Spatial structure of agricultural production in China

The spatial structure of county-level agricultural production in China in 1999 is analysed. A convenient simple method that corrects for both spatial autocorrelation and spatial heterogeneity in the input-output relationships using spatial lag models and an allowance for the response coefficients to vary across relatively homogeneous regions are described. Empirical results suggest an abundant labour supply and extensive use of agricultural machinery reflected in its declining price. Although mechanization is relatively new, machines have replaced fertilizer in agricultural production in the North, Northeast, Northwest and East regions while irrigation and fertilizer are the significantly important inputs in the Central and Southwest regions.