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How China's WTO accession affects rural economy in the less-developed regions

Author

Listed:
  • Diao, Xinshen
  • Fan, Shenggen
  • Zhang, Xiaobo

Abstract

This study constructs a regional CGE model of China to analyze the differential regional impacts of China's WTO accession on agricultural production, trade, and farmers' income. The results show that China's WTO accession will generally improve the total welfare but will widen existing gaps among regions and sectors. It is expected that the agricultural sector will suffer if only agricultural trade is liberalized, as cheap imports of agricultural products, particularly grains, will increase and domestic agricultural production and farmers' agricultural income will decline. Full trade liberalization, i.e., lifting trade barriers in both agriculture and non-agriculture will benefit farmers and agriculture at the national level. However, the increase in rural income is still smaller than the increase in urban income, which implies that the rural- urban income gap may be further widened. Furthermore, among the regions, the less-developed rural areas will benefit little or even suffer because their major production activities and income sources are still from agriculture, especially from traditional agricultural activities such as grain production.

Suggested Citation

  • Diao, Xinshen & Fan, Shenggen & Zhang, Xiaobo, 2002. "How China's WTO accession affects rural economy in the less-developed regions," TMD discussion papers 87, International Food Policy Research Institute (IFPRI).
  • Handle: RePEc:fpr:tmddps:87
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    References listed on IDEAS

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    1. Xiaobo Zhang & Shenggen Fan, 2001. "Estimating Crop-Specific Production Technologies in Chinese Agriculture: A Generalized Maximum Entropy Approach," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 83(2), pages 378-388.
    2. Kanbur, Ravi & Zhang, Xiaobo, 2001. "Fifty Years of Regional Inequality in China: A Journey through Revolution, Reform and Openness," CEPR Discussion Papers 2887, C.E.P.R. Discussion Papers.
    3. Colby, Hunter & Diao, Xinshen & Tuan, Francis, 2001. "China's WTO accession," TMD discussion papers 68, International Food Policy Research Institute (IFPRI).
    4. Terrie L. Walmsley & Thomas W. Hertel, 2001. "China's Accession to the WTO: Timing is Everything," The World Economy, Wiley Blackwell, vol. 24(8), pages 1019-1049, September.
    5. Colby, Hunter & Diao, Xinshen & Tuan, Francis C., 2001. "China's WTO Accession: Conflicts with Domestic Agricultural Policies and Institutions," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 2(1).
    6. Rozelle Scott, 1994. "Rural Industrialization and Increasing Inequality: Emerging Patterns in China's Reforming Economy," Journal of Comparative Economics, Elsevier, vol. 19(3), pages 362-391, December.
    7. John Gilbert & Thomas Wahl, 2002. "Applied General Equilibrium Assessments of Trade Libereralisation in China," The World Economy, Wiley Blackwell, vol. 25(5), pages 697-731, May.
    8. Löfgren, Hans & Harris, Rebecca Lee & Robinson, Sherman, 2001. "A standard computable general equilibrium (CGE) model in GAMS," TMD discussion papers 75, International Food Policy Research Institute (IFPRI).
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    Citations

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    Cited by:

    1. Renkow, Mitch, 2010. "Impacts of IFPRI's "priorities for pro-poor public investment" global research program:," Impact assessments 31, International Food Policy Research Institute (IFPRI).
    2. Davies, James B., 2004. "Microsimulation, CGE and Macro Modelling for Transition and Developing Economies," WIDER Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).
    3. James B Davies, 2009. "Combining microsimulation with CGE and macro modelling for distributional analysis in developing and transition countries," International Journal of Microsimulation, International Microsimulation Association, vol. 2(1), pages 49-56.
    4. Wang, Jiao & Mayes, David & Wan, Guanghua, 2005. "Income Distribution and Labour Movement in China after WTO Membership: A CGE Analysis," WIDER Working Paper Series 038, World Institute for Development Economic Research (UNU-WIDER).

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