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