Dissertation > Economic > Fiscal, monetary > Finance, banking > China's financial,banking > Exchange rate,foreign financial relations

The Study on Trade Effects of China’s Agricultural FDI

Author ZhangCaiXia
Tutor TaoJianPing
School Huazhong Agricultural University
Course Trade in agriculture and rural financial management
Keywords FDI Agriculture Trade Structure Trade Effect
CLC F832.6
Type PhD thesis
Year 2010
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The world economic integration further strengthens the inter contact between trade and investment. The agriculture internalization, as the direct reflection of the world economic integration in agriculture field. With the wave of agriculture internalization, the opening degree of the Chinese market is gradually increasing, and the production and trade of agriculture is further incorporated in the global agricultural system. As the most important economic activities of opening to outside world in the agriculture field, the performance of the foreign trade of agricultural products and the agricultural FDI of China is extremely vigorous. Since joining the WTO, agricultural product trade of China has been developing very quickly, and both of agricultural product import and export are increasing, that china has also become the third biggest country of agricultural product import and the fifth biggest country of agricultural product export. In the meantime, the agriclture of China also meets the capital age, the general attracted agricultural FDI is continuously growing, the increasing level of using agricultural FDI is gradually improving, so that the status of using agricultural FDI of china has greatly changed. The trend of agricultural product trade of foreign investment companies is increasing year by year, even agricultural trade of foreign investment companies has become the main resource of the increasing amount of agricultural product trade of China, there is more tight link between the agricultural FDI and agricultural trade.With the gradually increasing of FDI, lots of scholars begin to focus on the relationship between FDI and foreign trade of China, the main field that they have been focusing on is the inter-relationship between FDI and foreign trade with the macro view. After that, with the further deepening of the study, the relations of FDI and foreign trade of different industries have also been focused, even the relationship of FDI and foreign trade in agriculture attracts some scholars’attention. But, because of different kinds of reasons such as industry difference and indutry policy defferetiation, the substituting relationship between trade and investment in different industry is not an absolutely necessity any more. Nowadays, the agriculture of China is in the transition period, agricultural trade is moving into a new development phase. Both the agriculture and agricultural product trade are facing the new situation and new challenge, the extensive economic growth pattern,which is characterized by quantity growth, is not going to be applied to the direction of the agricultural product trade development hereafter from now on. This change of agricultural trade strategy urges us not only to focus on the aggregated amount between FDI and agricultural product trade, but also to study how FDI influances agricultural trade growth pattern and how agricultural FDI influances agricultural product trade quality, in the end to improve the international competitiveness of agricultural product trade of China.The study in this dissertation is made from 2 directions, which are the quantity and structure of FDI influancing agricultural trade. This dissertation integrates the theoretical analysis of FDI and international trade, from empirical angle, analyzes how FDI influences the general amount of agricultural product trade, agricultural product trade structure and the regional agricultural trade through establishing the econometric model between agricultural FDI and agricultural trade, the above analysis belong to the post category.This dissertation studies FDI’s influances on the agricultural product trade of China from 3 angles:the general agricultural product trade, trade commodity structure and regional structure. This dissertation consists of seven chapters. The first chapters is introduction, which mainly explains the national and international study background of this dissertation, briefly explains the original questions and the meaning of doing this study, introduces the study methodology and study approach, the content arrangement and structure, and the study target and the mission of this study, and specifically states the probable innovation and the weakness. The second Chapter is theory review and documents commentary, giving the definition of agriculture, FDI, agricultural product trade etc. involved by this study, further more, introduces the relation and model between trade and investment, review and clarify the theory development and evolution process of the relation between FDI and international trade, from the angles such as traditional trade theory, new international trade theory and transnational corporation investment theory, the above is the basis for the empirical study and analysis; then from different angles, the related documents of the trade effectiveness of the FDI of the agri-food industry are compiled and analyzed, borrowing the study approach as the start point and basis of this