Economic Development and Cultural Change maize. Such a change would work against the formation of the new pat terns of imports and China could end up continuing to import wheat and export(or at least not import) maize. The same type of trade-off could happen in the intense rice-wheat regions of the Yangtse valley VIlL. Alternative Projections To test the sensitivity of the results to changes in the underlying forces that drive the supply and demand balances, a number of alternative sce- narios are run with alterations in the baseline growth rates of the key variables, including income, wages, price, population, and investment in technology. The results indicate that low population growth rates would reduce grain demand by 32 MMT in 2020 and make China into a mar ginal grain exporter by the end of the projection period (table 3, row 5) With high population growth, imports increase to 56 MMT(row 6) Low-income growth causes a decline in projected total grain demand from 601 MMT to 555 MMT, resulting in moderate exports of grain in 2020, while rapid income growth causes projected imports to nearly tr ple to 85 MMT(rows 7-8) Imports rise sharply to 44 MMT if real wages increase faster (e.g 2% annually) than the baseline rate (1%o-table 3, row 5). However, China still has a large, still-isolated agrarian population, of which only about one-third have off-farm jobs. With rising wages, the labor force slowly is becoming integrated with the rest of the economy through emerging labor markets. The potential for an accompanying drain in the rural labor force should keep rapid real-wage increases from taking off for at least several decades. Moreover, if wage rates do rise quickly and labor begins flowing off the farm, farmers will replace lower labor input with capital-intensive inputs such as farm machinery and herbicides Since these types of capital inputs do not exist in the structural model (owing to a lack of data), the 1% increase in wage rates should be looked on as the percentage increase rise in the wage rate over the rate of rise of the price of capital. If real-wage increases (relative to the cost of capital pproach those in Taiwan and Korea(3% annual growth), imports could ncrease to as much as 58 MMT Table 4 also illustrates the large impact of investment in agricultural research and irrigation on production and trade balances (rows 2-3),a result that is hardly surprising given the large contribution to the supply of agricultural research and the technology it produces. Increases in the growth rate of agricultural research and irrigation investment from 3. 5% to 4.5% per year would transform China from an importer to an exporter by early 2010. If, instead, growth in annual investment in agr research and irrigation fell moderately, from 3. 5% per year(as forecast under the baseline projections)to 2. 5%, total production would be only 514 MMt by 2020. with no change in the demand-side assumptions imports under such a scenario would reach a level of 83 MMT. Copyright 1999 All rights reserved.Copyright © 1999. All rights reserved