Agriculture Reference
In-Depth Information
Commodity, regional and household impacts of WTO accession
The project examned the lkely commodty/regonal mpacts of Chna's
WTO agrcultural commtments. Ths was done through the calculaton
of 'production concentration indices', which Lu (see Chapter 3) defines
as the rato of the sown area (or output) of the commodty per capta of
the agrcultural populaton of a regon dvded by the same rato for the
country. The nterpretaton of the ndex s that a regon has a comparatve
advantage (dsadvantage) n the commodty f the producton concentraton
ndex (PCI) s greater (less) than one (analogous to the use of the export
concentraton ndex as a measure of 'revealed' comparatve advantage).
The calculatons show relatvely hgh PCIs for the labour-ntensve
commodities (vegetables, fruits, meats and fish products) in the eastern
region, relatively low PCIs for these commodities in the western region,
and values in between for the central region. On average, the eastern
regon has comparatve advantage n all four labour-ntensve commodty
groups. The central regon has comparatve advantage n vegetables and
meat products but not in fruits and fish products. The western region
does not have comparatve advantage n any of the four labour-ntensve
product groups.
PCIs for the land-intensive products (grains, oil seeds, cotton and sugar)
are relatively high for the western region, relatively low for the eastern
regon and n between for the central regon. The western regon has
comparative advantage in all four land-intensive commodity groups, while
the central region has comparative advantage in grains, oil seeds and sugar.
In the eastern region, only sugar has comparative advantage.
In assessng the adjustment mpacts of the reducton n protecton for
agricultural commodities, Lu argues that, in line with China's perceived
comparative advantage, liberalisation will strengthen the tendency for
mports of land-ntensve commodtes and encourage exports of labour-
ntensve commodtes. It s expected that the export promoton effect
wll follow closely the regonal dstrbuton of comparatve advantage
of labour-ntensve commodtes. Wth regard to the negatve mport-
substitution effect, the study postulates two possibilities: one is that
mports of land-ntensve products wll substtute largely for domestc
producton n the regons wth relatvely hgh domestc producton costs
