Policy Options for China's Bio-ethanol Development and the Implications for Its Agricultural Economy

Huanguang Qiu, Jikun Huang, Michiel Alexander Keyzer and Wim van Veen

China & World Economy, 2008, vol. 16, issue 6, pages 112-124

Abstract: The present paper analyzes the potential impacts of bio-ethanol expansion on agricultural production, food prices and farmers' incomes in different regions of China. The results show that increase in demand for feedstock to produce bio-ethanol will lead to large increase in the prices of agricultural products. The increase in prices will trigger a significant rise in the production of feedstock at the cost of lower rice and wheat production. The study also reveals that the impacts of bio-ethanol on farmers' incomes vary largely among regions and farmer groups. Given the expected expansion of bio-ethanol production in the future, and the limited land resources for feedstock production in China, the viability of different crops as feedstock for bio-ethanol requires careful analysis before a large-scale expansion of China's bio-ethanol program. Bio-ethanol production in China should be relying more on the second generation of bio-ethanol technologies (i.e. using celluloses to produce bio-ethanol), and China's government should increase research investment in this field. Copyright (c) 2008 The Authors Journal compilation (c) 2008 Institute of World Economics and Politics, Chinese Academy of Social Sciences.

Date: 2008

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