Resource information
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.
