To read this content please select one of the options below:

The impact of trade liberalization on poverty reduction in rural China

Jun Wang (School of Economics & Trade, GuangDong University of Foreign Studies, GuangDong, China)
Yong Hu (School of Economics, Zhejiang Gongshang University, Zhejiang, China)

China Agricultural Economic Review

ISSN: 1756-137X

Article publication date: 11 July 2018

Issue publication date: 17 October 2018

1052

Abstract

Purpose

The purpose of this paper is to investigate how trade liberalization influences rural poverty reduction in China.

Design/methodology/approach

The 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.

Findings

This 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/value

To 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.

Keywords

Acknowledgements

This research is supported by the Humanity and Social Science Foundation of the Ministry of Education of China (Grant Nos 15YJA790056 and 15JJD790042), Key institute of Humanities and Social Science in Zhejiang (Zhejiang Gongshang University, Applied Economics), Modern Business Research Center of Zhejiang Gongshang University (16YXYP03), Qianjiang Talents Program of Zhejiang province (Grant No. QJC1602003).

Citation

Wang, J. and Hu, Y. (2018), "The impact of trade liberalization on poverty reduction in rural China", China Agricultural Economic Review, Vol. 10 No. 4, pp. 683-694. https://doi.org/10.1108/CAER-01-2018-0019

Publisher

:

Emerald Publishing Limited

Copyright © 2018, Emerald Publishing Limited

Related articles