Border effect of agricultural trade between China and the Belt and Road countries: a computable general equilibrium model analysis
In: International Food and Agribusiness Management ReviewSearch for other papers by Jingqi Dang in
Current site
Google Scholar
Search for other papers by Yipu Pang in
Current site
Google Scholar
In this paper, we constructed a global trade computable general equilibrium model using the input-output table data in 2002, 2007, 2010, and 2015 to measure the border effect of the bilateral trade of agricultural products between China and the Belt and Road (B&R) countries, and designed a simulation analysis under different scenarios for the impact of the B&R initiative on China’s agricultural trade. We discovered that: (1) The border effect of agricultural product trade between China and the B&R countries decreased by 20.9% in 2015 compared with that in 2010, which means that the B&R initiative to some extent reduced the trade barriers and promoted the bilateral agricultural trade between China and the B&R countries. (2) There are different changes in border effect between China’s domestic regions and between unilateral and bilateral border, the decline of border effect in China’s costal area is larger than that in inland area, and the decline in import border is larger than that in export border. (3) With the improvement of the B&R framework and the implementation of supporting policies, the decline in trade costs and in local agricultural product preference as well as the agricultural technology progress will further reduce the border effect. China’s domestic regional trade gap will gradually narrow, the bilateral agricultural trade will be highly active, and the continuous growth of agricultural trade will emerge between China and the B&R countries.
-
Anderson, J.E. and E. Van Wincoop. 2003. Gravity with gravitas: a solution to the border puzzle. American Economic Review 93(1): 170-192. https://doi.org/10.1257/000282803321455214
-
Anderson, J.E. and E. Van Wincoop. 2004. Trade costs. Journal of Economic Literature 42(3): 691-751. https://doi.org/10.1257/0022051042177649
-
Armington, P. 1969. A theory of demand for products distinguished by place of production. International Monetary Fund Staff Papers 16(1): 159-178. https://doi.org/10.2307/3866403
-
Baier, S.L. and J.H. Bergstrand. 2001. The growth of world trade: tariffs, transport costs, and income similarity. Journal of International Economics 53(1): 1-27. https://doi.org/10.1016/s0022-1996(00)00060-x
-
Balistreri, E.J. and R.H. Hillberry. 2007. Structural estimation and the border puzzle. Journal of International Economics 72(2): 451-463. https://doi.org/10.1016/j.jinteco.2007.01.001
-
Chen, J., B. Abula and T. Chen. 2014. Research on agricultural trade pattern between China and five Central Asian countries. Journal of International Trade (4): 78-89. https://doi.org/10.13510/j.cnki.jit.2014.04.008
-
Chen, R., V. Hartarska and N.L.W. Wilson. 2018. The causal impact of HACCP on seafood imports in the U.S.: an application of difference-in-differences within the gravity model. Food Policy 79: 166-178. https://doi.org/10.1016/j.foodpol.2018.07.003
-
Chinese Academy of Social Science. 2016. Blue book of industrialization: the Belt and Road national industrialization process report. Social Science Academic Press, Beijing, China.
-
Disdier, A. and S. Marette. 2010. The combination of gravity and welfare approaches for evaluating nontariff measures. American Journal of Agricultural Economics 92(3): 713-726. https://doi.org/10.1093/ajae/aaq026
-
Disdier, A., L. Fontagné and M. Mimouni. 2008. The impact of regulations on agricultural trade: evidence from the SPS and TBT agreements. American Journal of Agricultural Economics 90(2): 336-350. https://doi.org/10.1111/j.1467-8276.2007.01127.x
-
Evans, C.L. 2003. The economic significance of national border effects. American Economic Review 93(4): 1291-1312. https://doi.org/10.1257/000282803769206304
-
Evans, C.L. 2006. Border effects and the availability of domestic products abroad. Canadian Journal of Economics 39(1): 211-246. https://doi.org/10.1111/j.0008-4085.2006.00345.x
-
Fan, Z., R. Zhang and X. Liu. 2016. China’s outward FDI efficiency along the Belt and Road. China Agricultural Economic Review 8(3): 455-479. https://doi.org/10.1108/CAER-11-2015-0158
-
Feenstra, R.C. 1998. Integration of trade and disintegration of production in the global economy. Journal of Economic Perspectives 12(4): 31-50. https://doi.org/10.1257/jep.12.4.31
-
Feenstra, R.C. 2002. Border effects and the gravity equation: consistent methods for estimation. Scottish Journal of Political Economy 49(5): 491-506. https://doi.org/10.1111/1467-9485.00244
-
Furtan, W.H. and B.M. Van Melle. 2004. Canada’s agricultural trade in North America: do national borders matter? Review of Agricultural Economics 26(3): 317-331. https://doi.org/10.1111/j.1467-9353.2004.00182.x
-
Gaurav, A. and S.K. Mathur. 2016. Determinants of trade costs and trade growth accounting between India and the European Union during 1995-2010. World Economy 39(9): 1399-1413. https://doi.org/10.1111/twec.12317
-
Gong, T.Y. and W. Wang. 2014. The influence of preference difference on the border effect of China-ASEAN agricultural products trade. Journal of Agrotechnical Economics 6: 110-119. https://doi.org/10.13246/j.cnki.jae.2014.06.013
-
Gong, T.Y., X. Xin and W.Q. Pan. 2012. The impact of trade barriers on China-ASEAN agricultural products trade – based on the measurement and decomposition of border effect. Chinese Rural Economy 2: 64-74.
