Impact of trade costs on the growth of agricultural trade in different regions of China

JIA Wei1 GONG Tongyao2 QIN Fu1

(1.Institute of Agricultural Economics and Development of Chinese Academy of Agricultural Sciences)
(2.Center for Agricultural and Rural Economy, Shandong University of Finance and Economics)

【Abstract】This paper constructs a CGE model of eight regions and two sectors, and uses the data of China’s regional input-output tables in 2002 and 2010 to study the impact of trade costs on the growth of agricultural trade in different regions of China. The results show: ① There are significant regional differences in agricultural trade costs in China, but the differences become tinier. ② Trade costs are show significant negative effects on the growth of agricultural trade in different regions of China, particularly in the Northwest, Southwest and Central China. ③ Trade costs mainly affect bilateral agricultural trade but slightly affect the third parties’ agricultural trade. ④ In the condition that all other factors keep unchanged, the decrease in trade costs contribute to the growth of China’s interregional and foreign agricultural trade which increase by 35.79%and 39.87%, respectively. ⑤ The decline in the costs of foreign agricultural trade is found to expand the agricultural trade deficit, while the decline in the costs of interregional agricultural trade appears to reduce the deficit.

【Keywords】 trade costs; agricultural trade; CGE Model; interregional trade; foreign trade;

【DOI】

【Funds】 the National Natural Science Foundation of China (71403274) the innovation program of Chinese Academy of Agricultural Sciences (CAAS-ASTIP-IAED04-2017) the special project of the Fundamental Research Funds in Central-level Public Welfare Research Institutions (1610052016008)

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(Translated by ZHANG Yan)

    Footnote

    [1]. ①Data source: http://www.moa.gov.cn/ [^Back]

    [2]. ① China is divided into seven regions: North China, Northeast China, East China, Central China, South China, Northwest China and Southwest China. The agricultural trade referred in this paper includes domestic and foreign trading. The volumes of intraregional and interregional agricultural trade in different regions of China mean the trade volumes within the region and between the regions. [^Back]

    [3]. ② The intraregional export and import of agricultural products refer to the agricultural products circulating within the region. Interregional import of agricultural products refers to the inflow of agricultural products from other regions of China, while the export refers to the outflow of agricultural products from the region to other regions of China. The export of foreign agricultural trade in a region of China refers to the outflow of agricultural products from the region to other countries and regions outside mainland China, whereas the import refers to the inflow of agricultural products from other countries and regions outside mainland China to the region. [^Back]

    [4]. ③ The data are summarized from the China 2010 30 Provinces and Municipalities 6 Sectors in Regional Input-output Table. [^Back]

    [5]. ④ Within the framework of microeconomic theory and general equilibrium theory, Anderson and van Wincoop (2003) enriched the theoretical foundation of the gravity model and improved its structure. [^Back]

    [6]. ①Import time is the ratio between the import time of the foreign trade partners and the export time of Chinese exporters. [^Back]

    [7]. ② So far, the data that are officially released and used by scholars and governments include the China 1997 Interregional Input-output Table, 2002 National Social Accounting Matrix (SAM) for China, China 2007 30 Provinces and Municipalities 6 Sectors in Regional Input-output Table and China 2010 30 Provinces and Municipalities 6 Sectors in Regional Input-output Table. [^Back]

    [8]. ①Mainland China, except Tibet, is divided into seven regions: ① North China, which includes Beijing City, Tianjin City, Hebei Province, Shanxi Province and Inner Mongolia Autonomous Region; ② Northeast China, which includes Liaoning Province, Jilin Province and Heilongjiang Province; ③ East China, which includes Shanghai City, Jiangsu Province, Shandong Province, Fujian Province, Zhejiang Province, Anhui Province and Jiangsu Province; ④ Central China, which includes Hubei Province, Hunan Province and Henan Province; ⑤ South China, which includes Guangdong Province, Guangxi Zhuang Autonomous Region and Hainan Province; ⑥ Southwest China, which includes Sichuan Province, Chongqing City, Yunnan Province and Guizhou Province; ⑦ Northwest China, which includes Shaanxi Province, Xinjiang Uygur Autonomous Region, Ningxia Hui Autonomous Region, Qinghai Province and Gansu Province. Other countries and regions in the world means the other countries and regions outside mainland China. [^Back]

    [9]. ① Please refer to Novy (2011) and Xu et al. (2012) for the derivation process. [^Back]

    [10]. ② The trade costs equivalent is also referred to as the tariffs equivalent in some research on foreign trade. [^Back]

    [11]. ③ The 2002 National Social Accounting Matrix (SAM) for China is provided by Dr. Xu Zhaoyuan. The authors thank him very much for his help. [^Back]

    [12]. ④ Data resources: http://g.drcnet.com.cn [^Back]

    [13]. ⑤ Data resources: http://data.worldbank.org.cn [^Back]

    [14]. ① Anderson and van Wincoop (2004) believed that substitution elasticity of the same products from different countries or regions is between five to ten. [^Back]

    [15]. ①The data are not directly calculated from the formula but a simple aggregation of the trade costs in all regions. [^Back]

    [16]. ① Based on the CGE model constructed in this paper, other conditions mainly include income growth, income aggregation and regional preference. [^Back]

    [17]. ①They refer to the ratio between the growth volume of interregional agricultural trade and the volume of interregional agricultural trade and the ratio between the growth volume of foreign agricultural trade and the volume of foreign agricultural trade in Scheme Four. [^Back]

    [18]. ①The data are from China Marine Statistical Yearbook 2013. [^Back]

    [19]. ①The authors can provide the simulation results of the robustness test if required by the readers. [^Back]

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This Article

ISSN:1002-8870

CN: 11-1262/F

Vol , No. 04, Pages 59-74

April 2017

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Article Outline

Abstract

  • 1 Introduction
  • 2 Theoretical basis and data resources
  • 3 Analysis and discussion on the simulation results
  • 4 Conclusions
  • Footnote

    References