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Impact of COVID 19 on China’s agricultural trade

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Cấu trúc

  • Impact of COVID-19 on China's agricultural trade

    • Introduction

    • COVID-19 outbreak and potential impact on China's agricultural exports

      • The outbreak and short-term disruptions

      • Potential adversities with lasting effects

        • Dampened external demand

        • Possibility of future NTB

      • Simulation of prospective long-term impact

    • Prospects for China's agricultural imports with COVID-19 impact

      • Food availability in the world market: short-term disturbance vs. long-term supply

      • Changes in China's food imports: short-term observations

      • Simulations of potential changes in long-term meat imports

    • Conclusion and policy implications

    • Notes

    • References

    • Regression results

Nội dung

Nghiên cứu ảnh hưởng về đại dịch Covid 19 tới giao thương ngành nông sản của Trung Quốc. This study seeks to analyze how the outbreak of COVID19 could potentially impact China’s agricultural trade. With respect to exports, the authors have pinpointed major disruptive factors arising from the pandemic which have affected China’s agricultural exports in both the short and long term; in doing so, we employ scenario analysis which simulates potential longterm effects. With regard to imports, possible impacts of the pandemic regarding the prospects of food availability in the world market are investigated. Using scenario analysis, the authors estimate the potential change in China’s food market—especially meat import growth—in light of the implementation of the newly signed SinoUS Economic and Trade Agreement (SUETA).

