The Agricultural Trade Relations Between China And Potential Free Trade Partners With The Trend Of Free Trade Area

Regional (bilateral) trade agreement is the most popular trend in the current world multilateral trading system, which has been proved irreversible. In the process of making regional trade agreements, the negotiation on agricultural products is critical and sensitive. China is one of the most important nations on agricultural products trading in the world market. Compared to other countries, China's regional economic cooperation start relatively late, but it develops rapidly in recent years.In order to accurately grabing the opportunities for China's agricultural products in the potential market of other countries, making a deep understanding about agricultural trade patterns as well as the driving force between China and its potential trade partners, and avoiding negative impacts of a bilateral free trade agreement to China's agricultural development, this paper makes an intensive study in the field of agricultural products trade between China and its potential FTA (Free Trade Agreement) partners, including Australia, Brazil, India, Japan and South Korea. The paper analyzes the features of production location, competition and complementarity of these countries in the world market, and then indicates what benefit or loss China will gain by free trade agreement. The conclusions are as follows:With the range of regional trade agreements constantly expanding, many literatures have researched the feasibility to establishing a national or regional free trade zone. From the view of methods, they mainly use the descriptive statistics to estimate bilateral trade patterns, involving the comparative advantage index, intra-industry trade indices, trade concentration index and the trade complementarity index. In this paper, it makes a critical analysis about the advantages and disadvantages of these methods listed above, which would be helpful to Chinese scholars in the future study.Australia has become one of the most important countries-where China imports plenty of agricultural products every year. Meanwhile, it cannot be ignored that Australia's demand for Chinese agricultural products is also sharply increasing. Generally speaking, the agricultural trade between China and Australia is developing rapidly but unstable, the intra-industry trade is also trapped in a low level. However, it has been proved that agricultural trade between the two countries is strongly complementary. China and Australian bilateral trade in agricultural products has great potential to improve, though this enhancement may be in an imbalanced way.Agricultural products trade between Sino-India and Sino-Brazil are not only totally different, but also has many similarities. First, agricultural trades between China and these two countries are all on the basis of their own factor endowment; China mainly exports labor-intensive agricultural products, while these two countries mainly export land-intensive agricultural products. Second, agricultural trade between China, Brazil and India are mainly inter-industry trade. The complementarity of agricultural products export from Brazil and India to China is significantly stronger than that from China to Brazil and India. However, some points distinguish Sino-Brazil trade from Sino-India trade. Although both of two trades place China in a condition of huge deficit that is still increasing, the bilateral trade between China and India is more instable and imbalanced than that between China and Brazi.Import demand effect is always showed as the dominant power to increase China's agricultural products export to Japan and Korea. Since China entered WTO, the competitiveness of exportation has played a significant role in improving China's export of agricultural products to Japan and Korea. Compared to Sino-Japan export, China's export of agricultural products to Korea is more sensitive to the change of import demand effect influenced by economic environment. Once the import demand effect changes, the trade would be caused to a direct volatility. Moreover, the export structure effect is the major factor to constrain the growth of export from China to Japan and Korea. Import demand effect is the major factor to improve Japan's agricultural products export to China. However, Japan's agricultural products of lacking competitiveness and the irrational structure of exportation are two restrictions on the growth of its trade with China. As time goes on, Korea has transformed its dominance from the competitive effect to the import demand effect in Sino-Korea trade of agricultural products.