Economic Development and Cultural Change This level of grain imports could be expected only if there is contin- ued decline in the growth of agricultural investment and if the govern ment does not or cannot respond as imports rise with countervailing pol late food production growth. agricultural res and irrigation investments, however, have already recovered in recent years. In the mid-1990s, when grain prices rose in response to short-term tightening of grain supplies, policy makers promised and have begun to deliver greater agricultural investments. While most of the investments have been targeted at irrigation, improvements in the operation of re- earch institutes has also been announced In addition to domestic investments, the government could also look to the international arena for technological products that would allow China time to redevelop its agricultural research system. In fact, there are currently several large intermational seed companies investigating the possibilities of moving into Chinas market for seeds. Such moves would duce the expected decline in grain supply and also decrease the ex pected level of imports even if growth in public investments slowed Weak intellectual property rights and tightly controlled and fractured do- mestic seed markets, however, remain a serious barrier to active partici- pation by multinational technology firms in China Production, demand, and imports, however, are insensitive to small changes in price trends, a characteristic that will affect projections of how China's entry into(or exclusion from) the World Trade Organiza tion will affect food balances. Output price trends do affect China's grain balances, but the effects are small. At the baseline level, for every 0.5 ncrease(decline) in the annual projected grain price trend, imports fall rise) by 7 MMT in 2020(table 4, rows 6 and 7). The baseline price ssumption(an annual 0.5% world price decline as projected by both the World Bank and Rosegrant, Agcaoili, and Perez) was chosen as the most likely to be realized for two reasons. Grain prices have shown a down trend in real terms during the entire twentieth century. Also, if China gains admittance to the World Trade Organization (WTO), it politicall cannot support prices at the level maintained by its East Asian neighbors Even without WTO membership, fiscal problems in China may keep it from using high price supports. In the event that China decided to adopt protectionist policy and prices rose in real terms at 0.5(1.0)% annually during the next 3 decades, China would import(export) about 5 MMT (7 MMT) in 2020 Assuming a constant response of production to erosion and salinity the level of tal deterioration increases, slight increases in their trends (e.g, an increase of 0. 2% per year from 0.2 to 0.4%)have ittle effect on output(a decline of only about 4 MMT in 2020; see table 4). Extrapolating from these results, substantial effects would not occur until the erosion and salinity rates accelerate to growth levels five times Copyright 1999 All rights reserved.Copyright © 1999. All rights reserved