Tracking Distortions in Agriculture: China and Its Accession to the World Trade Organization

Abstract

This article examines the impacts of China's accession to the World Trade Organization ( wto ) on prices in its agricultural sector. The analysis uses a new methodology to estimate nominal protection rates in China's agricultural sector before its accession to the wto . These new measures account for differences in commodity quality within China and between China and world markets. The analysis shows that some of China's agricultural commodities are well above world market prices and others are well below. The article also assesses market integration and efficiency in China. It finds high degrees of integration between coastal and inland markets and between regional and village markets. The remarkable improvements in market performance in recent years mean that if increased imports or exports affect China's domestic price near the border, producers throughout most of China will feel the price shifts.