DP4196 Will China's WTO Accession Worsen Rural Poverty?

Author(s): Kym Anderson, Jikun Huang, Elena Ianchovichina
Publication Date: January 2004
Keyword(s): china's economic reform, income inequality, rural poverty, wto accession
JEL(s): O19, O53, P31
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=4196

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.