An Empirical Study On The Contribution Of China's Foreign Trade Of Agricultural Products To The Growth Of Agricultural Economy

Economists initiated some theories and a lot of empirical testing approaches and theoretical models analyzing relations between trade and economic growth which functioned as the theoretical foundation of an array of theoretical researches on and empirical studies of relations between trade of agricultural products and growth of agricultural economy. All of those theories, for instance theory which argues that foreign trade is the engine of economic growth and theory which holds that importing low-price agricultural products enhances development of industry and thus helps upgrade a nation's industrial structure, obviously reveal the internal interaction between trade of agricultural products and growth of agricultural economy. The two widespread empirical testing approaches, Balasssa's model (1978, Export augmented aggregate production function) and Feder's model (1982, Externality effects model), have their respective advantages: Balasssa's model tests the contribution to economic growth made by exports while Feder's model emphasizes the externality effects on non-exports sectors played by exports sector.Some features have been discovered through a simple statistical analysis on China's trade of agricultural products and growth of agricultural economy from 1981 to 2002. A further empirical study based on the above models shows that in China, contribution of exports ofagricultural products to growth of agricultural economy was 23.11%, that contribution of imports of agricultural products was about 10%, and taking the aggregate trade into consideration the contribution was approximately 14%. Those figures strongly suggest that China's trade of agricultural products has played an enhancive function to promote growth of its agricultural economy through externality effects on other sectors.Policies are suggested based on the above conclusions. It's necessary to abandon the traditional doctrines that trade of agricultural products performs only as approaches of balancing surplus and shortages of domestic agricultural production and that it emphasizes only on increasing earnings of foreign exchanges.On the contrary, it should be clearly aware that, on one hand, exports of labor intensive agricultural products such as aquatic products should be expanded. At the same time, input into agricultural research sectors and farmers training programs should also be increased so as to improve the technological level of products to tackle the challenges of technological barriers to trade (TBT). On the other hand, focusing on agricultural products imports, some actions should also be taken to help gradually transfer productive factors from the low efficiency sectors to those of high efficiency while increasing imports of low-price agricultural products based on the nation's food security. In line with rational development of agricultural products trade production efficiency of the whole agriculturalsector will be enhanced so as to reinforce the growth of agricultural economy.