The Impact of Tariff Cuts on the Agriculture Economic Growth in China Based on China's Agricultural CGE Model | ||
| Journal of Agricultural Economics and Social Sciences | ||
| Article 13, Volume 12, Issue 5, May 2021, Pages 425-430 PDF (1.28 M) | ||
| Document Type: Original Article | ||
| DOI: 10.21608/jaess.2021.191744 | ||
| Authors | ||
| Benito G. Reeberg1; Huang Delin* 1; Y. N. Ahmed2 | ||
| 1The Institute of Agricultural Economic and Development, the Chinese Academy of Agriculture Science,Beijing, China. | ||
| 2Cairo University, Cairo, Egypt. | ||
| Abstract | ||
| This paper explores the effects of tariff reduction on macroeconomic and sectoral indicators in China using a computable general equilibrium approach. As of December 2017, the Ministry of Finance of the People’s Republic of China implemented tariff cuts to 187 consumer commodities, among which 29 agricultural or processed agricultural commodities. We then proposed a tariff policy shock, of the 51. 362%, to these agricultural and agricultural processing industries using the CACGE model. The simulation results indicate that the tariff reduction will have a positive effect on the Chinese economy, this conclusion was based on the decrease in consumer prices CPI, growth in the gross domestic product GDP, and increases in the real wages and exports. In addition to these macro level indicators, there will also be positive effects for the specific industries mainly the heavy industry and the service industry But when answering the main question, we find that the proposed policy will have a negative effect on the agricultural sector, with the total output dropping by almost 20%, employment with a loss of 20%, and investment shrinking by 22%. The losses to the sector are largely contributed to the losses in the soybean industry. But the results do imply that the increased agricultural imports and reduced output of the specific commodities will not stifle the growth in the agricultural exports, which will rise by 10% over the period 2018-2030. | ||
| Keywords | ||
| Chines Computable General Equilibrium Model; Agriculture; Tariff Reduction; Policy | ||
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