'The impact of trade barriers on China-ASEAN agricultural products trade – based on the measurement and decomposition of border effect ' () 2 Chinese Rural Economy : 64 -74.
-
Han, Y., X.F. Luo and J.H. Zou. 2015. Trade cooperation competitiveness and complementarities of China and West Asia under the background of silk road economic belt and maritime silk road strategy. World Economy Studies 3: 89-98. https://doi.org/10.13516/j.cnki.wes.2015.03.010
-
He, M., N.N. Zhang and Z.Q. Huang. 2016. Analysis on trade competition and complementarity of agricultural products between China and ‘The Belt and Road’ countries. Issues in Agricultural Economy 11: 51-60. https://doi.org/10.13246/j.cnki.iae.2016.11.006
-
Head, K. and J. Ries. 2001. Increasing returns versus national product differentiation as an explanation for the pattern of US-Canada trade. American Economic Review 91(4): 858-876. https://doi.org/10.1257/aer.91.4.858
-
Helliwell, J.F. and G. Verdier. 2001. Measuring internal trade distances: a new method applied to estimate provincial border effects in Canada. Canadian Journal of Economics 34(4): 1024-1041. https://doi.org/10.1111/0008-4085.00111
-
Henson, S. and R. Loader. 2001. Barriers to agricultural exports from developing countries: the role of sanitary and phytosanitary requirements. World Development 29(1): 85-102. https://doi.org/10.1016/S0305-750X(00)00085-1
-
Hillberry, R.H. 2002. Aggregation bias, compositional change, and the border effect. Canadian Journal of Economics 35(3): 517-530. https://doi.org/10.1111/1540-5982.00143
-
Huang, J., C. Liu and Z.C. Feng. 2018. Dual margin of China’s agricultural products export growth in the Belt and Road region and its determinants. Journal of China Agricultural University 23(12): 187-199. DOI: 10.11841/j.issn.1007-4333.2018.12.22
'Dual margin of China’s agricultural products export growth in the Belt and Road region and its determinants ' () 23 Journal of China Agricultural University : 187 -199.
-
Huang, Y.P. 2016. Understanding China’s belt & road initiative: motivation, framework and assessment. China Economic Review 40: 314-321. https://doi.org/10.1016/j.chieco.2016.07.007
-
Jacks, D.S., C.M. Meissner and D. Novy. 2008. Trade costs, 1870-2000. American Economic Review 98(2): 529-534. https://doi.org/10.1257/aer.98.2.529
-
Jacks, D.S., C.M. Meissner and D. Novy. 2011. Trade booms, trade busts, and trade costs. Journal of International Economics 83(2): 185-201. https://doi.org/10.1016/j.jinteco.2010.10.008
-
Jia, W., T.Y. Gong and F. Qin. 2017. The impact of trade costs on the growth of agricultural trade in different regions of China. Chinese Rural Economy 4: 59-74.
'The impact of trade costs on the growth of agricultural trade in different regions of China ' () 4 Chinese Rural Economy : 59 -74.
-
Lai, M.Y. and J.C. Li. 2007. Tariff reduction and exemption of the agricultural import from Asian and its impact on China’s micro economy and industry – an analysis of the computable general equilibrium model. Contemporary Finance & Economics 269(4): 98-104.
'Tariff reduction and exemption of the agricultural import from Asian and its impact on China’s micro economy and industry – an analysis of the computable general equilibrium model ' () 269 Contemporary Finance & Economics : 98 -104.
