Protection and Comparative Advantage of Chinese Agriculture: Implications for Regional and National Specialization

Cheng Fang and John Beghin ()

Staff General Research Papers Archive from Iowa State University, Department of Economics

Abstract: We assess the protection and comparative advantage of China's major agricultural crops for six regions using a modified Policy Analysis Matrix (PAM) and 1997-2000 data. Agricultural protection in China is reminiscent of the import-substitution era with systematic patterns of input subsidization and output taxation through foreign exchange rationing. Effective protection is positive and significant for sugarcane, and to a lesser extent, early indica rice. Effective taxation burdens tobacco, cotton, and japonica rice. At the national level, China has a comparative advantage in labor-intensive crops (fruits and vegetables, cotton, and tobacco) and a disadvantage in many land-intensive crops (wheat and oilseeds). Within the grain sector, japonica and late indica rice are nationally competitive. Regional patterns reveal that corn production is competitive in two of the six regions and could become competitive in two other regions with moderate productivity gains. Wheat and oilseeds production exhibits a large regional variation in their lack of competitiveness, suggesting that prospects to improve productivity vary greatly by region.

Date: 2003-08-01
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Persistent link: https://EconPapers.repec.org/RePEc:isu:genres:10102

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