In this paper, by employing Chinese provincial data, we develop a simultaneous equation model to estimate the relationship between agricultural trade and rural poverty in post-reform China. We find that trade liberalization can affect China's poverty both directly through providing the poor with effective access to factor and product markets, and indirectly through its ‘growth effects' and ‘distributional effects'. However, although China's impressive economic growth and trade expansion have led to remarkable reduction in rural poverty over the last two decades, this process was negatively affected and severely slowed down by recent deterioration in income distribution
