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Intra-Industry Trade in Agri-Food Products between China and the EU

Author: ZhangQing
Tutor: ShaoGuiLan
School: Ocean University of China
Course: International Trade
Keywords: China EU AGRI-FOOD PRODUCTS INTRA-INDUSTRY TRADE
CLC: F752.7
Type: Master's thesis
Year: 2010
Downloads: 256
Quote: 0
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Abstract


There’s a long history between China and the EU’s agri-food products. In the 21st century, especially since China’s accession to the WTO, both sides of the agricultural trade has achieved considerable progress, agricultural trade is presenting significant trend of ascension. In the expanding bilateral trade, intra-industry trade is playing a more and more important role. Researching China and the EU’s agricultural products intra-industry trade, is not only beneficial to make intra-industry trade in agricultural healthy and sustainable, but also to promote the competitiveness of our agri-food products,adjust our agricultural structure.Intra-industry trade refers to in the same industry, there are products or services with relatively strict replacement of the production and/or consumption, they go through external and internal market in different countries and regions of two-way flow. Apply to China and the EU’s agricultural trade, intra-industry trade refers to China and the EU both import and export the same type of agri-food products.The author presents an analysis of the intra-industry nature of agri-food trade between China and the European Union, following that China joined in the WTO in 2001. A slight growth in intra-industry trade (IIT) is indicatedby the Grubel-Lloyd index. However, it is not uniform by product group or EU member state or over time, reflecting different patterns of bilateral integration and an economic restructuring process that is far from complete. Marginal IIT appears to be low, but assumes greater significance when the index is broadened to include vertical as well as horizontal IIT. Accordingly, the structure of the change in agri-food trade between Hungary and the EU during the period is shown to be predominantly either intra-industry of a vertical nature or inter-industry. Both are believed to incur adjustment costs that are higher than with horizontal IIT, but the dominance of vertical IIT suggests that the agri-food industries of China and the EU may be developing in a complementary manner, involving somewhat lower adjustment costs than may have been feared.National economic development level, the national income per head, the market’s scale and structure, the differences of products and consumer preferences, FDI and economies of scale are important influence factors of intra-industry trade by common factors as the thought. According the analysisof regression, in all of the factors, the market’s scale and structure,the national income per head and economies of scale have more significant impact to the IIT between China and the EU and the left factors has less important impact though.China has won trade interests by the agri-food trade with the EU, including expanding the degree of open market, improving consumer welfare, acquiring advanced technology and management experience of agricultural production, avoiding trade protection policies and improving the trade conditions. Otherwise, we have had a lot of loss, like uneven distribution of interests and work, green trade barrier by the out-dated inspection and quarantine. But generally speaking, the advantages far outweigh the disadvantage.In order to promote the agricultural intra-industry trade development,we should ascend competitiveness of our agricultural products, strengthen technical innovation, adjust the agricultural structure,create the own brand of our agriculture products, and improve agricultural investment environment. The above is the emphasis which should be improved and perfect.

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CLC: > Economic > Trade and Economic > States foreign trade > China's foreign trade > Trade relations with other countries
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