-
Liu, X.Y. and X. Xian. 2011. Transportation uncertainty and international trade. Transport Policy 18(1): 156-162. https://doi.org/10.1016/j.tranpol.2010.07.005
-
Liu, X.Y., J. Whalley and X. Xin. 2010. Non-tradable goods and the border effect puzzle. Economic Modelling 27(5): 909-914. https://doi.org/10.1016/j.econmod.2010.05.016
-
Lv, L.L. 2006. Similarity analysis of agricultural products export between China and ASEAN. Word Economy Studies 1: 45-49. https://doi.org/10.13516/j.cnki.wes.2006.01.006
-
Mccallum, J. 1995. National borders matter: Canada-U.S. regional trade patterns. American Economic Review 85(3): 615-623. https://doi.org/10.2753/PET1061-1991380390
-
Obstfeld, M. and K. Rogoff. 2000. The six major puzzles in international macroeconomics: is there a common cause? Nber Macroeconomics Annual 15(1): 339-390. https://doi.org/10.1086/654423
-
Olper, A. and V. Raimondi. 2008. Agricultural market integration in the OECD: a gravity-border effect approach. Food Policy 33: 165-175. https://doi.org/10.1016/j.foodpol.2007.06.003
-
Otsuki, T., J.S. Wilson and M. Sewadeh. 2001a. Saving two in a billion: quantifying the trade effect of European food safety standards on African exports. Food Policy 26: 495-514. https://doi.org/10.1016/S0306-9192(01)00018-5
-
Otsuki, T., J.S. Wilson and M. Sewadeh. 2001b. What price precaution? European harmonization of aflatoxin regulations and African groundnut exports. European Review of Agricultural Economics 28(2): 263-283. https://doi.org/10.1093/erae/28.3.263
-
Qiu, H.G., J. Yang and J.K. Huang. 2007. The impact of the China-ASEAN free trade area on China’s agricultural international trade and its regional development in agriculture. Management World 9: 56-61. https://doi.org/10.19744/j.cnki.11-1235/f.2007.09.007
-
Rong, J. and C. Yang. 2006. An empirical analysis of agricultural products ’competitiveness and complementarities between China and ASEAN countries. Journal of International Trade 8: 66-71. https://doi.org/10.13510/j.cnki.jit.2006.08.009
-
Song, S.S. 2014. Expanding foreign agricultural cooperation under the ‘Belt and Road’ strategy. Journal of International Economics Cooperation 9: 63-66.
'Expanding foreign agricultural cooperation under the ‘Belt and Road’ strategy ' () 9 Journal of International Economics Cooperation : 63 -66.
-
State Information Center. 2005. Multi-regional input-output model for China. Social Science Academic Press, Beijing, China.
-
Sun, C.R., N. Zhang and Y.Y. Liu. 2017. The ‘Belt and Road’ initiative and China’s trade growth with countries along the route. Journal of International Trade 2: 83-96. https://doi.org/10.13510/j.cnki.jit.2017.02.008
-
Sun, Z.L. and X.D. Li. 2013. Agricultural product trade development between China and India upon economic globalization: an empirical analysis based on trade complementarities, trade competitiveness and growth potentiality. Journal of International Trade 12: 68-78. https://doi.org/10.13510/j.cnki.jit.2013.12.007
-
Sun, Z.L. and X.D. Li. 2016. The current situation of agricultural products trade between China and the ‘Belt and Road’ countries and the prospect of agricultural economic and trade cooperation. Intertrade 11: 38-42. https://doi.org/10.14114/j.cnki.itrade.2016.11.010
-
Tan, J.R., X.L. Tong and X.C. Tu. 2016. Analysis of the extensive margins of export growth of 31 Chinese provinces and determining factors. Journal of International Trade 1: 38-49. https://doi.org/10.13510/j.cnki.jit.2016.01.004
-
Whalley, J. and X. Xin. 2009. Home and regional biases and border effects in Armington type models. Economic Modelling 26(2): 309-319. https://doi.org/10.1016/j.econmod.2008.07.013
-
Wilson, J.S. and T. Otsuki. 2004. To spray or not to spray: pesticides, banana exports, and food safety. Food Policy 29: 131-146. https://doi.org/10.1016/j.foodpol.2004.02.003
-
Winchester, N., M. Rau, C. Götz, B. Larue, T. Otsuki, K. Shutes, C. Wieck, H. Burnquist, M.J.P.D. Souza and R.N.D. Faria. 2012. The impact of regulatory heterogeneity on agri-food trade. World Economy 35(8): 973-993. https://doi.org/10.1111/j.1467-9701.2012.01457.x
-
Xu, T.S., Z.M. Li, Y.F. Tu and C.L. Yu. 2012. China’s agricultural product trade cost measurement. Chinese Rural Economy 3: 14-24.
