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Measuring the Effects of a Sliding Scale Duty System on China's Cotton Market: A Spatial Equilibrium Approach
Author(s) -
Wang Xuejun,
Maeda Koshi,
Hokazono Satoshi,
Suzuki Nobuhiro,
Kaiser Harry M.
Publication year - 2014
Publication title -
agribusiness
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.57
H-Index - 43
eISSN - 1520-6297
pISSN - 0742-4477
DOI - 10.1002/agr.21374
Subject(s) - china , econlit , economics , agricultural economics , scale (ratio) , partial equilibrium , general equilibrium theory , microeconomics , geography , chemistry , biochemistry , cartography , archaeology , medline
We examined the impacts of China's implementation of a sliding scale duty (SSD) system on the world cotton market. The analysis was based on a spatial equilibrium model of major importing and exporting regions that incorporates key features of China's SSD. The model solutions suggest that implementation of the SSD system improved market access for imports of cotton in China, which benefitted cotton processors, and adversely affected China's cotton producers. The Chinese market price of cotton decreased, imports increased, and domestic production declined. Furthermore, subsequent adjustments of the SSD system increased market access for cotton, which benefitted China cotton processors. These changes in China's cotton trade policy altered conditions in the world. [EconLit Citations: C600; F130; Q170].