ABSTRACT
The policy changes in China's agricultural trade and agricultural subsidies since the country's WTO accession in 2001 have had a great impact on China's rural development and poverty alleviation. China has largely reduced tariffs for agricultural products and eliminated more than 50 agricultural product licenses on the date of accession in order to fulfill its commitments under the accession pro-tocols. These policy changes have resulted in a five-fold increase in China's agricultural imports from 2001 to 2009. However, China's agricultural exports have increased by only 150 percent during the same period. To ensure adequate agricultural production, guarantee food security, and alleviate the negative impact of trade liberalization, the Chinese government replaced agricultural taxes with agricultural subsidies. While the subsidies have been very successful and have increased agricultural supply, resulting in eight years of bumper harvest in China, the impact of these subsidies on other sectors of the economy is less clear. China is now in its 12th five-year plan (2011–2015), which includes new agricultural related policies for rural development focusing on food security and food safety. As the government changes the policy focus from export orientation to domestic consumption, it is likely that its foreign trade policy will change accordingly. With the continuous reduction in exports, agricultural subsidies are likely to continue to offset the possible negative effect of trade liberalization on agriculture. What can be expected of China's agricultural policy in the next decade if the policy of providing agricultural subsidies continues?
