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Measuring the Effects of a Sliding Scale Duty System on China's Cotton Market: A Spatial Equilibrium Approach

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  • Xuejun Wang
  • Koshi Maeda
  • Satoshi Hokazono
  • Nobuhiro Suzuki
  • Harry M. Kaiser

Abstract

ABSTRACT We examined the impacts of China's implementation of a sliding scale duty (SSD) system on the world cotton market. The analysis was based on a spatial equilibrium model of major importing and exporting regions that incorporates key features of China's SSD. The model solutions suggest that implementation of the SSD system improved market access for imports of cotton in China, which benefitted cotton processors, and adversely affected China's cotton producers. The Chinese market price of cotton decreased, imports increased, and domestic production declined. Furthermore, subsequent adjustments of the SSD system increased market access for cotton, which benefitted China cotton processors. These changes in China's cotton trade policy altered conditions in the world. [EconLit Citations: C600; F130; Q170].

Suggested Citation

  • Xuejun Wang & Koshi Maeda & Satoshi Hokazono & Nobuhiro Suzuki & Harry M. Kaiser, 2014. "Measuring the Effects of a Sliding Scale Duty System on China's Cotton Market: A Spatial Equilibrium Approach," Agribusiness, John Wiley & Sons, Ltd., vol. 30(3), pages 345-365, June.
    • Handle: RePEc:wly:agribz:v:30:y:2014:i:3:p:345-365
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    File URL: http://hdl.handle.net/10.1002/agr.21374
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    Cited by:

    1. Wenshou Yan & Kaixing Huang, 2022. "Geographic politics, loss aversion and trade policy: The case of cotton in China," The World Economy, Wiley Blackwell, vol. 45(9), pages 2854-2881, September.

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