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

  • 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)

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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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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  1. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, April.
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  4. 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.
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  7. Fan, Shenggen & Fang, Cheng & Zhang, Xiaobo, 2001. "How Agricultural Research Affects Urban Poverty In Developing Countries? The Case Of China," 2001 Annual meeting, August 5-8, Chicago, IL 20636, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
  8. 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.
  9. 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).
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  12. 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.
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  15. 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.
  16. IANCHOVICHINA Elena & WALMSLEY Terrie, . "Impact of China’s WTO Accession on East Asia," EcoMod2003 330700070, EcoMod.
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