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Protection and Comparative Advantage of Chinese Agriculture: Implications for Regional and National Specialization

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  • Fang, Cheng
  • Beghin, John C.

Abstract

We assess the protection and comparative advantage of China's major agricultural crops for six regions using a modified Policy Analysis Matrix (PAM) and 1997-2000 data. Agricultural protection in China is reminiscent of the import-substitution era with systematic patterns of input subsidization and output taxation through foreign exchange rationing. Effective protection is positive and significant for sugarcane, and to a lesser extent, early indica rice. Effective taxation burdens tobacco, cotton, and japonica rice. At the national level, China has a comparative advantage in labor-intensive crops (fruits and vegetables, cotton, and tobacco) and a disadvantage in many land-intensive crops (wheat and oilseeds). Within the grain sector, japonica and late indica rice are nationally competitive. Regional patterns reveal that corn production is competitive in two of the six regions and could become competitive in two other regions with moderate productivity gains. Wheat and oilseeds production exhibits a large regional variation in their lack of competitiveness, suggesting that prospects to improve productivity vary greatly by region.

Suggested Citation

  • Fang, Cheng & Beghin, John C., 2003. "Protection and Comparative Advantage of Chinese Agriculture: Implications for Regional and National Specialization," Staff General Research Papers Archive 10102, Iowa State University, Department of Economics.
    • Handle: RePEc:isu:genres:10102
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    Cited by:

    1. Fang, Cheng & Beghin, John C., 2002. "Urban Demand for Edible Oils and Fats in China: Evidence from Household Survey Data," Journal of Comparative Economics, Elsevier, vol. 30(4), pages 732-753, December.
    2. Fuller, Frank H. & Beghin, John C. & Fabiosa, Jacinto F. & Fang, Cheng & de Cara, Stephane & Matthey, Holger, 2001. "China'S Accession To The World Trade Organization: Impact On Agricultural Markets," 2001 Annual meeting, August 5-8, Chicago, IL 20619, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    3. Frank Fuller & John Beghin & Stéphane De Cara & Jacinto Fabiosa & Cheng Fang & Holger Matthey, 2003. "China's Accession to the World Trade Organization: What Is at Stake for Agricultural Markets?," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 25(2), pages 399-414.
    4. Chang, Min & Sumner, Daniel A., 2004. "Trade Impact On Food Security: Analysis On Farm Households In Rural China," 2004 Annual meeting, August 1-4, Denver, CO 20322, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Frank H. Fuller & John C. Beghin & Stephane De Cara & Jacinto F. Fabiosa & Cheng Fang & Holger Matthey, 2001. "China's Accession to the WTO: What Is at Stake for Agricultural Markets?," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 01-wp276, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    6. Hongyun Han & Hui Lin, 2021. "Patterns of Agricultural Diversification in China and Its Policy Implications for Agricultural Modernization," IJERPH, MDPI, vol. 18(9), pages 1-22, May.
    7. Baffes, John, 2004. "Cotton : Market setting, trade policies, and issues," Policy Research Working Paper Series 3218, The World Bank.

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