The current issue and full text archive of this journal is available on Emerald Insight at: https://www.emerald.com/insight/1756-137X.htm Impact of COVID-19 on China’s agricultural trade The impact of COVID-19 on China’s agri-trade Lijuan Cao, Tianxiang Li and Rongbo Wang College of Economics and Management, Nanjing Agricultural University, Nanjing, China, and Jing Zhu College of Economics and Management, Nanjing Agricultural University, Nanjing, China and China Center for Food Security Studies, Nanjing Agricultural University, Nanjing, China Received May 2020 Revised 30 May 2020 20 August 2020 Accepted September 2020 Abstract Purpose – The outbreak of the novel COVID-19 virus has spread throughout the world, causing unprecedented disruption to not only China’s agricultural trade but also the world’s agricultural trade at large This paper attempts to provide a preliminary analysis of the impact of the COVID-19 pandemic on China’s agricultural importing and exporting from both short- and long-term perspectives Design/methodology/approach – This study seeks to analyze how the outbreak of COVID-19 could potentially impact China’s agricultural trade With respect to exports, the authors have pinpointed major disruptive factors arising from the pandemic which have affected China’s agricultural exports in both the short and long term; in doing so, we employ scenario analysis which simulates potential long-term effects With regard to imports, possible impacts of the pandemic regarding the prospects of food availability in the world market are investigated Using scenario analysis, the authors estimate the potential change in China’s food market—especially meat import growth—in light of the implementation of the newly signed Sino-US Economic and Trade Agreement (SUETA) Findings – The results show that China’s agricultural exports have been negatively impacted in the short-term, mostly due to the disruption of the supply chain In the long term, dampened external demand and potential imposition of non-tariff trade barriers (NTBs) will exert more profound and lasting negative effects on China’s agricultural export trade On the other hand, despite panic buying and embargoing policies from some exporting and importing countries, the world food availability and China’s food import demand are still optimistic The simulation results indicate that China’s import of pork products, in light of COVID-19 and the implementation of SUETA, would most likely see a sizable climb in quantity, but a lesser climb in terms of value Originality/value – Agricultural trade in China has been a focal-point of attention in recent years, with new challenges slowing exports and increasing dependence on imports for food security The outbreak of the COVID-19 pandemic adds significant uncertainty to agricultural trade, giving rise to serious concerns regarding its potential impact By exploring the impact of the unprecedented pandemic on China’s agricultural trade, this study should contribute to a better understanding of the still-evolving pandemic and shed light on pertinent policy implications Keywords COVID-19, Agricultural trade, Food security, Agricultural policy, China Paper type Research paper Introduction The COVID-19 virus broke out in late 2019 and continues to spread across the globe According to the data released by the World Health Organization (WHO), as of April 15th, COVID-19 has spread to 211 countries and regions, of which have more than 50 thousand confirmed cases These countries include many of the world’s most important economies The authors acknowledge financial support from the National Science Foundation of China (Project No 71773051, 71803085 and 71934005), National Social Science Fund of China (Project No 20ZDA102), Support by PAPD of Jiangsu Higher Education Institutions, Jiangsu Center for Food Security Studies, and Funds for the Central Universities (Project No SKCX2017002 and SKYZ2020004) is also acknowledged The usual disclaimers apply China Agricultural Economic Review Vol 13 No 1, 2021 pp 1-21 © Emerald Publishing Limited 1756-137X DOI 10.1108/CAER-05-2020-0079 CAER 13,1 (WHO, 2020) Unprecedented control measures, e.g city-wide lockdowns, social distancing measures, etc.— which negatively affect economic activities at large, also add significant uncertainty and adversity to agricultural trade Agricultural trade in China has developed at a fast pace since the country joined the World Trade Organization (WTO) Its total agricultural trade volume has increased from 28 billion USD to 230 billion USD from 2001 to 2019 (UNcomtrade, 2020), standing presently as the world’s No importer and No exporter Agricultural trade has played a prominent role in improving resource allocation and farmers’ income through exporting agricultural products, as well as contributing increasingly to enhanced food security by importing substantial amounts of food to satisfy the ever-growing demand from the world’s largest populations (Cheng, 2012; Cheng and Zhu, 2014; Ye, 2018; Zhu et al., 2018) During the pandemic, there have been restrictive entry policies formulated by a number of countries to deny food imports from China, resulting in both short- and long-term impacts on China’s agricultural exports There have also been cases where major food exporting countries have imposed embargoes on major food crops, causing panic and volatility in the international food market, as well as concerns regarding China’s future agricultural import and food security How the pandemic impacts China’s agricultural exports and imports and what are the short- and long-term prospects are important questions which require further, in-depth and timely research [1] Using observational data currently available, this paper is an initial attempt to explore the potential impact of the pandemic on China’s agricultural