Developing an input-output table of China for detailed agricultural policy analysis

Xiaohe Liu, Benjamin Buetre, Xu Jian, Ping Liu and Troy Podbury

No 331390, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: China is a large country with a rapidly growing economy. Although the share of the agricultural sector in the Chinese economy is declining, agriculture remains an important sector, employing hundreds of millions of people. Given the sheer size of Chinese agriculture, developments in domestic agriculture have major impacts both in China and also in the rest of the world, with potential for large impacts on global agricultural markets. With the entry of China into the WTO in 2001, and the pursuit of regional and bilateral trade deals both by China and trading partners, the ability to provide an accurate assessment of the potential impact of reforms is imperative. Due to the key role of agriculture and its linkages with the rest of the Chinese economy, a general equilibrium (GE) approach is frequently chosen for this type of assessment. While this approach is appropriate, the accuracy of the results relies on the validity of the underlying data – especially the input-output (IO) tables. Inaccuracies and misrepresentation in the input-output table can bias the results and lead to misleading or incorrect policy conclusions. For China, the lack of a detailed representation of important agricultural sectors in published input-output tables prevents a more targeted and relevant analysis of agricultural policy change. In this paper, we build an alternate IO table with representations of important agricultural sectors for China. We then evaluate the IO table by comparing results from a simple economic impact analysis using the new data set and another Chinese IO table from a commonly used global GE database. This evaluation shows that discrepancies in representation of agricultural sector in the IO table can bias the results.

Keywords: Agricultural and Food Policy; Research Methods/Statistical Methods (search for similar items in EconPapers)
Pages: 21
Date: 2005
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