The content of trade factors in Chinese agricultural products

GAO Xue 1,2 LI Gucheng1

(1.College of Economics and Management of Huazhong Agricultural University)
(2.Hubei Rural Development Research Center)

【Abstract】The HOV model shows that trade among products is essentially a trade among factors. When a country participates in free trade, it becomes a net exporter of factors of which it has an abundance and a net importer of factors that are rare in the country. This article uses the factor content of trade approach to calculate the factor content, including land, labor, and capital of major Chinese agricultural products between 1992 and 2013 and organize these three factors into a single analytical framework. The article also studies China’s relative factor endowments based on Leamer improvement. The calculations indicate that the net total labor factor export is decreasing. The trade content of land factor is a net import, and the capital factor which is a net import is increasing. Meanwhile, the data shows that China has a comparative advantage in agricultural labor, but not in land or capital. Trade of agricultural products in different qualities have different influences on the production factors.

【Keywords】 HOV model; factor content ; Leamer improvement; trade in agricultural products;


【Funds】 Supported by the National Natural Science Foundation of China (71273103;71473100) Young Talents Support Program of National “High-level Personnel” Self-Technological Innovation Fund of Huazhong Agricultural University(2012YQ003) Funded by the Fundamental Research Funds for the Central Universities (2662015PY093)

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(Translated by ZHANG Liping)


    [1]. ①The theory expansion based on the HOV Model by Leamer is called “Leamer improvement.” Leamer suggests that the proper method to deduce the relative abundance of factors is to utilize factor content (including factor content of trade and direct factor mobility) under the condition of unbalanced trade. Now that the mobility of agricultural production factors is insufficient, this method is applicable to this article as well. The Leamer improvement is applied to the latter section of this article, which aims to measure the relative abundance and comparative advantage of China’s agricultural factors. [^Back]

    [2]. ②The Major agricultural products include labor-intensive and land-intensive agricultural products. [^Back]

    [3]. ③The factor content of agricultural trade in this article refers to the trade volume of all factors contained in agricultural trade, and the reference (Liu, 2011) adopts the saying of trade content of one factor to represent the trade volume of one factor, and the trade content is comprised of the net import and net export of factors. [^Back]


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This Article


CN: 11-1692/F

Vol , No. 03, Pages 47-58

March 2016


Article Outline


  • Introduction
  • 1 Literature Review
  • 2 Research methods and data sources
  • 3 Calculation Analysis and Discussion
  • 4 Research conclusions and policy suggestions
  • Footnote