dissertation study.The third Chapter is the general analysis on the development and change of using FDI in agriculture field and current status in China, illustrates the connotation and main performance of agriculture internalization, and futher more explain the important meaning of using agricultural FDI in the developing courntries and the importance of absorbing and using FDI in China; as the study background, there are lots of charts and statistics data which used to summarize the important development phase of using agricultural FDI in China, the current status of using agricultural FDI is also analyzed specifically in this chapter, the scale of agricultural FDI, the main source places, and the pattern of using agricultural FDI are also introduced, the main characteristics and the development trend of the agricultural FDI of China are the conclusion of this chapter, which is used as the basis and preparation of the following chapters.The forth,fifth and sixth Chapters are the core of this dissertation. In the forth chapter, the relation between agricultural FDI and the general import and export amount of agricultural product trade is analyzed. Firstly theoretically analyzes the trade effectiveness of FDI, then explain the mechanism of the influances of FDI on trade quantity, including import substitution, export creation, and import cause; secondly, evaluates the trade performance of foreign invested companies and empirically analyzes the relationship of FDI and agricultural product trade through using the indicators such as import and export ratio, import and export contribution ratio of foreign invested companies; thirdly, based on the qualitative analysis, empirically inspect the inter relationship between import and export of agricultural product trade through establishing econometric model and using co-integration analysis to provide empirical support for the above theoretical analysis.In the fifth Chapter, the influances of agricultural FDI on agricultural commodity trade structure are mainly analyzed, that is the influances of FDI on agricultural product trade structure. Firstly, introduces the basis of trade stucture determined in the situation of the traditional comparative advantage and the dynamic coparative advantage, and the relation among agricultural FDI, technology progress and trade structure, which is the theoretical basis of the fifth chapter; the empirical analysis is applied to the trade structure and change of agricultural product trade through using the trade structure index, in the mean time, the empirical analysis is also applied to the industry structure of agricultural FDI with the use of amount of data and the incidence coefficient; thirdly, the co-integration analysis is also applied to analyze the relationship between the agricultural FDI and agricultural export structure and agricultural import structure, and empirically test the agricultural FDI promoting the import and export structure of Chinese agricultural products with the taking of econometric method. In the sixth Chapter, the influences of FDI on Chiese agricultural product trade are discussed according to different regions. Firstly, analyzes the regional distribution of agricultural FDI, and summerizes the regional distribution characteristics and change of agricultural FDI with the use of provincial data and the industrial location quotient; secondly, analyzes the regional differentiation of agricultural product trade and reflects the interior qualitive change of the foreign trade of agricultural products; lastly, during the process of regional empirical test study, the empirical analysis is seperately applied to the import and export angles with the taking of panel data model and the establishing the Fixed effect Variable intercept model of the FDI’s regional trade effectiveness among the east, the middle and the west region of China.The seventh Chapter is the main conclusion and policy suggestion of this dissertation. The relative conclusion is made after what have been done in the theoretical and empirical analysis of this dissertation, the summerization comments are made and which provides the actual evidence for the policy making of agricultural FDI and agricultural product trade.The basic conclusion of this dissertation is as following, the relationship exists between FDI and the export of Chinese agricultural products is mutually complementary, that is the increasing of FDI in the agriculture field benefits to promote the development of the export development of Chinese agricultural products. The long time period and stable equilibrium relationship exsits between FDI and the Chinese agricultural product import, but the influences of FDI on Chinese agricultural product export is on the contrary, and the relationship between them is negative, that is the relationship between them is not complementary but substitutable; FDI has a positive influances on the optimization of agriculture industry structure, but to some extent, FDI strengthens the concentration degree of agricultural product import and export; regionally speaking, in the East, Middle and West parts of China, the relationship between FDI and agricultural product trade is not completely complementary. FDI is also the main reason which causes the imbalance of trade development among the East coastal developed area, the Middle area and the Western area of China.

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