Agriculture Reference
In-Depth Information
Summary and policy implications
From a political economy point of view, WTO accession is undoubtedly one
of the most complcated and challengng events n contemporary Chnese
history. Of China's WTO commitments, the agricultural component is
potentally the most contentous because of the number of people employed
in agriculture, and its implications for food security as well as for social
stablty. The study has examned varous aspects of the mpact of WTO
accesson for Chna's agrcultural sector. Several ponts emerge from the
nvestgaton.
The desrable mpacts from WTO accesson should be the nsttutonal
effects. WTO accession may help complete the unfinished agenda of
nsttutonal transformaton n the agrcultural and rural sectors through
the dynamcs from the nteractons between the market-orented reform
and further openng up to the outsde world. Implementaton of WTO
commtments s lkely to reduce unnecessary government nterventon n
the distribution of agricultural products, and break up the state monopoly in
foregn trade n bulk agrcultural products. Improvements n the nsttutonal
framework wll make mportant contrbutons to the long-term growth of
Chinese agricultural and rural income. Without its institutional effects, the
desrable mpacts of Chna's WTO accesson on ts agrcultural sector as
well as on the whole economy would be substantally dmnshed.
Second, consistent with the structure of factor endowments in the
agricultural sector, China has comparative advantage in labour-intensive
agricultural products such as vegetables and fruits, fishery products and
meat, but lacks comparative advantage in land-intensive bulk agricultural
products such as gran and ol-bearng products. WTO accesson s lkely
to help Chna expand exports of the products n whch t has comparatve
advantage. On the other hand, it may also give rise to substantial adjustment
costs for those products for whch domestc producton costs are relatvely
hgh and where mports may ncrease. Although the long-term mpacts are
generally expected to be positive, the short-term adjustment costs may be
substantal. The ncome mplcatons of the mport-led substtuton effects
deserve specal attenton.
Third, it is interesting to gauge the regional pattern of the export-
promoting benefits and the import-led adjustment costs that WTO accession
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