Did agricultural technological changes affect China's regional disparity?

Author： Liu Xiaoyun Wang Xiuqing Xin Xian

ISSN： 1756-137X

Source： China Agricultural Economic Review, Vol.4, Iss.4, 2012-11, pp. : 440-449

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Abstract

Purpose - China's agricultural sector has developed very rapidly in the past 30 years and agricultural technological progress is deemed one of the most substantial factors leading to its rapid agricultural GDP growth. The purpose of this paper is to assess the impacts of China's agricultural technological changes on its regional disparity. Design/methodology/approach - The study uses a computable general equilibrium (CGE) model of multiple regions and multiple sectors to investigate the impacts of agricultural technological changes on regional disparity. The CGE model structure includes production side, demand side, and market clearing conditions. Findings - The results suggest that agricultural technological changes significantly reduced China's agricultural regional disparity and accounted for 40 percent reduction in agricultural regional disparity in terms of agricultural GDP per capita. Agricultural technological changes, however, led to an increase in China's overall regional disparity and accounted for 6 percent increase in its overall regional disparity in terms of per capita GDP. Practical implications - China's GDP has been growing very rapidly since 1978 and agricultural GDP has been playing a decreasing role in China's overall GDP. Regional disparity in non-agricultural GDP per capita overweighted the equalization of agricultural GDP per capita. The results imply that the Chinese government should resort more to non-agricultural development to fight against the enlarging regional disparity. Originality/value - China's agricultural technological changes have led to an increase in China's overall regional disparity while the changes have significantly reduced China's agricultural regional disparity.