Rural Poverty and China's Entry to WTO: Present Knowledge, Unresolved Issues and China's Policy Options

Begins by considering trends in the incidence of rural poverty in China, comparing China and India. Although the incidence of rural poverty in China declined generally, such poverty is still a matter for concern, especially now that China has joined the WTO. There is concern about the possible impact of China’s WTO entry on its rural poverty and its ability to adopt policies to address it. Recent international studies of such poverty in China by bodies such as the World Bank, OECD, ADB and IFPRI are outlined and reviewed critically with these economic issues in mind. The most recent study by Anderson and others suggests that China’s agriculture will be forced to undertake more structural adjustment than forecast in earlier studies. The Chinese policies to deal with rural poverty will need to give increasing attention to structural adjustment support and migration from rural areas in the future. The WTO does not count such measures as a form of economic protection. In fact, a large number of measures to provide financial support to farmers, including support to poor farmers, are WTO exempt. As discussed these include ‘green box’ measure, certain development measures in developing countries, and ‘blue box’ measures. In addition, under the de minimis principle, China can provide economic protection on average of 8.5 per cent of the value of an agricultural product.