Agricultural trade of China under the 'New Normal' economy: How to deal with threat of rapidly growing agricultural products' import

Shen, J.

Agricultural trade of China under the 'New Normal' economy: How to deal with threat of rapidly growing agricultural products' import

2017

Shen, J.

In this paper, we first investigated change in agricultural trade, with a particular focus in the change of imports in China since the 1990's, by using statistical data from FAOSTAT and Chinese government. We then analyzed the fundamental economic background, and the influence of agricultural policy such as trade and domestic agricultural support policy. Followings were elucidated by our research: Traditionally, China was a self-sufficient country for agricultural products. However, due to liberalizing soybean imports in 1996, and two times of significant tariff reduction on vegetable oil and cotton in 2002 following WTO accession, and again in 2005, imports of soybean, vegetable oil and cotton began to increase rapidly, while imports of other agricultural products did not increase so much then. Nevertheless, after the 2008 Beijing Olympic Games, importation of almost all agricultural products began to show rapid increases. Four factors can be considered as the reasons of this change. The first factor is the sharp increased cost of the domestic agricultural production, mainly caused by rapid increase of labor and land cost; The second factor is the appreciation of RMB exchange rate; The third factor is the tariff rate determined at the time of WTO accession can no longer provide a sufficient border protection to many agricultural products; The last factor is that the government's price support policy since 2008 did not only fail to enhance the international competitiveness of domestic agricultural products, but may also give them fully counter effects.

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