Transformation Of The Regime And Non-linear Transmission Of Price In China's Swine Industry Chain

Pork is the main choice of meat consumption for urban and rural residents in China and plays an important role in improving national health.However,the swineindustry has always been characterized by large price fluctuations.During the period of sharp price decline,farmers cannot obtain enough profits;when the price rises too fast,citizens' reasonable demand for pork cannot be effectively satisfied.The sharp rise in pork prices in recent years has even led to a rapid increase in CPI,which has continued to import inflation into the national economy,resulting in further deterioration in the economy.Therefore,an in-depth study of the characteristics of regime transformation in swine industry and the asymmetry of price transmission between market entities in each link is of great significance for promoting the healthy development of the pork market and maintaining the stability of the national economy.Based on an exhaustive literature review of relevant research in the swine industry,this article uses a combination of Markov Switching model(MS)and VAR model to construct a theoretical model suitable for this study,and uses monthly pork price data over a 13-year period(September 2006-March 2019).Based on the results of data analysis,the reasons for the regime transformation of the swine industry and the asymmetric price transmission were analyzed,and appropriate policy recommendations are put forward.According to the analysis of the time series characteristics of the price level of each link in the hog industry,this article divides the swine market into three main regimes,namely "falling regime","stable regime" and "rising regime".At the same time,the results of preliminary data analysis found that the swineindustry followed a 2 order lagged VAR model.The research results show that there are large differences in the stability of the three regime systems.Among them,the stability of the "stable regime" is strong,followed by the "rising regime",and the "falling regime" has the worst stability;further research found that under different regional systems,the upstream and downstream of the swine industry chain showed different responses to price changes in other links.The response of "rising regime" is the strongest,and the"stable regime" is more moderate,the "falling regime" responded weakest to price fluctuations in other links.Due to the asymmetric price transmission characteristics of the upstream and downstream price transmission of China's swine industry,industry regulators and policy makers should establish a price fluctuation early warning mechanism based on the entire industry chain,and establish a major epidemic,natural disaster early warning and control mechanism,At the appropriate time,the necessary financial subsidies should be provided to farmers,and the comprehensive and healthy fiscal and regulatory policies and prevention and control policies should be used to ensure the healthy and stable development of the pig industry and ensure that the pork demands of citizens can be safely guaranteed.