trade With respect to exports, we have pinpointed major disruptive factors arising from the pandemic which have affected China’s agricultural exports in both the short and long-term; in doing so, we employ scenario analysis which simulates potential long-term effects With respect to imports, the potential impact of the pandemic on the prospects of food availability in the world market is investigated Furthermore, we engage in an analysis of potential short- and long-term changes in China’s food supply, especially with regard to meat imports, which have risen in light of the pandemic and other external factors It must be noted that, due to the evolving nature of the ongoing pandemic, quantitative and qualitative empirical analyses in this paper are limited to the extent that the current data allows The analysis shows that, compared to drastic short-term disruption, the future uncertainty of economic growth at large and the potential imposition of non-tariff trade barriers (NTBs)—under the pretense of international safety concerns—would exert far more profound and lasting negativity on China’s agricultural export market On the other hand, the longer-term prospects for world food supply and availability still suggest optimism, notwithstanding short-term supply chain disruption and international market volatility resulting from irrational panic The resultant future downward trend of meat prices in the international market, in view of China’s newly signed trade agreement with the United States, tends to give rise to China’s import of pork products to a noticeable extent, signaling a potential shift in China’s agricultural trade toward more meat importation in the near future Presently, the COVID-19 pandemic is ongoing and the full consequences have yet to be discerned It is hoped that this paper will serve as an initial step in exploring the impact of this unprecedented pandemic on China’s agricultural trade, contributing, in turn, to policymaking The rest of the paper is organized as follows: Section is an examination of the potential impact of the COVID-19 outbreak on China’s agricultural exports; Section is an exploration of the prospects of China’s agricultural imports in view of the pandemic’s various impacts; Section concludes COVID-19 outbreak and potential impact on China’s agricultural exports The outbreak of COVID-19 not only led to the disruption of global agricultural trade chains but also resulted in restrictions from trading partners which will certainly affect the shortterm performance of China’s agricultural exports Moreover, the slowdown of global economic growth and the possible increase of NTB measures due to increasing health concerns in various countries are anticipated to have a profound and long-term impact on China’s agricultural exports This section intends to thoroughly examine potential factors which may impact China’s agricultural exports in both the short and long term Additionally, it provides a scenario analysis which simulates possible long-term impacts of the COVID-19 pandemic on China’s agricultural export market 2.1 The outbreak and short-term disruptions After the COVID-19 outbreak, China’s agricultural exports plunged dramatically According to the data from the General Administration of Customs, China’s exports decreased by 11.6% year-on-year in January and February The chief reasons for this drastic decline of China’s short-term exporting may be examined in two ways: the first being the abrupt disruption of supply chains of agricultural exports; the second being trade restrictions imposed on a series of Chinese agricultural products by a significant number of importing countries Immediately following the outbreak of the pandemic, the agricultural export supply chain began to experience various short-term problems Many firms producing export commodities remained shut down as employees could not return to work; some export companies reported a loss to more than 30% due to a lack of employees showing up to work (The 21st Century Business Herald, 2020) Additionally, transportation control increases shipping fees A survey on agricultural export firms shows that 69.9% of the respondent firms experienced an increase of logistical fees (Agricultural Trade Promotion Center, 2020a) Furthermore, the operation efficiency of domestic ports has declined, resulting in reduced transportation capacity In the meantime, the operation of foreign ports is not as efficient as normal, with some countries even closing their ports, substantially affecting the normal unloading and customs clearance process For example, as the outbreak worsened, the Queensland Maritime Safety Authority (MSQ)—where the port of Brisbane, Australia is located—banned all foreign merchant ships from docking ports in all Queensland regions for a period of 14 days It is reported that, in view of the measures to seal cities, the European internal land transport logistics enterprises took a major hit: e.g the highway connecting Germany and Poland has been congested, which also has affected the export of China’s agricultural products to those destination countries (Sohu News, 2020a) In addition to the supply disruption, some countries have used the pandemic as an excuse to take measures which restrict the import of China’s agricultural products, resulting in trade barriers to Chinese exports (Agricultural Trade Promotion Center, 2020b) Although there are some countries that have introduced such restrictive measures, such as Tajikistan, Jordan, Mongolia, South Korea, Kyrgyzstan, Egypt, etc., most of them are in fact not the main target markets of China’s agricultural export (see Table 1) It is illustrated in Figure 1, where the 2015–2017 average of China’s agricultural exports to these destination countries are compiled and presented The total value amounts to 138 million