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Changes in trade and domestic distortions affecting China's agriculture

Author

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  • Huang, Jikun
  • Liu, Yu
  • Martin, Will
  • Rozelle, Scott

Abstract

This paper assesses the implications of China's trade and domestic policies for incentives to producers in China. It uses a price comparison methodology (nominal rates of assistance--at the border and the farmgate), with adjustments for exchange rate distortions in the first part of the sample period (1981-1994). On average, distortions to agricultural incentives have been reduced. In the early 1980s, on average, China's domestic prices were far below international prices. There were substantial variations, however, between imported (which were being protected) and exported goods. During the 1980s and 1990s the gap between domestic and international prices for both imports and exports narrowed initially mainly due to the elimination of domestic policy distortions. Between the mid-1990s and 2004, trade liberalization policy furthered narrowed the gap between world and China farmgate prices. By the mid-2000s, China's agriculture was operating with only small price distortions.

Suggested Citation

  • Huang, Jikun & Liu, Yu & Martin, Will & Rozelle, Scott, 2009. "Changes in trade and domestic distortions affecting China's agriculture," Food Policy, Elsevier, vol. 34(5), pages 407-416, October.
    • Handle: RePEc:eee:jfpoli:v:34:y:2009:i:5:p:407-416
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    Cited by:

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    7. Anderson, Kym, 2022. "Trade-related food policies in a more volatile climate and trade environment," Food Policy, Elsevier, vol. 109(C).
    8. Arnade, Carlos & Cooke, Bryce & Gale, Fred, 2017. "Agricultural price transmission: China relationships with world commodity markets," Journal of Commodity Markets, Elsevier, vol. 7(C), pages 28-40.
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    10. Fan, Linlin & Nogueira, Lia & Baylis, Katherine R., 2013. "Agricultural Market Reforms and Nutritional Transition in Rural China," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C. 150203, Agricultural and Applied Economics Association.
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    12. Dingyang Zhou & Hirotaka Matsuda & Yuji Hara & Kazuhiko Takeuchi, 2012. "Potential and observed food flows in a Chinese city: a case study of Tianjin," Agriculture and Human Values, Springer;The Agriculture, Food, & Human Values Society (AFHVS), vol. 29(4), pages 481-492, December.
    13. Flaig, Dorothee & Stone, Susan & van Tongeren, Frank, 2014. "Global Value Chains and the Cost of Protection: Insights from the New OECD Trade Model," Conference papers 332508, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    14. Rada, Nicholas & Wang, Chenggang & Qin, Lijian, 2015. "Subsidy or market reform? Rethinking China’s farm consolidation strategy," Food Policy, Elsevier, vol. 57(C), pages 93-103.
    15. Yi, Fujin & Sun, Dingqiang, 2014. "Grain Subsidy, Liquidity Constraints and Food security—Impact of the Grain Subsidy Program on the Grain-Sown Areas in China," 2014 Annual Meeting, July 27-29, 2014, Minneapolis, Minnesota 169779, Agricultural and Applied Economics Association.
    16. Xie, Xiang-xiang & Zhang, An-lu & Cai, Yin-ying & Zhang, Yu, 2020. "How government-led land consolidation efforts achieve grain production stability? An empirical analysis in Hubei Province, China," Land Use Policy, Elsevier, vol. 97(C).
    17. Jikun Huang & Jun Yang & Scott Rozelle, 2013. "The Political Economy of Food Pricing Policy in China," WIDER Working Paper Series wp-2013-038, World Institute for Development Economic Research (UNU-WIDER).

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