'China’s agricultural product trade cost measurement ' () 3 Chinese Rural Economy : 14 -24.
-
Yang, J., J. Huang, J.J. Hong and W.L. Dong. 2015. Analysis of impacts of trade facilitation on China’s economy. Journal of International Trade 9: 156-166. https://doi.org/10.13510/j.cnki.jit.2015.09.014
-
Yang, X., L.P. Wu and R.L. Xu. 2010. The potential impact of the US-South Korea free trade agreement on China-South Korea agricultural trade. Chinese Rural Economy 7: 12-18.
'The potential impact of the US-South Korea free trade agreement on China-South Korea agricultural trade ' () 7 Chinese Rural Economy : 12 -18.
-
Yao, H.H. 2006. Analysis of the complementarity of agricultural products trade between China and major countries in Northeast Asia. Chinese Rural Economy 9: 81-85.
'Analysis of the complementarity of agricultural products trade between China and major countries in Northeast Asia ' () 9 Chinese Rural Economy : 81 -85.
-
Yi, K.M. 2003. Can vertical specialization explain the growth of world trade? Journal of Political Economy 111(1): 52-102. https://doi.org/10.1086/344805
-
Zhan, M.H. 2018. Research on the competitiveness and complementarities of agricultural product trade of countries along ‘The Belt and Road’: based on social network analysis method. Issues in Agricultural Economy 2: 103-114. https://doi.org/10.13246/j.cnki.iae.2018.02.012
-
Zhang, H.Q. and H.Y. Tang. 2017. A study of trade relationship between China and the areas along the belt and road initiative based on trade intensity index model. International Economics and Trade Research 3: 27-39.
'A study of trade relationship between China and the areas along the belt and road initiative based on trade intensity index model ' () 3 International Economics and Trade Research : 27 -39.
-
Zhang, Y. H. 2009. The Effects of Foreign Demand Shocks on China’s Exports. Economic Theory and Business Management (1): 69-74.
'The Effects of Foreign Demand Shocks on China’s Exports ' () Economic Theory and Business Management : 69 -74.
-
Zhou, S.D., B.C. Hu, Q. Wu and Q.F. Cui. 2006. The establishment of China-ASEAN free trade area dynamic impact analysis of regional agricultural products trade. Management World 10: 14-21. https://doi.org/10.19744/j.cnki.11-1235/f.2006.10.003
Supplementary Materials
| All Time | Past 365 days | Past 30 Days | |
|---|---|---|---|
| Abstract Views | 0 | 0 | 0 |
| Full Text Views | 365 | 152 | 19 |
| PDF Views & Downloads | 252 | 117 | 13 |
Border effect of agricultural trade between China and the Belt and Road countries: a computable general equilibrium model analysis
In: International Food and Agribusiness Management ReviewSearch for other papers by Jingqi Dang in
Current site
Google Scholar
PubMed
Search for other papers by Yipu Pang in
Current site
Google Scholar
PubMed
In this paper, we constructed a global trade computable general equilibrium model using the input-output table data in 2002, 2007, 2010, and 2015 to measure the border effect of the bilateral trade of agricultural products between China and the Belt and Road (B&R) countries, and designed a simulation analysis under different scenarios for the impact of the B&R initiative on China’s agricultural trade. We discovered that: (1) The border effect of agricultural product trade between China and the B&R countries decreased by 20.9% in 2015 compared with that in 2010, which means that the B&R initiative to some extent reduced the trade barriers and promoted the bilateral agricultural trade between China and the B&R countries. (2) There are different changes in border effect between China’s domestic regions and between unilateral and bilateral border, the decline of border effect in China’s costal area is larger than that in inland area, and the decline in import border is larger than that in export border. (3) With the improvement of the B&R framework and the implementation of supporting policies, the decline in trade costs and in local agricultural product preference as well as the agricultural technology progress will further reduce the border effect. China’s domestic regional trade gap will gradually narrow, the bilateral agricultural trade will be highly active, and the continuous growth of agricultural trade will emerge between China and the B&R countries.
| All Time | Past 365 days | Past 30 Days | |
|---|---|---|---|
| Abstract Views | 0 | 0 | 0 |
| Full Text Views | 365 | 152 | 19 |
| PDF Views & Downloads | 252 | 117 | 13 |
