Will China's WTO accession worsen rural poverty?
2004
K, Anderson | J. Huang | E. Ianchovichina
Many fear China’s accession to the World Trade Organization (WTO) will impoverish its farmers, via greater import competition in its agricultural markets. Using a numerical simulation model (GTAP), this paper explores the likely changes in agricultural and other product prices as a result of WTO accession. The results suggest farm/non-farm income inequality may well rise within China but rural-urban income inequality need not.Conclusions and policy implications:rural non-farm incomes will rise on average absolutely and possibly even relative to urban incomes in the case of households depending just on labor incometypically, the incidence of rural non-farm poverty could fall mainly due to a growth in wages for unskilled workers in rural non-farm activities, while poverty may increase in agriculturally based hinterland provinces far from markets and in regions with poor infrastructurenational self-sufficiency in farm products would decrease slightly, particularly for feedgrains and cotton, as demand for livestock products grows with income gains from trade reform and as production of natural fibre-based textiles and clothing expandefficient policy responses are likely to involve investments in rural human capital, rural infrastructure and agricultural research and development, improvements in the land tenure system and rural financial markets, reductions in informal taxes/levies on farmers by local governments, and changes in grain marketing.
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