Regional Disparities In China's Commodity Trading Market And Influencing Factors

Commodity trading market, which has its roots in the past as fair trade activities,mainly includes agricultural products market, industrial consumables market and capitalgoods market. As a new organizational form of commodity circulation, it grows along withChina’s socialist market economy construction. Since it came into being, it has beenplaying a positive role in improving commodity circulation, facilitating our life, expandingemployment opportunities and promoting national economic development. Thus, acomprehensive and clear understanding in the internal difference of commodity tradingmarkets and its impact factors is not only helpful to figure out its development trajectoryand general characteristics, but also meaningful to take some countermeasures to promotethe development of commodity trading market in our country.Based on the transaction cost theory, this paper describes the general and currentsituation of commodity trading market. The regional disparities are common amongnational regions, among three areas of the East, Middle and West, and among five regionsclassified by cluster analysis. In order to elaborate these regional differences, some analysismethods such as range, mean, coefficient of variation, Theil index and Theil indexdecomposition are used from the two aspects of the absolute and relative difference. Thenthis paper conducts the panel data models to analyze the influencing factors of merchandisetrading market of the nationwide region and three areas. Some conclusions are drawn asfollows:Firstly, from the national level the absolute difference of commodity trading market inChina is increasing. The relative difference comes to a decrease after an increase at thebeginning, and finally maintains stable.Secondly, from the perspective of three regions, the market of western area is theworst and has a great volatility while the markets of middle and eastern region show arelatively stable development. It is indicated by the data from2000to2010that theinter-regional disparity dominates in the difference of these three areas. By2012, theinner-regional difference is generally equaled that of inter-regional disparity, indicating thatthere is a shrinking trend in regional difference of trading market.Thirdly, from the aspects of five areas classified by cluster analysis, the regionaldifference of the first area, which market develops the best, is gradually reduced. Thedifference of the second area increase at first and then decline. For the third, fourth andfifth areas, the disparities of trading market all appear to be increasing. For these fiveregions, the inter-regional disparity is more significant than inner-regional disparity, but it is gradually decreasing.Last but not least, through the panel data model, the major factors affecting thecommodities trading market are found to include urbanization rate, total export-importvolume, freight turnover and government fiscal expenditure, all of which show a positivecontribution. But these factors’ effects differ among three areas of eastern, middle andwestern China. In detail, the urbanization rate, total export-import volume and freightturnover play relatively significant roles in the East. Total export-import volume’spromotion is the most obvious in the middle area. Government fiscal expenditure,urbanization rate and freight turnover are observed to have greatest impact on commoditytrading market in the western region.Finally, based on factors derived from empirical analysis, some countermeasures. oncommodity market’s development are put forward.