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The impact of trade liberalization on poverty reduction in rural China

The impact of trade liberalization on poverty reduction in rural China The purpose of this paper is to investigate how trade liberalization influences rural poverty reduction in China.Design/methodology/approachThe authors make use of China Family Panel Studies survey data, take annual income of farmers of RMB2,300 and RMB3,450 as the poverty lines (poverty line 1 and poverty line 2, respectively). Residents below poverty line 1 and poverty line 2 are 2,580 and 2,661, respectively. Probit model is used to estimate the impact of trade liberalization on the poverty probability. Income-deciding equation is used to estimate the impact of trade liberalization on the income level of poor residents in rural areas. Income-deciding equation is also used to examine the transmission mechanism of trade liberalization affecting rural poverty.FindingsThis study finds that trade liberalization can reduce the poverty probability of rural residents and promote the income growth of poor residents in rural areas. Trade liberalization increases the income of poor residents and reduces poverty through transmission mechanisms such as promoting economic growth and financial expenditure.Originality/valueTo the authors’ knowledge, this is the first empirical study to quantitatively model the impact of trade liberalization on rural poverty reduction in China using residents’ survey data. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png China Agricultural Economic Review Emerald Publishing

The impact of trade liberalization on poverty reduction in rural China

Wang, Jun; Hu, Yong
China Agricultural Economic Review , Volume 10 (4): 12 – Oct 17, 2018
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Publisher
Emerald Publishing
Copyright
© Emerald Publishing Limited
ISSN
1756-137X
DOI
10.1108/caer-01-2018-0019
Publisher site
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Abstract

The purpose of this paper is to investigate how trade liberalization influences rural poverty reduction in China.Design/methodology/approachThe authors make use of China Family Panel Studies survey data, take annual income of farmers of RMB2,300 and RMB3,450 as the poverty lines (poverty line 1 and poverty line 2, respectively). Residents below poverty line 1 and poverty line 2 are 2,580 and 2,661, respectively. Probit model is used to estimate the impact of trade liberalization on the poverty probability. Income-deciding equation is used to estimate the impact of trade liberalization on the income level of poor residents in rural areas. Income-deciding equation is also used to examine the transmission mechanism of trade liberalization affecting rural poverty.FindingsThis study finds that trade liberalization can reduce the poverty probability of rural residents and promote the income growth of poor residents in rural areas. Trade liberalization increases the income of poor residents and reduces poverty through transmission mechanisms such as promoting economic growth and financial expenditure.Originality/valueTo the authors’ knowledge, this is the first empirical study to quantitatively model the impact of trade liberalization on rural poverty reduction in China using residents’ survey data.

Journal

China Agricultural Economic Review – Emerald Publishing

Published: Oct 17, 2018

Keywords: Poverty reduction; Trade liberalization; Rural China

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