym, 1995. "Lobbying Incentives and the Pattern of Protection in Rich and Poor Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 43(2), pages 401-23, January.
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  5. Harrison, W Jill & Pearson, K R, 1996. "Computing Solutions for Large General Equilibrium Models Using GEMPACK," Computational Economics, Springer, vol. 9(2), pages 83-127, May.
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  6. 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. [Downloadable!] (restricted)
  7. 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). [Downloadable!]
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  8. Anderson, Kym & Yao, Shunli, 2002. "China, GMOs and World Trade in Agricultural and Textile Products," CEPR Discussion Papers 3171, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  9. Will Martin, 2001. "Implications of reform and WTO accession for China' agricultural policies," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 9(3), pages 717-742, November. [Downloadable!] (restricted)
  10. 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. [Downloadable!] (restricted)
  11. Terry Sicular & Yaohui Zhao, 2002. "Earnings and Labor Mobility in Rural China: Implications for China's WTO Entry," University of Western Ontario, RBC Financial Group Economic Policy Research Institute Working Papers 20028, University of Western Ontario, RBC Financial Group Economic Policy Research Institute. [Downloadable!]
  12. Winters, L. Alan, 2000. "Trade, Trade Policy and Poverty: What Are The Links?," CEPR Discussion Papers 2382, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hertel, Thomas & Zhai, Fan, 2004. "Labor market distortions, rural-urban inequality, and the opening of China's economy," Policy Research Working Paper Series 3455, The World Bank. [Downloadable!]
    Other versions:
  2. Shalizi, Zmarak, 2006. "Addressing China's growing water shortages and associated social and environmental consequences," Policy Research Working Paper Series 3895, The World Bank. [Downloadable!]
  3. Christopher Edmonds & Sumner J. La Croix & Yao Li, 2006. "The China's Rise as an International Trading Power," Economics Study Area Working Papers 88, East-West Center, Economics Study Area. [Downloadable!]
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