Tracking Distortions in Agriculture: China and Its Accession to the World Trade Organization

This article examines the impacts of China's accession to theWorld Trade Organization (WTO) on prices in its agriculturalsector. The analysis uses a new methodology to estimate nominalprotection rates in China's agricultural sector before its accessionto the WTO. These new measures account for differences in commodityquality within China and between China and world markets. Theanalysis shows that some of China's agricultural commoditiesare well above world market prices and others are well below.The article also assesses market integration and efficiencyin China. It finds high degrees of integration between coastaland inland markets and between regional and village markets.The remarkable improvements in market performance in recentyears mean that if increased imports or exports affect China'sdomestic price near the border, producers throughout most ofChina will feel the price shifts.