Study On The Comparative Advantage Dynamic Of China's Agricultural Products Trade

Under the guidance of liberal economic ideas, the globalization of economic activities is deepening, and the economic system all over the world has been converging gradually. The rapid development of modern science and technology also provides a powerful material support for the operation of economic system at the same time. In this context, the internationalization trend of the world agricultural development is irreversible. Since the reform and opening up, China's agriculture began to integrate into the international system, WTO accession is a major step forward on the path of internationalization. In the process of the internationalization of agriculture, the depth and breadth of China's agriculture opening up increase gradually, confronting with both the opportunities of full use of domestic and international resources and the pressures and challenges from the world market. Nowadays, the pattern of agricultural products trade has undergone a significant change:the scale expansion of agricultural products trade, rapid growth in imports while slow growth in exports, widening agricultural trade deficit, high market concentration and product concentration of agricultural products exports, and exports hindered by stringent access standards and trade barriers. For these, it is not optimistic about the agricultural trade situation.The transformation of comparative advantages of agricultural products is the impetus of change in the pattern of agricultural products trade. Since the reform and opening up, most of China's agricultural products have lost their comparative advantage and most comparative advantages belong to labor-intensive agricultural products. Aquatic products, horticultural products, and some of the livestock products are the only agricultural products with comparative advantage. Moreover, China does not have the advantage of the natural resource endowment for the agricultural production, with agricultural production costs sustainably increasing and slow productivity growth, which makes considerable difficulty in improving comparative advantage of agricultural products. The situation of agricultural trade is related to the market position of Chinese agricultural internationalization, and is an important force to promote agricultural economic growth. Not only that, comparative advantage is fundamental basis of agricultural products trade (in particular, the development of export trade).Therefore, it is significant to dig into comparative advantage of agricultural products and then make accurate profound understanding.Comparative advantage is the focus of academic research and the important issue of government concern. Although modern international trade phenomenon becomes increasingly complex with development of international trade theory in more perspective, comparative advantage is the eternal topic of ongoing research. Especially for agricultural trade, comparative advantage theory has stronger explanatory power and better guiding role. Based on the times background of reform and opening up, this doctoral dissertation studies the comparative advantage dynamic of agricultural products for nearly30years, from1978, significant year for China's economic transformation. Core issues of this research are "exploring the internal law, reason and tendency of comparative advantage changes of agricultural products" and "how to cultivate and improve the comparative advantage of agricultural products?" Taking principles of economics, international trade theory, institutional economics, product space theory as the theoretical basis and ideological guidance and using a variety of econometric methods, this empirical research is carried out.On the basis of previous research, this dissertation tries to innovatively explore from following aspects:Firstly, Employing NRCA index, this dissertation carries out a comprehensive study on comparative advantage dynamic of agricultural products since reform and opening up, highlighting integrated features of comparative advantage in this background, providing a scientific support for improving the accuracy of predication on comparative advantage changes and ensuring the reliability of conclusions.Secondly, introducing the institutional factor, this study verifies the influence of the institutional quality on comparative advantage changes of agricultural products from the forefront of trade theory, which not only breaks through the traditional research perspective, enriching the existing the research visual field of comparative advantage of agricultural products, but also provides a experience proof of the relationship between institution and comparative advantage of agricultural products from non-institutional-intensive products, playing the role of proving the forefront theory complementally.Thirdly, Constructing high-dimensional panel data of "the country-the product-time", this dissertation introduces the product space theory to the study of comparative advantage dynamic of agricultural products for the first time, verifying the decisive role of the spatial structure transformation of agricultural products for comparative advantage, and then discussing how to choose the cultivation target of comparative advantage of agricultural products, to some extent, which offsets the shortage of domestic research and plays the role of enriching the existing papers.This article analyzes the comparative advantage of agricultural products from four aspects:dynamic facts investigated, influencing factors, changes trend forecasting, and decision-making ideas.In order to make a thorough study of agricultural products of comparative advantage dynamic since reform and opening up, this paper selects the latest NRCA index and hierarchically evaluates comparative advantage of all the agricultural products in accordance with the SITC code classification. This study analyzes comparative advantage changes trend, stage and distribution change of the whole and classified