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

Author

Listed:
  • 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.

Suggested Citation

  • Kym Anderson & Jikun Huang & Elena Ianchovichina, 2002. "Impact of ChinaÂ’s WTO Accession on Farm-Nonfarm Income Inequality and Rural Poverty," Centre for International Economic Studies Working Papers 2002-11, University of Adelaide, Centre for International Economic Studies.
    • Handle: RePEc:adl:cieswp:2002-11
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    JEL classification:

    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P31 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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