Distortions at the Border; Integration Inland: Assessing the Effect of WTO Accession on China's Agriculture |
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Authors: | Jikun Huang Scott Rozelle Yuping Xie |
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Institution: | 1. Center for Chinese Agricultural Policy, Institute for Geographical Sciences and Natural Resource Research, Chinese Academy of Sciences, People's Republic of China;2. Department of Agricultural and Resource Economics, University of California, One Shields Avenue, Davis, California 95616, USA |
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Abstract: | The main goal of the paper is to address the impact of the WTO on China's agricultural sector. To accomplish this goal we address two sets of issues. First, we seek to provide measures of the distortions in China's agricultural sector at a time prior to the nation's accession to WTO. This is accomplished by estimating the nominal rates of protection (NPRs) of the agricultural sector's major commodities using a new methodology to account for grain quality differences within China and between China and the world market. Second, we seek to assess how well integrated China's markets are in order to understand which areas of the country and which segments of the farming population will likely be isolated from, or affected by, the changes that WTO will bring. We find that NPRs differ among commodities. Some of China's agricultural commodities are well above and others are well below world market prices. We also find that if increased imports or exports affect China's domestic price at the border, its own domestic markets are mostly integrated so that price shifts in one area will affect prices in most of the rest of China. Our analysis finds, however, that a number of policy and structural factors limit the overall size of the shock. |
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Keywords: | Wto Accession Nominal Rates Of Protection Integration Impacts China |
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