Long-Run Impacts of China's WTO Accession on Farm-Nonfarm Income Inequality and Rural Poverty

33 Pages Posted: 20 Apr 2016

See all articles by Elena Ianchovichina

Elena Ianchovichina

World Bank

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES); Centre for Economic Policy Research (CEPR); Australian National University

Jikun Huang

Chinese Academy of Sciences (CAS)

Date Written: May 2003

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.

This paper - a product of the Economic Policy Division, Poverty Reduction and Economic Management Network - is part of a larger effort in the network to assess the impact of China's WTO accession.

Keywords: WTO accession, China's economic reform, rural-urban income inequality

JEL Classification: F14, O19, O53

Suggested Citation

Ianchovichina, Elena and Anderson, Kym and Huang, Jikun, Long-Run Impacts of China's WTO Accession on Farm-Nonfarm Income Inequality and Rural Poverty (May 2003). World Bank Policy Research Working Paper No. 3052. Available at SSRN: https://ssrn.com/abstract=636414

Elena Ianchovichina (Contact Author)

World Bank ( email )

1818 H. Street, N.W.
MSN3-311
Washington, DC 20433
United States
202-458-8910 (Phone)
202-522-1159 (Fax)

Kym Anderson

University of Adelaide - Centre for International Economic Studies (CIES) ( email )

School of Economics
Adelaide SA 5005
Australia
+61 8 8313 4712 (Phone)
+61 8 8223 1460 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Australian National University ( email )

Arndt-Corden Dept of Economics
Coombs Building
Canberra, AK ACT 2600
Australia
+61 8 8313 4712 (Phone)

HOME PAGE: http://publicpolicy.anu.edu.au/crawford_people/content/staff/acde/kanderson.php

Jikun Huang

Chinese Academy of Sciences (CAS) ( email )

Center for Chinese Agricultural Policy (CCAP)
No. Jia 11, Datun Road
Anwai, Beijing, 100101
China
+86 10 64889440 (Phone)
+86 10 64856533 (Fax)

HOME PAGE: http://www.ccap.org.cn/english/ccapstaff.asp?PID=1380

Register to save articles to
your library

Register

Paper statistics

Downloads
200
Abstract Views
2,398
rank
151,645
PlumX Metrics