Quotas and Grain Production in China

China’s markets developed rapidly during the fist two decades of reform (Naughton, 1995). In agriculture, with the exception of several short policy periods, leaders have encouraged the emergence of markets (Rozelle et al., 2000). Most commodities are traded by private traders and commercialized state grain bureaus (Sicular, 1995a). Throughout the 1990s markets have become more integrated, and transaction costs have fallen as competition has increased (Park et al., 2002).