| With China’s accession to the WTO, concerns have arisen over the possible negative welfare impacts on domestic agricultural producers. The broad concern is that China’s domestic agricultural prices will be pushed down even further, leading to a greater widening of the gap between rural and urban incomes. It is widely believed that declining price ratio of agricultural to industrial products, the so-called “price scissors”, is one of the major reasons for increasing rural-urban income differences over the past decades. Therefore, improving the terms of trade in favor of agricultural products is a broad policy goal in China. But is this possible with the country joining the WTO? While there is a general perception that the price scissors have negatively... |
