China led in 2019 (latest available data) domestic support under Annex 2 of the World Trade Organization (WTO) Agreement on Agriculture (Green Box).

A report from this body indicates that China granted $177 billion under this item and allocated the largest share to infrastructure services.

What is the green box? It refers to domestic support measures listed in Annex 2 of the Agreement on Agriculture, which are exempt from reduction commitments.

These measures must meet the requirement of having no, or at most minimal, trade-distorting effects or effects on production.

Therefore, all Green Box measures for which exemptions are claimed must meet the following key criteria: the support in question will be provided through a government program financed by public funds (including foregone tax revenues) that does not involve transfers from consumers; and the support in question will not have the effect of providing price support to producers.

Domestic support

These Chinese resources were allocated to General Agricultural Development Programs, flood control projects, drainage and irrigation facilities, rural roads, rural power grids, small farmland water supply facilities, soil and water conservation.

A considerable level of aid was also granted to other general services, which was allocated mainly to agricultural administration, operating expenses related to buildings, facilities and salaries, external exchanges and cooperation, subsidies to comprehensive financial resources earmarked for agriculture, administrative and service agencies in the agricultural sector, as well as retirement pensions for officials of these government agencies.

Farmers

WTO added that peak levels were recorded for regional assistance programs in 2016 (disbursements for aid and assistance to disadvantaged regions), infrastructure services from 2017 to 2019, other general services in 2007-2008, and decoupled income support from 2016 to 2019 (direct payments to farmers).

In the analysis provided in this paper, data contained in Member notifications for domestic support submitted from 2000 through 2019 are used.