Economics

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Effects of alternative Chinese policies on the world grains market
(1991-10) B.H Gunasekara, H Don; Rodriguez, Gil; Andrews, Neil
The implications for the world grains market of a sustained 4 percent reduction in China's domestic absorption, and of the removal of its trade barriers on highly protected manufacturing industries, were analysed using a world agricultural trade model. these policy changes were modelled both alone and in conjunction with a shift to complete grain self-sufficiency in China and with reduction in farm support in other major grain producing countries. In themselves, the reduction in absorption and removal of manufacturing trade barriers in China would have only marginal effects on the world grains market. If however, China were also to achieve grain self-sufficiency while adopting these macroeconomic and trade policies, world grain prices and trade would be likely to fall considerably. On the other hand even a partial (50 per cent ) removal of protection in the US and EC grains sectors, Simultaneously with the above Chinese macroeconomic and trade policy changes, could substantially increase world grain prices and trade. These positive effects would be considerably reduced if at the same time China were to become self-sufficient in grain.