The Effects Of China's Grain Consumption On The World Grain Prices.“Great Country Effect”

Since China joined WTO,the scale of the grain trade has been increasing.The international community had a doubt that China's grain import trade impact the grain prices of the international market,which means there is a “great country effect'.This paper analyzes the current situation of China's grain imports of the four major grain types.It was found that since 2000,China's grain production and consumption volumes have different degrees of growth and most obvious is that soybean production and consumption gap has been increasing year by year.Grain imports increased significantly,while exports decreased overall,net import of soybean has also been increasing year by year.In addition,soybean also has a high import dependency and high international market share of import.By analyzing the structure of concentrated import exists each grain variety.In order to verify the relationships among China's grain imports,domestic and international grain prices,this paper constructs VAR model for each grain variety.Through the empirical analysis of the grain imports,the domestic market prices and international market prices,it was found that the imports of four grain varieties have certain relationships with the international market prices.Therefore,excluding ‘Great country effect.From the perspective of market power,this paper selected the relevant data from China and the United States to establish the SMR model,which considered from the scale of imports.Though the model,can study the market power of bilateral trade between two sides.The empirical results show that the buyer market power of China's wheat was 3.35%,the seller market power of US wheat was 0.81%;China's corn buyer market power was 1.66%,the US corn seller market power was 11.99%;China's soybean buyer market power was 5.77%,and the US soybean seller market power was 19.62%.The buyer market power of China's wheat is slightly higher than seller market power of US wheat,but the figures are so small that two sides have no market power.Therefore,the market power of the United States is higher than Cjina's,which can judje that China's grain ipoerts have no “great power effect.To further explain the above conclusions,this paper analyzes five major factors,including production costs,foreign competition,trade policy,import concentration and international speculation.It also proposes appropriate policy recomendations that China needs to reduce production costs,cur down food waste,optimize the structure of import source counries,use futere markets rationally and improve food securitywarning system.