A Study On The Economic Effects Of Import Trade Barrier Reduction In China’s Agricultural Products

China’s foreign trade began with silk,tea,bristles and other agricultural products.While China’s reform originated from the institutional innovation of the “big contracting” household contract system in Xiaogang Village.After that,in further opening up,from the opening of coastal,river and border to the establishment of pilot free trade zone,from the unilateral opening of “re-entry the GATT” in 1986 to the bilateral opening of “join the WTO” in 2001,from launching free trade zone construction to building One Belt One Road initiative,from the Canton Fair held in Guangzhou in 1957 to the international import expo hosted in Shanghai in 2018,all of these showed the era mark of Chinese agricultural opening practices.The gradual publications of multiple opening measures and the gradual implements of various trade barriers reduction had made China be one of the most open countries in global agricultural products markets.China is already the world’s largest importer of agricultural products,and its trade deficit becomes more and more normal.At a time when the world is undergoing profound changes unseen in a century,a comprehensive study on the economic effects of cutting trade barriers in China’s agricultural products.This not only can help answer whether agriculture is the prey of China’s entry into the WTO,under the premise of ensuring food safety,but also can provide empirical evidence for further sector-specific,focused and step-by-step cutting trade barriers in China’s agricultural products,and also can provide China’s experience for every country of the world opening up agricultural market.Trade liberalization is a lasting hot topic in international trade field.China’s agriculture actively practiced the idea of free trade,continues to expand the breadth and depth of agricultural opening-up,provide a considerably representative case for studying the economic effects of cutting import trade barrier from the industry level.The trade theory of heterogeneous firm represented by Melitz(2003)and its development provides a theoretical basis and a new explanation channel for accurately master the effect of cutting import trade barrier in agricultural products from the micro product level.Nevertheless,as agriculture is the basic industry of a country,its development can affect food security,social stability,national economy and people’s livelihood.Therefore,no matter in multilateral negotiations of WTO or bilateral negotiations of FTA,every country appears a very prudent attitude to cutting agricultural trade barriers.Especially for China dominated by small-scale farming,actively fulfilling commitments entering into WTO,accelerating implementation of FTA strategy,and continuing unilateral expansion of opening-up,these show that China adheres to balanced,inclusive and win-win open attitude.Consequently,grasping the degree of cutting China’s agricultural trade barriers,clarifying the impact and mechanism of trade barrier reduction on agricultural product import margin,agricultural product productivity,agricultural structure adjustment,farmer income and gap,which are the great practical significance for China to further deepen agricultural supply-side reform and realize rural revitalization.Trying to use the frame of new new trade theory,on the background of cutting agricultural import barriers after China’s entering in WTO,the dissertation studies on the economic effect of cutting agricultural import barriers.The following is the research idea of our paper.First,the dissertation sums up the measurement methods of trade barrier reduction,and its effect on microstructure of export and import and welfare effect.Then,the dissertation adopts the method of theoretical research and empirical test to analyze that trade barrier reductions have effects on import trade margin of agricultural products,to discuss the impact and mechanism of trade barrier reduction on the producer welfare and agricultural structure adjustment,to estimate the impact of trade barrier reduction on consumer welfare and social welfare.Finally,they are conclusions and policy implications.The dissertation contains eight parts as follow:Part one is introduction.This part states research background,significance,main content,structure and framework of the dissertation,introduces the research methods,main innovation points and shortcomings.Part two is literature review.Firstly,it briefly summarizes the measurement methods of trade barrier reduction.Then it summarizes the impact of trade barrier reduction on trade margin,product quality of import and export,duration of trade from the micro level.Finally,it summarizes the impact of trade barrier reduction on producer welfare,consumer welfare and social welfare.Part three is a theory model.Based on Melitz(2003)model,used the analysis framework of S.Demidova and A.Rodriguez-Clare(2009),it divides domestic consumer goods into domestically produced products and imported products,and imposes tariffs on imported products,so as to depicts the impact of trade barrier reduction on the import trade margin,productivity,income and welfare of agricultural products.Part four is the reduction and measurement of China’s agricultural import trade barrier.On the basis of reviewing