Abstract
Mongolia-China trade turnover has increased 250 times in 28 years. The two countries formally established diplomatic relations on October 16, 1949, which has now expanded to the level of a comprehensive strategic partnership. This paper seeks to study and analyse the factors that influence agricultural product trade between China and Mongolia and give recommendations which can create new possibilities for the expansion of bilateral agricultural trade that were established in 2014. We use Comparative analysis and apply factor regression analysis methods of econometrics and Revealed Comparative Advantage Index (RCA index) of the factors affecting the trade of agricultural products between China and Mongolia were analyzed. Our results show that the development of China-Mongolia agricultural trade is faster than the overall development of China’s agricultural product trade, the average annual growth rate from 2001 to 2018 of China-Mongolia agricultural trade is 17.1%, which is 4.3% higher than the average annual growth rate of China’s total agricultural trade, average annual growth rate of agricultural 26 import from Mongolia is 5.7% higher than the overall increase of China's agricultural imports, average annual increase of agricultural exports to Mongolia is 2.2% higher than the overall increase of China's agricultural exports, agricultural product trade is highly complementary, RCA index shows that China's livestock products industry used have a 28 very strong comparative advantage in live animals, China's live animals competitive comparative advantage has continued to decrease and the index result has fallen below 1 and Chinese pay more attention to the quality and safety of agricultural products. We make policy recommendations for promoting the development of agricultural trade between China and Mongolia and provide reference for the study of agricultural trade between China and Mongolia.
Highlights
China and Mongolia are neighboring countries that formally established diplomatic relations on October 16, 1949
The revealed comparative advantage index (RCA) index shows that China's livestock products industry used to have a 28 very strong comparative advantage in live animals, meat products, and dairy products
The calculation results show that China has no comparative advantage in animal hair, leather and leather products
Summary
China and Mongolia are neighboring countries that formally established diplomatic relations on October 16, 1949. The past 17 years has seen a rapid growth in imports of agricultural products, while exports have been relatively slow. They have always been in a trade deficit position, and the trade deficit has been expanding. The unique geographical location and resource endowments between China and Mongolia has broadened prospects of agricultural cooperation This has been enhance by the "Belt and Road" initiative which has brought about bilateral agricultural trade and development. Agricultural imports mainly include grains, beverages, sugar, grain products, livestock products, fruits, vegetables and vegetable oils These products accounted for almost 70% of all imports in the country between 2000 and 2016. China is Mongolia's largest trading partner, with revenue of US$6.7 billion in 2017, accounting for 63.8% of total
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