The Impact of Trade Liberalization on China's Agriculture and Rural Economy

This paper analyzes the effect of China's trade liberalization process on the nation's rural economy. Although some leaders fear there will be substantial negative effects on China's rural sector and food security, a closer examination shows that the World Trade Organization (WTO) accession is part of a longer-term, efficiency-enhancing process of liberalization and opening to the outside world. When analyzed from this angle, the impacts of WTO reform, while not trivial, reflect trends already evident, many of which are positive. For example, while WTO accession may accelerate price decreases for certain crops, such as wheat and corn, prices should rise and export opportunities should increase for commodities such as meats, fruit, and fish. Rural wages in most sectors that employ rural workers should also rise. Finally, this paper describes a number of different ways that China and its rural residents will be able to protect themselves after trade rules are liberalized.