Agriculture Reference
In-Depth Information
actvty wth comparatve advantage n an economy or a regon may be
deined as one where the opportunty costs assocated wth the actvty
are relatively low. Alternatively, comparative advantage may be defined as
the actvtes that utlse the abundantly endowed resource n an economy
or regon at a relatvely hgh ntensty. Provdng a drect measure of
comparatve advantage for the varous products across the regons of Chna
would require data on opportunity costs or factor intensities, as well as
production cost proportions. This would be highly demanding. Therefore,
we use an alternatve method to measure comparatve advantage. Smlar
to the wdely used method that takes the export concentraton ndex for
a commodity as an indicator of 'revealed' comparative advantage, we
use the 'producton concentraton ndex' of a product for a regon as an
ndcator of comparatve advantage. The producton concentraton ndex of
a product for a region is defined as the ratio of the sown area (or output)
for the product per capta of the agrcultural populaton for the regon
dvded by the same rato for the naton as a whole. The nterpretaton
of the ndex s straghtforward: a regon has a comparatve advantage f
the measured value of the producton concentraton ndex s larger than
one and has a comparatve dsadvantage f the value s less than one. The
greater the margin by which the index exceeds (or is less than) one, the
stronger the comparatve advantage (or dsadvantage) s for the gven
product n the regon.
Table 3.4 presents the ratios of production concentration for major
agrcultural products for the provnces (as well as the autonomous
regons and muncpaltes under the drect admnstraton of the central
government). The average indices for three broadly defined regions (the
east, middle and west regions) are also reported. As indicated by the
results, production concentration indexes for the labour-intensive products
are relatively high for the east region and low for the west region, with the
middle region in between. By comparison, production concentration indexes
for the land-ntensve products are relatvely hgh for the west regon and
low for the east region, wth the mddle regon agan n between.
To facltate the examnaton of the regonal dstrbuton of the
agricultural impact of China's WTO entry, it is useful to present the
concentraton ndces for the two categores of agrcultural products n the
framework of a plane-coordinate system (see Figure 3.4). The horizontal and
