Factors Influencing the Trade Deficit of Dairy in China: An empirical analysis based on revealed comparative advantage

Abstract

With the improvement of people’s living standards and changes in dietary structure, as well as the significant reduction of dairy tariffs and the abolition of dairy export subsidies after joining the WTO, China has become a net importer of dairy products since the mid-1990s, with a trade deficit in dairy products. Increase yearly. Through factor analysis, this paper found that the driving factors of China’s dairy trade deficit can be summarized into two major factors. The first major factor is the dairy market factor, including population, GDP, domestic dairy production, dairy consumption, international dairy prices and tariff; The second major factor is the substitute factor, including the consumer price index for meat and poultry and the consumer price index for eggs. Through regression analysis, it is found that population, GDP, domestic dairy product output, dairy product consumption, international dairy prices, tariffs are positively correlated with the dairy product trade deficit, while the meat and poultry consumer price index and egg consumer price index are negatively correlated with the dairy product trade deficit. At present, we should make overall plans and focus on the key points to improve the quality of dairy products supply from the perspective of the dairy market, stimulate market demand for dairy products, and improve the international trade environment for dairy products; increase the promotion of dairy products from the perspective of dairy substitutes and focus on expanding the rural consumer market. The above suggestions are not only conducive to narrowing the trade deficit of dairy products, but also helping China's dairy industry to successfully break through the 2020 epidemic and survive the crisis.