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191744

The Impact of Tariff Cuts on the Agriculture Economic Growth in China Based on China's Agricultural CGE Model

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Last updated: 24 Dec 2024

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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.

DOI

10.21608/jaess.2021.191744

Keywords

Chines Computable General Equilibrium Model, agriculture, Tariff reduction, Policy

Authors

First Name

Benito

Last Name

Reeberg

MiddleName

G.

Affiliation

The Institute of Agricultural Economic and Development, the Chinese Academy of Agriculture Science,Beijing, China.

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First Name

Huang

Last Name

Delin

MiddleName

-

Affiliation

The Institute of Agricultural Economic and Development, the Chinese Academy of Agriculture Science,Beijing, China.

Email

huangdelin@caas.cn

City

-

Orcid

-

First Name

Y.

Last Name

Ahmed

MiddleName

N.

Affiliation

Cairo University, Cairo, Egypt.

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Volume

12

Article Issue

5

Related Issue

24356

Issue Date

2021-05-01

Receive Date

2021-08-29

Publish Date

2021-05-01

Page Start

425

Page End

430

Print ISSN

2090-3634

Online ISSN

2090-3715

Link

https://jaess.journals.ekb.eg/article_191744.html

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https://jaess.journals.ekb.eg/service?article_code=191744

Order

13

Type

Original Article

Type Code

884

Publication Type

Journal

Publication Title

Journal of Agricultural Economics and Social Sciences

Publication Link

https://jaess.journals.ekb.eg/

MainTitle

The Impact of Tariff Cuts on the Agriculture Economic Growth in China Based on China's Agricultural CGE Model

Details

Type

Article

Created At

22 Jan 2023