agricultural products in1978-2010, assessing its stability through regression analysis and unit root tests. Compared to the comparative advantage of agricultural products during early period of accession to the WTO, this dissertation objectively determines the status of current comparative advantage of agricultural products. The results show that:overall, only food and live animals have comparative advantages; in terms of product attributes, aquatic products, horticultural products and non-edible animal products have comparative advantages; according to species, the number of dominant species and inferior varieties are similar each year but with different distribution; the stable period of comparative advantage of China's agricultural products is about six years, while major agricultural categories with obvious stages; most of the changes in agricultural comparative advantage are not smooth; there is no fundamental change in comparative advantage pattern of agricultural products for10years after accession to the WTO, with continuation of the early trend.In order to thoroughly investigate influencing factors of comparative advantage changes of agricultural products, this dissertation applies the principle of traditional comparative advantage and cutting-edge theory to analyze in view of the factor endowments, macroeconomic policy and institutional factors. First of all, this study tests the impact of resource endowments of land and labor on comparative advantage based on the inter-provincial panel data, at the same time discussing the indirect effects of effective irrigation, fertilizer inputs and agricultural inputs on comparative advantage; then the purchasing power parity ratio is used to quantify macroeconomic policy with export-oriented strategy, with the standard time series cointegration tests, this paper analyzes long-term equilibrium relationship with comparative advantage; finally, this article analyzes the effect of institutional factors on comparative advantage of agricultural products with the degree of economic freedom for evaluation from the perspective of institutional quality, adopting the multinational panel data to conduct a general inspection and analyzing the Chinese case with cointegration test of a structural break time series. The results are as follows. First, land resource endowment has a significant positive impact on comparative advantage changes of agricultural products, while the income of agricultural labor has a significant negative impact on agricultural comparative advantages, effective irrigation, fertilizer inputs and agricultural inputs indirectly affect comparative advantage of agricultural products through replacing land and labor elements, which means that the progress of agricultural technology and capital inputs can change the endowment of land and labor resources and indirectly affect comparative advantage of agricultural products; second, there is long-term stability positive equilibrium relationship between export-oriented strategy and agricultural comparative advantage changes, so macroeconomic policies have an impact on comparative advantage of agricultural products; from a global point of view, the institutional quality has a significant positive impact on comparative advantage changes of agricultural products, as to the actual situation in China, there is long-term stable equilibrium relationship between the institutional quality and comparative advantage of agricultural products, although the specific relationship changed before and after2003, so institutional factors have an impact on comparative advantage of agricultural products and the efficient institutional arrangements can promote and enhance comparative advantages of agricultural products.In order to try to predict the future trend of comparative advantage changes of agricultural products, this paper uses Markov chain of an independent random process to study comparative advantage changes of the overall and all kinds of agricultural products, and further predict the change state in the next five years. The results show that:in terms of entirety or categories, the stability of China's agricultural comparative advantage is strong, and the mobility is weak; the mobility is expected to enhance after five years, the disadvantage of inferior agricultural products is weakening and gradually inferior products becomes competitive, and competitive agricultural products continue to show robust stability.In order to accurately explore the effective measures to cultivate and improve the comparative advantage of agricultural products, the paper introduces the product space structure of theoretical ideas in the first place, and build the country-the product-time high-dimensional panel data to test the applicability of analyzing comparative advantage of agricultural products, and then as a basis, discussing the target selection to cultivate the comparative advantage. The results show that different agricultural production inputs ultimately determine the uneven shape of the spatial distribution of agricultural products, which has important impact on comparative advantage change for agricultural products. Comparative advantage is more easily achieved if the variety is more close to agricultural products set with existing comparative advantage. Following this rule, this study estimates the density of agricultural products, the best choice of the cultivating comparative advantage of agricultural products is followed by the density values from largest to smallest. On the basis of full-text research, this dissertation proposes several feasible policy recommendations to improve the current status of several of agricultural products of comparative advantage, such as implementation of induced technological changes, continuing to deepen reform and strengthening export trade development, multi-pronged approaches to cultivate comparative advantage of agricultural products, and improving the institutional environment and increasing the efficiency of institutional arrangement.