the import tariff and non-tariff reduction of agricultural products after China’s entering into WTO,it equalizes the non-tariff with the tariff,constructs the trade restriction index at the product level,analyzes the reduction degree of import trade barriers of agricultural products,and compares the differences in the reduction of trade barriers of different agricultural products.Part five is the trade barrier reduction and China’s agricultural import margin.On the basis of knowing the development situation of China’s agricultural trade,it measures extensive margin,price margin and quantity margin of import growth,and empirically analyzes the impact of trade barrier reduction on agricultural import trade margin.Part six is the impact of trade barrier reduction on the producer welfare and agricultural structure adjustment.This part includes three categories.The first is based on the measurement and decompose of agricultural product’s total factor productivity,to empirically test the effects and mechanisms of trade barrier reduction on agricultural product’s total factor productivity.The second is based on analyzing the characteristics of agricultural structure adjustment,to empirically test the effects of trade barrier reduction on agricultural structure adjustment.Last is based on the analysis of China farmers’ income growth,the income gap between urban and rural residents and farmers’ income gap between regions,to empirically test the impact and mechanism of trade barrier reduction on urban and rural income distribution.Part seven is the impact of trade barrier reduction on consumer and social welfare.Firstly,this part evaluates the trade gains of China’s agricultural products import variety growth.Then it estimates the impact of quality change on the import trade welfare.Finally,On the basis of estimating the import demand elasticity of China’s agricultural products,it analyzes the reduction degree of deadweight loss owing to import trade barrier reduction.Part eight is the conclusions and policy implications.This part is to sum up our main conclusions about theoretical and empirical research,and to point out the policy implications of the conclusions.Through those researches above eight parts,the main conclusions of the dissertation are as follows:Firstly,since entering into WTO,China gradually had decreased tariff and non-tariff.From the trade restriction index,China’s overall agricultural trade barriers were cut by 69.48% between 2001 and 2015.And China has become one of the most open markets for agricultural products in the world.Secondly,during the increasing sharply in the agricultural products import,quantity margin plays the biggest role,price margin slowly increases in the fluctuation,and extensive margin attributes the least.The trade barrier reduction significantly promotes the growth of agricultural import by raising the extensive margin,quantity and price margin.Thirdly,the empirical results of DID and quantile DID show that entering into WTO has significantly improved the productivity of agricultural products,even more accelerates the increase of higher productivity industry,and only using tariff reduction exaggerates the promotion effects on productivity.In addition,using mediation effect model to analyze the influence mechanism shows that WTO ultimately improves the productivity level of agricultural products through the improvement of production efficiency,technological progress rate and scale efficiency.Fourthly,the results of using the fixed effect model show that trade barrier reduction decrease the proportion of planting industry,increases the proportion of breeding industry,animal husbandry and forestry.The empirical results of SYS-GMM method show that the trade barrier reduction makes agricultural structure advanced and rationalized.Fifthly,the test results of differential GMM method show that the trade barrier reduction decrease the family operating income,promotes the wage income,and finally reduces the total income of farmers by promoting non-agricultural employments of rural labors.At the same time,it expands urban-rural income gap and farmers’ income gap between regions.Finally,the results of the trade gains from import variety growth show that ignoring them will overestimate the import price index.And they make consumers obtain welfare equivalent to agricultural GDP’s 1.5134% in 2015.Moreover,ignoring import quantity and quality will also overestimate the import price index.The quality change brings the greatest trade gains,the variety growth brings the second greatest trade gains,and the quantity change brings the less trade gains.Meanwhile,it is also found that the proportion of deadweight loss in agricultural GDP is greatly reduced caused by the trade barrier reduction.The trade restriction index is the main cause of deadweight loss before 2007,and the variance of trade restriction index is the main cause of deadweight loss after 2007.According to the above conclusions,we mainly put forward three policy implications.First,we should continue to promote the differentiated policies of the cutting China’s agricultural trade barriers.Second,we will further implement the diversified strategy of import markets and varieties of agricultural products.Third,trade policies and the agricultural industrial policies should be coordinated.