| Research on market integration has aroused widespread interest of scholars in recent years. More and more researchers began to pay attention to the issues of market integration. A well-integrated market is an important means for guaranteeing price stability, and to promote economic growth through price stability. As we all know, China's grain market had been subjected to extensive intervention and price-limiting from government. The current policy is gradually liberalized, but what has to be admitted is that China's market economy is not perfect. The partition of local market is a bit of prominent since the reform and opening up. Thus it has become one of the important objectives of economic transition to establish a unified open market, particularly of the food market, which is in relation to people's livelihood.China is recognized as major grain-producing country. With the development of science and technology, the continuous increase good reserve system of grain played a very good protection to food security in China. Food development report in 2009 pointed that we can meet 95% of self-sufficiency, and need not to rely on grain imports from foreign. However, the food production are uneven. As the constraints of arable land or other, the food production of some areas is insufficient to meet demands of themselves, so they need to import from other regions. In addition, the lack of food reserve in sales areas, the focus of processing equipment to main areas, and the bottleneck of our logistics system have exacerbated the plight of food-scarce areas further. Therefore, changes in food prices of food-rich region must have a significant impact in food prices of scarce areas, and the interaction between these areas can reflect the degree of integration of China's grain market.First, this paper introduces the theories of market-integration and present situation of China's grain market, as well as the test methods used. Second, this paper study the degree of China's grain market integration through the quarter prices of rice, wheat and corn. Then, this paper also discusses features of the price transmission mechanism. In order to demonstrate the relationship of price impact between food markets representatively, it has screened eight provinces for each crop in the study. There are four main areas as source regions of the price transmission mechanism, and four sales arear or balance areas as the price received regions. And every main area constitutes one pair of provinces with corresponding price received regions. Therefore, there're 16 pairs of provinces for each crop. After one-to-one co-integration tests, there're 30 pairs that was presenting co-integration relationship in the all 48 pairs of provinces. But the period of co-integration was different due to different provinces, which may be related to our market imperfections and the impact of agricultural policy. At the same time, the result found that rice market had the highest level of integration degree, followed by corn market, and wheat market had the lowest level. Finally, this paper examined the asymmetry of price transmission mechanism between these markets using the TAR model, that, the increase or decrease of the food price in exporting regions will transmit to importing regions with different speeds, or not. The results showed that despite the existence of asymmetric price transmission mechanism, but it was not common phenomenon, indicating that the level of storage and China's grain policy had both played a certain effect in the price of grain market. |
