Abstract
<p>One of the most dependable trends in a country’s transformation from an undeveloped, to developing, and to developed country is a growing demand for dairy products and milk. As China has undergone an unprecedented transformation over the last few decades since Deng Xiaoping’s Open Door Policy, China has followed this trend of an increasing demand for dairy products. As with other industries in mainland China, the domestic dairy industry is progressing at an incredibly fast rate. Yet at the same time when China is building its own industry to meet the growing demand, trade liberalization by joining the World Trade Organization has brought intense competition from foreign milk producers such as New Zealand, Australia, and the United States. This thesis examines the factors that influence various facets of the Chinese dairy industry, including import and export trade, consumer demand, and domestic and international competition. In addition to a deep background assessment of the Chinese dairy industry and market, a Constant Market Share econometric model is utilized to assess the varying levels of influence that different factors have on the industry by using three different time periods as a model of assessment for the whole industry.</p>
Highlights
The rate of development of a country’s livestock industry is the cornerstone of building a state’s power and modernity, and the development of dairy livestock is the most important symbol
In regards to the massive trade deficit caused by dairy imports and the future development of China’s dairy industry, is it time for China to decrease this demand for foreign dairy products? At the end of the day, what are the driving factors causing China’s dairy industry to be so dependent on foreign products? What steps should the Chinese Government and market players take to decrease the chance of damage to the local industry caused by foreign imports being so huge? How can China take advantage of free trade to benefit its’ dairy industry? These are all questions we should be thinking about in this process
We set out to research in what degrees these factors influence the Chinese dairy industry, and how their influence is manifested in economic terms
Summary
The rate of development of a country’s livestock industry is the cornerstone of building a state’s power and modernity, and the development of dairy livestock is the most important symbol. On September 27, 2007 the State Council issued a declaration “Suggestions on the Development of Health & Safety for Milk Products.” This marked the beginning of the State’s active promotion of building the dairy industry. In regards to the massive trade deficit caused by dairy imports and the future development of China’s dairy industry, is it time for China to decrease this demand for foreign dairy products? China needs a large-scale systematization of the dairy industry; from hay farming, dairy cow husbandry and health, cow feed, milk testing and obtainment, to dairy processing and and maintenance This systematization is necessary to be set up with specific Chinese characteristics, in order to establish a solid barrier to foreigners trying to enter the Chinese market, and give China a home-field advantage in the dairy industry. Can we determine the conditions that would be necessary for China’s dairy industry to reach its full potential
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