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Long-run impacts of China's WTO accession on farm-nonfarm income inequality and rural poverty

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  • Anderson, Kym
  • Huang, Jikun
  • Ianchovichina, Elena

Abstract

Many fear China's accession to the World Trade Organization (WTO) will impoverish its rural people by way of greater import competition in its agricultural markets. Anderson, Huang, and Ianchovichina explore that possibility bearing in mind that, even if producer prices of some (land-intensive) farm products fall, prices of other (labor-intensive) farm products could rise. Also, the removal of restrictions on exports of textiles and clothing could boost town and village enterprises, so demand for unskilled labor for nonfarm work in rural areas may grow even if demand for farm labor in aggregate falls. New estimates, from the global economywide numerical simulation model known as GTAP, of the likely changes in agricultural and other product prices as a result of WTO accession are drawn on to examine empirically the factor reward implications of China's WTO accession. The results suggest farm-nonfarm and Western-Eastern income inequality may well rise in China but rural-urban income inequality need not. The authors conclude with some policy suggestions for alleviating any pockets of farm household poverty that may emerge as a result of WTO accession.

Suggested Citation

  • Anderson, Kym & Huang, Jikun & Ianchovichina, Elena, 2003. "Long-run impacts of China's WTO accession on farm-nonfarm income inequality and rural poverty," Policy Research Working Paper Series 3052, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3052
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Harris, Richard G. & Robertson, Peter E., 2013. "Trade, wages and skill accumulation in the emerging giants," Journal of International Economics, Elsevier, pages 407-421.
    2. Jiang, Tingsong, 2003. "The Impact of China's WTO Accession on its Regional Economies," Australasian Agribusiness Review, University of Melbourne, Melbourne School of Land and Environment, vol. 11.
    3. Hertel, Thomas & Zhai, Fan, 2006. "Labor market distortions, rural-urban inequality and the opening of China's economy," Economic Modelling, Elsevier, vol. 23(1), pages 76-109, January.
    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. Christopher Edmonds & Sumner J. La Croix & Yao Li, 2006. "The China's Rise as an International Trading Power," Economics Study Area Working Papers 88, East-West Center, Economics Study Area.
    6. Yang, Jun & Huang, Jikun & Rozelle, Scott & Martin, Will, 2012. "Where is the balance? Implications of adopting Special Products and Sensitive Products in Doha negotiations for world and China's agriculture," China Economic Review, Elsevier, vol. 23(3), pages 651-664.
    7. Anderson, Kym, 2003. "Trade Liberalization, Agriculture, and Poverty in Low-income Countries," WIDER Working Paper Series 025, World Institute for Development Economic Research (UNU-WIDER).
    8. Duncan, Ronald C., 2004. "Achieving food security in China: Implications of WTO accession," 2004 Conference (48th), February 11-13, 2004, Melbourne, Australia 58402, Australian Agricultural and Resource Economics Society.
    9. Li, Yao, 2008. "Industrial Agglomeration and Wage Inequality in China," MPRA Paper 11426, University Library of Munich, Germany, revised Oct 2008.
    10. Shalizi, Zmarak, 2006. "Addressing China's growing water shortages and associated social and environmental consequences," Policy Research Working Paper Series 3895, The World Bank.
    11. McCalla, Alex F., 2003. "Liberalizing Agricultural Trade: Will It Ever Be a Reality?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 28(03), December.
    12. Anderson, Kym, 2003. "Impact assessment of IFPRI's research and related activities based on economywide modeling," Impact assessments 21, International Food Policy Research Institute (IFPRI).

    More about this item

    Keywords

    Economic Theory&Research; Agricultural Knowledge&Information Systems; Labor Policies; Environmental Economics&Policies; Markets and Market Access; Environmental Economics&Policies; Crops&Crop Management Systems; Economic Theory&Research; World Trade Organization; Livestock&Animal Husbandry;

    JEL classification:

    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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