| Abstract: | The implications for the world grains market of a reduction in China's domestic absorption, and of the removal of its key manufacturing protection, are analysed in this paper. These policy changes are modelled both alone and together with grain self-sufficiency in China and with reduction in farm support in the US and EC. In themselves, the reduction in absorption and removal of manufacturing protection in China would have only marginal effects on the world grains market. If, however, China were to achieve grain self-sufficiency while adopting these macroeconomic and trade policies, world grain prices and trade would fall considerably. In contrast, even a partial removal of protection in the US and EC, simultaneously with the above Chinese macroeconomic and trade policy changes, could substantially increase world grain prices and trade. These positive effects would be considerably reduced if at the same time China were to become self-sufficient in grain. |
