Abstract
After the melamine milk scandal in 2008, China’s global imports of dairy products soared, especially after FTAs had been established with Australia and New Zealand. The dairy products of the two countries have a unique competitive trading advantage in the Chinese market. However, at a time when Chinese consumers are increasingly dependent on imported dairy products, a succession of whey protein scandals affecting New Zealand’s dairy products in 2013 had a negative psychological impact on Chinese importers and consumers, and this even affected the import status of New Zealand dairy imports to the Chinese market. The present paper, based on the United Nations Comtrade Harmonized System, studies the role of Australia and New Zealand in China’s dairy market. It calculates the trade competitiveness index, revealing the relative competitive advantages of Australia and New Zealand, and investigates the impact of the dairy products from these countries on China’s imports from the rest of the world across six dairy sectors in the period 1992–2017. We find that, under the food safety laws, the relative dairy import prices, milk scandals, and Free Trade Agreements, together with the competitive advantages of Australia and New Zealand, had a varied impact on the corresponding Chinese dairy imports across the relevant sectors in the context of China food safety laws after the melamine milk scandal. These findings acknowledge Australia and New Zealand’s competitiveness in the international dairy trade, and also lead to suggestions regarding their competitiveness and sustainable development in the Chinese market.
Highlights
China, one of the largest dairy consuming countries, has increased its consumption rapidly since the 1990s
This paper investigates the role of Australia and New Zealand in China’s relative imports of dairy related products
The set of results for the impact of relative price on sectoral dairy relative imports is presented in Tables 8–13 using the seemingly unrelated regression (SUR) model, where we consider the impact on sectoral trade with the world in relation to Australia and New Zealand combined in a single panel
Summary
One of the largest dairy consuming countries, has increased its consumption rapidly since the 1990s. The present research will compare the performance of China’s global dairy imports before and after entry into the WTO in the period of 1992–2017, across all sectors in relation to Australia and New Zealand especially in the context of the food safety laws following the milk scandals. Australia and New Zealand have long been China’s leading source of dairy products, and their market share in China has risen to more than 60 percent following the Chinese melamine milk scandal. On the proportion of imports from China’s dairy products market (shown in Table 3), after 2000, the ratio of Chinese imports from New Zealand and Australia has consistently exceeded 50, reaching 72.52 in 2010, though it fell after the New Zealand dairy scandal. We observed that the market share of Australian dairy products in China was basically stable, and was affected by the New Zealand whey protein scandal, China’s dairy imports from. Australia in Sectors 2 and 4 showed a downward trend, but the market share was not as volatile as New Zealand’s share
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