Will China's WTO Accession Worsen Farm Household Incomes?
Posted: 6 Apr 2005
Many fear China's accession to the World Trade Organization (WTO) will impoverish its farmers via greater import competition in its agricultural markets. We explore that possibility bearing in mind that, even if producer prices of some (land-intensive) farm products fall, prices of other (labor-intensive) farm and nonfarm products could rise. New estimates, from the global, economy-wide numerical simulation model known as Global Trade Analysis Project (GTAP), of the likely changes in agricultural and other product prices as a result of WTO accession, are drawn on to examine empirically the real income implications of China's WTO accession. The results suggest farm-nonfarm income inequality may well rise within China but rural-urban income inequality need not. The article concludes with some policy suggestions for alleviating any pockets of farm household poverty that may emerge as a result of WTO accession.
Keywords: WTO accession, China's economic reform, Income inequality, Farm poverty
JEL Classification: O19, O53, P31
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