Analysis On Terms Of Sino-US Agricultural Trade

The development of agriculture is a matter of the utmost concern in China, because it relates with food security and the development of national economy. International trade of agricultural products plays an important role in each country nowadays. In 2010, The imports and exports of agricultural products amounted to 121.96 billion from the USA. with an increase of 32.2%, but recorded a trade of deficit of 23.14 billion. Among all the countries, The USA is the most important destination for our agriculture imports and exports. In 2009, China imported 14.029 billion dollars agricultural products from the United States, with a highest share of 25%, but unfavorable trade balance standing at 9 billion dollars. America has always been an important trading partner of China. Though the volume of trade between us has been increasing, the deficits of agricultural products trade expanded. Sino-US agricultural trade draws recently more and more attention.Terms of trade is a measure of the efficiency of international trade, a indicator to be used to examine the quantity of import unit for unit export. The terms of Sino-US agricultural trade are made as the object of study to understand the structure of agricultural trade, to promote agricultural development and enhance the efficiency of foreign trade of agricultural products, improve trade conditions. This paper describes the current situation of Sino-US trade in agricultural products; and then based on raw data calculating the agricultural products price index to get terms of trade. All indicators make 2001 as base year to compare and analysis. The paper makes a thorough statistical analysis with graphs and charts. Next, the article analyzes factors affecting the terms of trade, such as economic growth, exchange rates, consumer spending and production price indices. Then several indicators are chosen to make model. Before making VAR model, some tests should be taken such as the ADF test and cointegration test. The Granger causality test also be taken to analyze relationship between series . Based on the empirical analysis, a number of suggestions came up to improve the terms of our agricultural trade.