The Impact Of Trade Policy Uncertainty On China’s Agricultural Products Import And Export

The world today is undergoing profound changes unseen in a century,and the uncertainty of the internal and external environment has increased significantly.Since the global financial crisis in 2008,under the influence of multiple factors such as the slowdown in economic growth and the widening gap between the rich and the poor in developed countries,the global trend of anti-globalization has risen,trade protectionism has appeared,and the uncertainty of global trade policy has increased greatly.Agricultural trade is one of the important areas where trade protectionism spreads,and it is also an important bargaining chip in international political and economic negotiations in recent years.Since joining the WTO in 2001,China’s import and export of agricultural products has developed rapidly.At the same time,various trade frictions related to agricultural trade have emerged one after another.The occurrence of trade frictions between countries leads to not only the rise of trade barriers,but also significant increase in the uncertainty of internal and external trade policies,which in turn has an impact on the level of agricultural trade.Based on this,at the time point when China joined the WTO more than 20 years,this thesis summarizes the development process of China’s agricultural product trade and changes in the internal and external trade environment,and then systematically studies the impact of changes in trade policy uncertainty on China’s agricultural product trade.At the same time,considering the important role of agricultural imports in saving domestic scarce resources and ensuring the stable supply of important agricultural products,and the fact that China has become the world’s largest agricultural importer whose agricultural import has far exceeded export,this thesis focus on the import of agricultural products,which not only pays attention to the time-varying characteristics of the impact of China’s trade policy uncertainty on the agricultural import during the period from joining the WTO to the time before the Sino-US economic and trade friction,but also explores the impact of Sino-US economic and trade friction on the import of agricultural products.As for the export of agricultural products,this thesis adopts a new perspective to explore the overall impact of the Sino-US economic and trade friction on the export of agricultural products,which has caused the uncertainty of trade policy to rise.First,the thesis makes a theoretical analysis of the relationship between trade policy uncertainty and trade.Since the research object of the thesis focuses on the agricultural products import,and the theoretical research on trade policy uncertainty and export is relatively abundant,this thesis only constructs a theoretical model of trade policy uncertainty and import,which also makes the expression of this thesis more clear and focused.Specifically,based on the theoretical model of trade policy uncertainty and exports by Handley and Lim(?)o(2017),this thesis uses the heterogeneous firm model and the CES utility function to establish a theoretical model of trade policy uncertainty and imports.Through mathematical derivation,it is found that the increase of trade policy uncertainty will reduce the expected profit of enterprises,delay the import decision,and hinder the technological upgrading,thereby affecting the level of imports.In addition,the mathematical model constructed in this thesis also shows that the critical value of marginal cost under the condition of trade policy uncertainty can be deduced according to the threshold value of the marginal cost of importing enterprises and the actual tariff when the trade policy is determined,and the uncertainty of the trade policy can be further determined.measurement method.The construction of the theoretical model lays a theoretical foundation for measuring the uncertainty of trade policy at the product level and empirically testing the relationship between the trade policy uncertainty and the import of agricultural products.Secondly,this thesis systematically sorts out the development process of agricultural product trade and the adjustment process of agricultural trade policy in the process of China’s agricultural opening to the outside world,especially in the process of 20 years of accession to the WTO.With the continuous improvement of the level of agricultural opening to the outside world,the pattern of China’s agricultural product trade has undergone significant changes,which are embodied in:(1)From the perspective of total volume,the scale of agricultural trade has continued to expand,the pattern of "big import and large export" has been formed,and the trade deficit has continued to increase.