Working Paper: CEPR ID: DP4196
Authors: Kym Anderson; Jikun Huang; Elena Ianchovichina
Abstract: Many fear China?s accession to 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 (labour-intensive) farm and non-farm products could rise. New estimates, from the global, economy-wide 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 real income implications of China?s WTO accession. The results suggest farm/non-farm income inequality may well rise within China but rural-urban income inequality need not. The Paper concludes with some policy suggestions for alleviating any pockets of farm household poverty that may emerge as a result of WTO accession.
Keywords: China's Economic Reform; Income Inequality; Rural Poverty; WTO Accession
JEL Codes: O19; O53; P31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| WTO accession (F13) | increased farm-nonfarm income inequality (E25) |
| WTO accession (F13) | decline in farm incomes (Q12) |
| WTO accession (F13) | increase in non-farm incomes (Q12) |
| decline in farm incomes (Q12) | increased farm-nonfarm income inequality (E25) |
| increase in non-farm incomes (Q12) | increased farm-nonfarm income inequality (E25) |
| WTO accession (F13) | decline in real wages for unskilled farm labor (F66) |
| WTO accession (F13) | increase in real wages for unskilled non-farm labor (F66) |