What determines China's grain imports and self‐sufficiency? The role of rising domestic costs and varying world market prices
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What determines China's grain imports and self‐sufficiency? The role of rising domestic costs and varying world market prices. / Yu, Wusheng; Li, Tianxiang; Zhu, Jing.
In: China and World Economy, Vol. 27, No. 5, 2019, p. 1-24.Research output: Contribution to journal › Journal article › Research › peer-review
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TY - JOUR
T1 - What determines China's grain imports and self‐sufficiency? The role of rising domestic costs and varying world market prices
AU - Yu, Wusheng
AU - Li, Tianxiang
AU - Zhu, Jing
PY - 2019
Y1 - 2019
N2 - China's grain sectors have faced unprecedented challenges in recent years as the ever‐increasing and historically high level of grain output has failed to reduce grain imports. On the contrary, high grain imports and high domestic stock have accompanied historically high domestic output, a situation dubbed the “triple high” phenomenon in current policy discussion. This paper explores the role of widening domestic–world market price gaps in determining the triple high phenomenon. Unlike earlier studies that relied on production capacities, this paper argues that domestic production and demand (hence imports) are functions of domestic and world market prices and proposes an analytical framework to explicitly capture such price gaps under restricted trade linkages in general equilibrium. Following this approach, a set of price scenarios for the 2011–2020 period are constructed and simulated in a computable general equilibrium model. Results from the core scenarios, in which recent domestic and world market price trends are assumed to continue, suggest that further widening price gaps would substantially increase grain imports and reduce domestic output (by 60 million tons) and self‐sufficiency ratios from base levels. In the alternative scenarios with larger (smaller) price gaps, we find higher (lower) imports and larger (smaller) decreases in domestic output and self‐sufficiency ratios. Such results provide important policy implications as China's agricultural policy undergoes significant adjustment.
AB - China's grain sectors have faced unprecedented challenges in recent years as the ever‐increasing and historically high level of grain output has failed to reduce grain imports. On the contrary, high grain imports and high domestic stock have accompanied historically high domestic output, a situation dubbed the “triple high” phenomenon in current policy discussion. This paper explores the role of widening domestic–world market price gaps in determining the triple high phenomenon. Unlike earlier studies that relied on production capacities, this paper argues that domestic production and demand (hence imports) are functions of domestic and world market prices and proposes an analytical framework to explicitly capture such price gaps under restricted trade linkages in general equilibrium. Following this approach, a set of price scenarios for the 2011–2020 period are constructed and simulated in a computable general equilibrium model. Results from the core scenarios, in which recent domestic and world market price trends are assumed to continue, suggest that further widening price gaps would substantially increase grain imports and reduce domestic output (by 60 million tons) and self‐sufficiency ratios from base levels. In the alternative scenarios with larger (smaller) price gaps, we find higher (lower) imports and larger (smaller) decreases in domestic output and self‐sufficiency ratios. Such results provide important policy implications as China's agricultural policy undergoes significant adjustment.
U2 - 10.1111/cwe.12299
DO - 10.1111/cwe.12299
M3 - Journal article
VL - 27
SP - 1
EP - 24
JO - China and World Economy
JF - China and World Economy
SN - 1671-2234
IS - 5
ER -
ID: 227866889