Technology Implication of Agricultural Sectors in China: A CGE Analysis Based on CHINAGEM Model

The primary goal of Chinese agricultural development is to guarantee national food security and the supply of major agricultural products. Hence, the improvement of agricultural technology plays a vital role in China for economic development. Technological change in agricultural sector results in higher future economic growth as well as food security, both in food consumption and availability. By constructing China’s agriculture general equilibrium model (CGE), this paper explains the impact of agricultural technology change. This paper constructs a dynamic CGE model based on CHINAGEM model for analyzing the technology increase in China Agricultural sector and then describes the construction of database and policy scenario. Model such as Computable General Equilibrium (CGE) model is used to conduct analysis of the economy-wide impacts of new agricultural technologies in China. In the general equilibrium model, some external variables are established; any part of structural changes caused by its exogenous variables can affect the entire system, resulting in general changes of goods, prices and quantity of factor. Simulation result of this paper indicates the agriculture sector output increases respectively; employment decreases; production cost decreases; and investment increases. Finally this paper describes the effects of the policy of technology changes by comparing policy scenario to baseline scenario and explains the impact of technology changes in China economy using CHINAGEM model.