(2)From the perspective of trade dependence,after China’s accession to the WTO,China’s agricultural product trade dependence has shown a trend of rising first and then stabilizing,and has basically stabilized at around 21% to22%;(3)From the perspective of trade status,China’s agricultural product trade dependence The trade share has been continuously increased,and the trade status has been significantly improved.China has become the world’s second largest agricultural product importer(region)and sixth largest agricultural product exporter(region)after the EU;(4)From the perspective of product structure,the structure of imported products has been continuously optimized,and land-intensive products and labor Imports of intensive products increased simultaneously.Exports are mainly labor-intensive agricultural products,and aquatic products,vegetables and their products have become the main export agricultural products;(5)From the perspective of trade regional distribution,import channels are diversified,but there is still a problem of high market concentration.The source countries are mainly distributed in developed countries such as Brazil,the United States,Australia,and New Zealand.The export market is mainly concentrated in Asia,and the market concentration first decreased and then remained basically stable;(6)From the perspective of trade mode,the import and export trade of agricultural products is dominated by general trade,and the status of processing trade in the import mode has weakened.China maintains its position as the second largest trade mode.In the process of China’s agricultural opening and continuous opening,China’s agricultural product trade policy has also undergone significant changes,which can be divided into four periods.The annual tariff adjustment period,the third is the full opening period from 2001 to 2017,and the fourth is the Sino-US economic and trade friction period from 2018 to 2019.Among them,the period of Sino-US economic and trade friction is the most obvious period of the rapid increase of China’s trade policy uncertainty.Third,based on the review of the development process and trade policy of China’s agricultural products trade after China’s entry into the WTO,this thesis then explores the time-varying impact of trade policy uncertainty on China’s agricultural imports before the Sino-US economic and trade frictions.This thesis uses the trade policy uncertainty index constructed by Huang and Luk(2020)and the monthly import data of China’s agricultural products to construct a TVP-VAR-SV model to test the impact of changes in China’s trade policy uncertainty on China’s agricultural product imports from the overall national level.The impact of the import volume of various key agricultural products and their time-varying characteristics.The main findings are as follows: First,through the simulation of trade policy uncertainty shocks with different lead times,it can be seen that the short-term and medium-term responses of China’s agricultural imports to trade policy uncertainty shocks are basically consistent in trend,while the long-term responses are basically the same.Basically 0.Changes in trade policy uncertainty mainly impact the import of agricultural products in the short term;second,from the perspective of short-term response,from 2005 to 2010,the impulse response function of agricultural imports to the impact of rising trade policy uncertainty was positive,From 2011 to 2017,the impulse response function became negative;third,through the simulation of trade policy uncertainty shocks at two different time points in November 2008 and July2011,it can be seen that although at different times The impact of trade policy uncertainty on the import of agricultural products is heterogeneous,but it also shows that the short-term response intensity is greater than the mid-term and long-term response intensity;fourth,from the perspective of heterogeneity,grain,cotton,vegetable oil,soybean,sugar and frozen fish,the short-term impulse responses of the import volume of the six types of agricultural products are quite different.Then,this thesis puts the research perspective on the impact of changes in China’s domestic trade policy uncertainty on the import of agricultural products from the United States after the occurrence of Sino-US economic and trade frictions.By analyzing the characteristics of China’s tariff increase on U.S.agricultural products in the process of economic and trade frictions,and using the theoretical model constructed above,this thesis analyzes the worst-case scenario of import revenue(the potential maximum tariff is imposed)and the current situation(after the occurrence of economic and trade frictions,but not tax increases)to measure trade policy uncertainty at the product level during economic and trade frictions.In addition,using the monthly data of China’s imports of agricultural products from the United States(HS4/HS6-digit products)from 2017 to 2019 as a sample,a regression analysis was carried out on the relationship between changes in trade policy uncertainty and import growth rate,and trade policy was analyzed from the sunk cost channel.The impact of uncertainty on the import of agricultural products is examined by a mechanism.The results show that: during the period of economic and trade frictions,the increase of domestic trade policy uncertainty has a significant negative impact on the growth of agricultural imports from the United States,and the negative impact is more serious in the early stage of economic and trade frictions.After controlling for factors such as tariffs,exchange rates,and product-level fixed effects,trade policy uncertainty increased by 0.1 unit,resulting in a decrease in the growth rate of China’s agricultural imports from the United States by 7.28% to 9.41%.Moreover,after adding a series of tests such as monthly fixed effects,tariff and trade policy uncertainty lags,and expanding the sample size,the results remain robust.In terms of loss estimates,the increase in trade policy uncertainty in 2018 reduced the growth rate of China’s agricultural