Abstract
In recent years, China has become the world’s largest importer of grain, and scholars have particularly examined whether China’s grain import trade presents this effect. By applying cointegration analysis to trade statistics panel data of China’s wheat, corn, rice, and soybean production and imports from January 2016 to December 2019, this paper empirically tests for the existence of the great country effect in China’s grain import trade. The results show that during the sample period, there is a long-term stable equilibrium relationship between the import volume, domestic price, and international price of the four major grains; the great country effect in the import trade of wheat and rice is not significant. The imports of corn and soybean present a great country effect to a certain extent in the short term; moreover, a change in the grain price in the international market does not lead to a change in China’s grain import volume, which shows that the great country effect in China’s grain import trade is distorted. Therefore, China should pay close attention to the impact of international factors on the fluctuation of its own food prices and enhance its ability to rationally utilize the international food market and international agricultural resources to ensure domestic food security.
Highlights
When a country has a large share of exports or imports of a certain commodity, it often has a significant influence on the international market price, which is called the “great country effect” in trade
Dorosh [1] believed that if a country imported a single variety of grain, its grain production and grain trade would both be greatly affected by international grain prices
Chard [2] remarked, “the rise of international grain prices in recent years has caused the rise of the agricultural product prices of many countries, while the rapid rise of some agricultural product prices has disrupted the order of the import and export trade of international grain from an asymmetric perspective.”
Summary
When a country has a large share of exports or imports of a certain commodity, it often has a significant influence on the international market price, which is called the “great country effect” in trade. Zhong Yu et al [14] proposed that because China is a large country, its increasing grain imports would lead to a great country effect and a rise in prices in the international food market, which would automatically play a role in curbing imports.
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