Removing border protection on wheat and rice: Effects on rural income and food self-sufficiency in China

Abstract

In this paper, I use the Monash Multi-Country model - a dynamic Computable General Equilibrium model of China, Australia and the Rest of the World - to analyse the effects of removing border protection on wheat and rice in China. The analysis points to the possibility that removing border protection on wheat and rice may lead to an increase in rural income in China. This is mainly due to the following two factors. First, removing border protection on wheat and rice not only leads to a contraction in agricultural activities, but also leads to an expansion in manufacturing and services activities. Second, on average, rural households in China obtain over half of their income from manufacturing and services activities. © 2008 The Authors Journal compilation © 2008 Australian Agricultural and Resource Economics Society Inc. and Blackwell Publishing Asia Pty Ltd.