imports from the United States by 14.6% to 18.9%.This thesis also finds that the negative impact of trade policy uncertainty on the import of land-intensive agricultural products is greater than the impact on the import of labor-intensive agricultural products.In addition,from the perspective of the impact on the dual margin,trade policy uncertainty mainly affects the import of agricultural products from the United States by suppressing the growth of the intensive margin.After that,from a new perspective,this thesis systematically examines the overall impact of the Sino-US economic and trade friction on China’s agricultural exports,which has brought about a significant increase in trade policy uncertainty,and also confirms to a certain extent that trade policy uncertainty has a significant impact on China’s agricultural exports.The impact of agricultural exports.This thesis analyzes the impact of China’s agricultural exports in Sino-US economic and trade frictions from the dual perspectives of trade disruption effect and trade diversion effect by establishing a global monthly trade database of agricultural products,using structural gravity model and event research method.The main research findings are as follows:(1)Economic and trade disputes have brought significant trade damage to China’s agricultural exports.Judging from the magnitude of the trade disruption effect,China’s agricultural exports to the United States dropped by 18.7% to 21.7%,with direct losses reaching 1.42 billion to 1.65 billion US dollars.(2)The trade diversion effect of economic and trade disputes on China’s agricultural exports is not statistically significant.This shows that after the outbreak of economic and trade frictions,it is difficult for exports to make up for the losses suffered in the U.S.market by transferring to third-party markets in a short period of time;(3)The loss of labor-intensive agricultural exports has reached 1.6 billion US dollars,accounting for1.5% of the total loss.97%.As China’s largest export of agricultural products,aquatic products suffered the most damage in the economic and trade disputes.Exports to the United States fell by about 23.4%,with a loss value of 720 million US dollars,accounting for more than half of the total export loss.In addition,the export of China’s advantageous agricultural products,such as processed vegetables and fruit juice,was also seriously damaged.In addition,processed products are the only type of agricultural products whose prices have dropped significantly under the impact of economic and trade disputes.Finally,based on the research conclusions of this thesis,policy recommendations are put forward.The possible innovations of this thesis are:(1)Most of the existing literatures take China’s entry into the WTO as an example to explore the impact of trade policy uncertainty on exports.A measure of trade policy uncertainty at the product level when it occurs,and an empirical test of the relationship between trade policy uncertainty and imports.Lim(?)o and Maggi(2015)pointed out that one of the types of trade policy uncertainty is about major protectionist events such as trade wars,but the low frequency of such events makes empirical research difficult.The research in this thesis complements the research on trade protectionist trade policy uncertainty,and provides a new idea for measuring product-level trade policy uncertainty when economic and trade frictions occur between countries.At the same time,paying attention to the import effect of trade policy uncertainty during the economic and trade friction period,rather than focusing on the tariff effect,will help to assess the losses caused by the economic and trade friction on imports in a more comprehensive way;(2)Unlike Zhou Yong(2021)explore the impact of external trade policy uncertainty on the import of agricultural products with the help of China’s entry into the WTO.This thesis focuses on the impact of changes in China’s domestic trade policy uncertainty on the import of agricultural products.The significance of the research is as follows: On the one hand,in today’s highly uncertain international environment,it is an indisputable fact that the uncertainty of internal and external trade policies is transmitted to each other.For imports,changes in internal trade policy uncertainty are relatively more immediate shocks.On the other hand,agricultural products play an important role in Sino-US economic and trade frictions,which are not only related to the national economy and people’s livelihood,but also have strategic significance.As a result,trade policies for agricultural products have changed greatly with bilateral relations and are more vulnerable to trade policy uncertainty.shock.To sum up,the impact of internal trade policy uncertainty on the import of agricultural products during economic and trade frictions cannot be ignored;(3)At present,the theoretical model of trade policy uncertainty on exports is relatively well-developed,while the theory on trade policy uncertainty and imports is relatively complete.relatively insufficient.This thesis attempts to build a mathematical model of trade policy uncertainty and imports by taking advantage of the conditions of import with sunk costs and tariff policy transition matrix,which not only enriches the related research on trade policy uncertainty and import theory,but also provides theoretical support for empirical research of this thesis.