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China'S Cotton Policy And The Impact Of China'S Wto Accession And Bt Cotton Adoption On The Chinese And U.S. Cotton Sectors

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  • Fang, Cheng
  • Babcock, Bruce A.

Abstract

In this paper we provide an analysis of China's cotton policy and develop a framework to quantify the impact of both China's World Trade Organization (WTO) accession and Bt (Bacillus thuringiensis) cotton adoption on Chinese and U.S. cotton sectors. We use a Chinese cotton sector model consisting of supply, demand, price linkages, and textiles output equations. A two-stage framework model provides gross cropping area and total area for cotton and major substitute crops from nine cotton-producing regions in China. Cotton demand, total fiber demand, and cotton share are estimated for each end user. The estimated parameters from the Chinese model are then used with the Food and Agricultural Policy Research Institute (FAPRI) modeling system to simulate various scenarios of China's WTO accession and Bt cotton adoption. The results suggest China's accession to the WTO would increase Chinese cotton imports on average by 455 to 676 thousand metric tons (tmt) during the 2002-2011 projection period. With the adoption of Bt cotton-the WTO accession factor notwithstanding-China would increase its cotton imports by 427 to 648 tmt. In these scenarios, U.S. cotton exports increased by 76 to 109 tmt and 71 to 104 tmt, respectively.

Suggested Citation

  • Fang, Cheng & Babcock, Bruce A., 2003. "China'S Cotton Policy And The Impact Of China'S Wto Accession And Bt Cotton Adoption On The Chinese And U.S. Cotton Sectors," Hebrew University of Jerusalem Archive 18556, Hebrew University of Jerusalem.
    • Handle: RePEc:ags:hebarc:18556
    DOI: 10.22004/ag.econ.18556
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    2. Suwen Pan & Jaime Malaga & Xiurong He, 2010. "Market liberalization and crop planting decision: a case of China," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 2(3), pages 240-250, September.
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    5. Stephen MacDonald & Suwen Pan & Darren Hudson & Francis Tuan, 2013. "Chinese domestic textile demand: where they buy does matter," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 5(3), pages 312-327, August.
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    9. Suwen Pan & Mark Welch & Samarendu Mohanty & Xiurong He, 2007. "Distortions of Sino‐US and Sino‐EU Safeguard Agreements: Effects on World Textile Markets," China & World Economy, Institute of World Economics and Politics, Chinese Academy of Social Sciences, vol. 15(4), pages 78-88, July.
    10. MacDonald, Stephen & Pan, Suwen & Somwaru, Agapi & Tuan, Francis, 2004. "China’s Role in World Cotton and Textile Markets," Conference papers 331298, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Pan, Suwen & Welch, Mark & Mohanty, Samarendu & Fadiga, Mohamadou L., 2006. "Sino-U.S. and Sino-E.U. Textile Safeguard Agreements: Comparing the Effects to Free Market Conditions," 2006 Annual meeting, July 23-26, Long Beach, CA 21117, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    12. Muhammad, Andrew & McPhail, Lihong & Kiawu, James, 2012. "Do U.S. Cotton Subsidies Affect Competing Exporters? An Analysis of Import Demand in China," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 44(2), pages 235-249, May.

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