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Chinese Agricultural Reform, the WTO and FTA Negotiations


  • Shunli Yao

    (China Center for Economic Research)


China's early industrialization created distortions. This paper identifies major distortions in the Chinese economy in the pre-reform era and brings agricultural distortions into perspective. Comparison is made of the reform experience in Chinese industry and agriculture. It suggests that with limited arable land, it is difficult to align Chinese agricultural production fully with its comparative advantage without also reforming China's grain policy. Reform has substantially freed up agricultural production but border distortions serve as one of a few remaining effective measures to ensure the grain self-sufficiency target. Unlike agricultural protection in rich countries, China's grain self-sufficiency policy ahs much weaker institutional underpinnings and is susceptible to the influence of interest groups. The patterns of Chinese agricultural trade explain its ambiguous positions in WTO agriculture negotiations. In terms of grain sectoral adjustment, a possible comprehensive China-Australia FTA is consistent with the multilateral process, while the China-ASEAN FTA is not. There is no evidence that the China-ASEAN FTA helps with the WTO agriculture negotiations, particularly when rice is excluded from the deal; but China-Australia FTA could generate competitive liberalization in grain trade, and thus help with the global agricultural liberalization.

Suggested Citation

  • Shunli Yao, 2006. "Chinese Agricultural Reform, the WTO and FTA Negotiations," Trade Working Papers 22018, East Asian Bureau of Economic Research.
  • Handle: RePEc:eab:tradew:22018

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    References listed on IDEAS

    1. Athukorala, Prema-chandra & Kohpaiboon, Archanun, 2009. "Intra-Regional Trade in East Asia: The Decoupling Fallacy, Crisis, and Policy Challenges," ADBI Working Papers 177, Asian Development Bank Institute.
    2. C. Fred Bergsten, 2007. "Toward a Free Trade Area of the Asia Pacific," Policy Briefs PB07-2, Peterson Institute for International Economics.
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    More about this item


    Agricultural Trade; WTO; Free Trade Agreement;

    JEL classification:

    • Q17 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agriculture in International Trade
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade


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