Import Variety And Welfare Gain In China

With the increase in the total value of China’s trade, product variety is growing. Product diversification happens in production and consumption.Diversification of output so that producers get trade benefits from export, while diversification of consumption so that consumers obtain earnings from import.In recent decades, with China’s foreign trade policy adjusting, import plays a different role in different period.This paper describes the growth of China’s imports and import variety in 1992-2013,we analyzed from two perspectives:product and market.In the aspect of the imports, this paper describes import from value, product, the stage of production and source, we find that the value of imports in China gradually growth, this growth occurs mainly in raw materials and capital goods, which has a connection with China’s processing trade development, and also shows that China’s trade structure is changing, from the past with the export of resource products and manufactured goods in exchange for equipment imported into the current exports of manufactured goods and imports resources products. From the source, China’s import is relatively concentrated,especially in imports of capital goods. In the aspect of import variety, we find import variety is increasing.which mainly occurs the growth in the number of exporting countries,not the growth in the number of import product. From disappeared variety and new variety.we find the change is gradually decline, indicating that China import variety is steady development. From the origin, source of China’s imports mainly in Asia and the European Union countries, but is leaning to the rich resources of Africa and Latin America.In calculation the gains from variety,we draw Feenstra (1994) and Broad and Weinstein (2006) approach.First, with Feenstra (1994) method, we use national panel data to estimate the elasticity of substitution between imported product varieties. Then, using the estimated elasticity of substitution calculated the gains form variety for China in1992-2013. Finally, in order to grasp the structure of trade gains overall.we decomposed import price index bias from multiple angles The results show that exact aggregate price index has a upward bias in the conventional import price index over this time period was 11.03 percent or 0.5 percentage points per year.the welfare gain of new import variety amounts to 0.4 percent of gross domestic product (GDP).Furthermore, the empirical strategy is extended to investigate specific contributions.and finds that China gains the most from "Crude Petroleum Oils And Oils Obtained From Bituminous Minerals "," Extraction of crude petroleum and natural gas; service activities incidental to oil and gas extraction excluding surveying",and "intermediate goods",but" Trucks-Compression Ignition-Load Exceeding 20 Tonnes"and" Manufacture of motor vehicles, trailers and semi-trailers"played the most negative effect.From the national perspective, trading gain mainly from the "10+3" countries, the EU member states and some countries rich in natural resources, but the top 20 sources of imports contribute the most.which induces geographic concentration.Finally, based on the above analysis, we put forward some Suggestions on the development of Chinese imports.China should take the "safe development" import trade of the road.