Study On The Influence Of Trade Liberalization On China's Horticultural Industry

China's horticultural industry has developed rapidly since the1990s. Horticultural industry plays an important role in China's agricultural economy, which helps to adjust the agriculture structure, increase farmers' income, improve the structure of agricultural exports and make up the agricultural trade deficit. China has performed all commitments of accession to WTO by2010and become one of the most open countries in the world. The effect of accessing to WTO and participating in regional liberalization appears gradually in every agricultural industry. What is the effect of trade liberalization on China's horticultural industry? It is the core of this study.Based on the theory of trade liberalization, this paper combines the post-analysis with prediction to do empirical research on the impact of trade liberalization on China's horticultural industry. On one hand, using the panel data regression models it analyzes the impact of reforms since China's accession to WTO on horticultural trade between China and its main trade partners. On the other hand, it predicts the impact of future regional and global trade liberalization reforms on China's horticultural industry with the Global Trade Analysis Project. At last, this paper supports some suggestions for China's horticultural industry development.Two contribution and innovative points in this paper are as follows:(1) Based on the combination of theoretical analysis with empirical analysis, and post-analysis with prediction, it constructs a general research framework of analysis of the impact of trade liberalization on China's horticultural industry, including the existing regional trade liberalization, regional trade liberalization that might be reached in future and the new round of multilateral trade negotiations.(2) It expands the traditional analytical tools, such as constructing a pooled-cross-section model with variable coefficient and a motive difference fixed effect model, expanding trade effect analysis, separating horticultural products using Splitcom and updating benchmark scheme to analyze the stack impact.The core contents and conclusions of this paper are as follows:After defining the concept and scope of horticultural products, this paper firstly analyzes the production and trade situations of Chinese horticultural industry, and reviewes the course of the horticultural industry after the accession to WTO. Data shows that China's horticultural import and export developed rapidly since WTO entry. Whether trade liberalization reforms play an important role in promoting trade of horticultural products? This paper built a mixed-sectional model with variable coefficients to analyze the impact of performing WTO commitments and free trade agreements on China's horticultural trade. It found that trade liberalization reforms played a significant role in promoting the growth of the import and export of various horticultural products, in which the facilitation effect on the exports of flowers, vegetables and tea were stronger than imports. However, promotion effect on import of fruit was larger than export. Preferential trade agreements (PTAs) made great contribution to promote the development of international trade liberalization in the past20years. As the number of China's PTAs is growing, this paper further constructs a motive difference fixed effect model from the point of endogenous of trade policy to analyze the impact of PTAs on China's horticultural import and export. The empirical results show that PTAs promoted China's horticultural import and export at the same time, and the improvement effect of import was greater than export. The promoting function of PTAs had not yet fully realized by2010. Subsequently, it predicts the impact of existing free trade agreements on China's horticulture industry in2015. Results show that production of flowers, vegetables and tea will increase obviously, but the fruit production will shrink in some degree. Most horticultural products'import price will fall, so a part of domestic market will be occupied by foreign products. All the vegetables, flowers and tea replaced in the domestic market will be diverted to foreign market, but only a small part of fruits replaced can be exported to other countries. China's trade surplus of vegetables, tea and processed horticultural products will increase, while the surplus of fruits and flowers will decrease. Overall, China's horticultural trade surplus will rise.China is actively participating in regional and global trade negotiations. In addition to the nine PTAs signed, there are six PTAs in negotiation and three PTAs are in being considered. China has a close relationship with the PTAs members being considered. The results of GTAP simulation for future regional trade liberalization show that, all PTAs including China-India, China-Korea and China-Korea-Japan will promote the output of China's horticulture, and the improvement effect of import is greater than export. The trade surplus of horticultural products between China and India, Korea and Japan will further rise.Doha Round is the first multilateral trade negotiation with China's participation after its accession to WTO. As a representative of developing countries, China plays an important role in negotiations. While the negotiations in Doha Round have not yet been completed, the agricultural negotiating group has released several revised modalities. This paper collects the latest achievements of agricultural negotiation in Doha round and simulates the effect of agricultural modalities on China's horticultural industry. Results show that all prices in domestic market and import and export trade will fall after the implementation of Doha agricultural modalities, the falling extent of import price is larger than export. The output of various horticultural products will increase obviously, among which the processed horticultural products have the largest increase, followed by vegetables, flowers, fruits and tea. Besides, the growth of demand for import products is significantly higher than national products. Both the scale of import and export will enlarge, and export's growth is greater than import. The welfare and terms of trade will be enhanced, but the benefit is smaller than other countries.