Agriculture Reference
In-Depth Information
shares in total output. In the period 1991-2000, however, which followed the
major industrial reforms, the eastern region benefited most from growth of
foreign investment and development of the private sector. During this time,
the regonal ncome gap between the coastal and nland regons wdened
considerably. Income disparity within the regions, however, declined.
The ncreasng gaps between rural and urban ncomes and between
ncomes n coastal and nland regons are of consderable concern n Chna.
The lkelhood of WTO accesson ncreasng these dspartes was a major
factor behnd resstance to accesson. Jang (see Chapter 6) modelled how
WTO accesson was lkely to affect these ncome dspartes usng the CERD
model developed under this project (Chen and Duncan 2008).
In simulations of the WTO accession commitments, crops, food processing,
motor vehicles and parts, and machinery sectors are affected adversely by
the accession, particularly the motor vehicles and parts sector. Other sectors
benefit, particularly the light manufacturing sector. Agricultural production
declnes most n the eastern regon and least n the central regon. The study
results show the usefulness of general equilibrium analysis, which has taken
account of there beng a hgher return to labour-ntensve actvtes outsde
of agrculture n the eastern regon. The eastern regon does by far the best
overall because it realises most of the gains in allocative efficiency. Hence,
there s an ncrease n regonal ncome dsparty. Rural household ncomes
ncrease most n the eastern regon because they have the best opportuntes
for earning off-farm income. Across the regions, however, rural household
ncomes ncrease less than urban household ncomes.
In the project, Jiang (see Chapter 7) also undertook some simulations
to examne the mpacts of polces that could be adopted to mtgate
these adverse effects on farm ncomes. One polcy opton tested was the
use of a producton subsdy. It was found that f agrculture were to be
subsidised to maintain the pre-accession grain self-sufficiency rate, the
subsdy would be 7.2 bllon yuan. If the target were to mantan the food
self-sufficiency rate, the subsidy would be 180 billion yuan. Another policy
opton tested was an ncrease n agrcultural research and development
to mprove agrcultural productvty. It was estmated that Chna would
have to almost double the level of agrcultural research and development
in order to maintain the food self-sufficiency rate.
