Internal Returns, Budget Issues and the Internationalisation of the grain market in China

Abstract

The aim of this paper is to review the reforms in the inter-regional transfer system for grain in China and to identify some of their implications. The budget effects of market reform at both central and provincial levels and the direct and indirect effect of the development of the internal marketing system on the forces for the integration of the domestic and international grain markets are the focus in the paper. We argue that, in analysing these interactions, it is helpful to think of China not as a single economy but as a group of provincial economies. In this context it is necessary to examine the level of autonomy at provincial level for the administration of grain sector policies and how local interests affect not only the patterns of internal trade but also the forces for the integration of this group of provincial economies with the world market.