| In this paper we provide an analysis of China's cotton policy and develop a framework to quantify the impact of both China's World Trade Organization (WTO) accession and Bt (Bacillus thuringiensis) cotton adoption on Chinese and U.S. cotton sectors. We use a Chinese cotton sector model consisting of supply, demand, price linkages, and textiles output equations. A two-stage framework model provides gross cropping area and total area for cotton and major substitute crops from nine cotton-producing regions in China. Cotton demand, total fiber demand, and cotton share are estimated for each end user. The estimated parameters from the Chinese model are then used with the Food and Agricultural Policy Research Institute (FAPRI) modeling system to simulate various... |