USD, less than 1% of China’s total agricultural exports, and the actual loss finally realized would be even less, due to the quick drop out of restrictions, for example, Mauritius canceled import restrictions on Chinese agricultural products other than live animals and fish in early February 2.2 Potential adversities with lasting effects The abrupt disruption of supply chains has gradually recovered with the improvement of the COVID-19 situation both within and outside of China The bleak economic prospects that have suppressed consumption and demand, along with the possible escalation of trade The impact of COVID-19 on China’s agri-trade CAER 13,1 Country Measurements Rep of Korea Import of wild animals that may transmit coronavirus from China was prohibited, mainly including snakes, bats, civets, etc Mongolia Restricted the import of chicken and egg products and strengthened the quarantine and supervision of imported goods from China Indonesia Import of live animals from China was prohibited India Strengthened the quarantine of agricultural products and animal husbandry products from China Pakistan Strengthened fumigation and disinfection measures for animal products from China in Karachi Port Nepal Suspended the import of animal products Kyrgyzstan Import of live animals, birds, fish, honey and animal products from China was restricted temporarily; Import restrictions of meat products had been canceled Kazakhstan Import of Chinese aquatic products was suspended Tajikistan Import of Chinese food was prohibited Jordan Import of Chinese animal and plant products and the issuance of relevant licenses were suspended Turkey Import of various animal products from China was suspended Azerbaijan Import of live animals, animal products, seafood and wildlife from China was suspended Georgia Suspended animals import from China Egypt Forbade to import onions from China and strengthened the import inspection of 14 kinds of agricultural products, such as potatoes, oranges and peanuts Cameroon Suspended the import of animals and aquatic products from China and strengthened the quarantine measures of animals at sea, land and air ports Mauritius Import of live animals, live fish and animal products from China was suspended On February Table 6, the restrictions were narrowed down to live animals and fish Restrictions on China’s Russia Import of insects, arthropods, amphibians, reptiles, live fish and aquatic organisms from China agricultural exports was suspended temporarily from trading partners (as of March 6, 2020) Source(s): Compiled by the authors from Agricultural Trade Promotion Center (2020b) 100 1.0% Million $ 0.8% 60 0.6% 40 0.4% 20 0.2% 0.0% 01-2015 02-2015 03-2015 04-2015 05-2015 06-2015 07-2015 08-2015 09-2015 10-2015 11-2015 12-2015 01-2016 02-2016 03-2016 04-2016 05-2016 06-2016 07-2016 08-2016 09-2016 10-2016 11-2016 12-2016 01-2017 02-2017 03-2017 04-2017 05-2017 06-2017 07-2017 08-2017 09-2017 10-2017 11-2017 12-2017 80 Jordan Figure China’s agricultural exports and market share in selected countries, 2015–2017 Tajikistan Kyrgyzstan Russia Other Share Note(s): Tajikistan and Jordan imposed restrictions to all agricultural imports from China Other countries in this figure imposed restriction to only animal products Share refers to monthly amount involved in the export restrictions / China’s monthly export of agricultural products Source(s): Authors’ calculations based on data from UNcomtrade barriers imposed by an increasing number of importing countries, are both factors which may have profound, long-term impacts that deserve our undivided attention 2.2.1 Dampened external demand In addition to triggering short-term supply chain and logistical disruptions, the global economic recession caused by the pandemic and the resulting decline in demand for agricultural imports could affect China’s agricultural exports over a longer period of time (Zhang et al., 2020; Barichello, 2020) The OECD report in March forecasted that the global economy would grow by 2.4% at best in 2020 (OECD, 2020) Lately, according to Goldman Sachs (2020), the COVID-19 pandemic in Europe, the United States and China is projected to reduce global GDP growth to 1.25% in 2020 More recently, the IMF’s newly issued World Economic Outlook Report predicts that global GDP will decrease by 3% in 2020, the worst recession since the Great Depression and significantly worse than the global financial crisis of 2008 (IMF, 2020a) In short, the outbreak casts a shadow over the global economy and therefore, the external demand for Chinese agricultural exports as a consequence It is also worth to note that since the income elasticities and market orientations of various export products differ, the decline in foreign demand for agricultural products vary among different products accordingly For example, the existing literature shows the elasticity of China’s aquatic exports to foreign income, which amounts to 1.17 in works by Hu and Huo (2008), is relatively higher than those of vegetable exports, 0.7629–0.7829 and À0.49%, as measured by Zhang et al (2013) and Zhang and Mu (2015) Relatively high elasticity may lead to a more pronounced decline in exports of aquatic products than would be seen among less elastic products, such as fruits and vegetables, the most two important products for China’s agricultural exports On the other hand, UN Comtrade data shows that aquatic products, China’s largest agricultural export, are mainly exported to Japan, the European Union, South Korea and the United States, where the GDP growth rates are projected by the IMF’s forecast to fall to À5.2%, À7.5%, À1.2% and À5.9%, respectively, by 2020 This drop in growth is bound to significantly reduce the export of such products Unlike aquatic products, the target market for vegetables —China’s second largest agricultural export—is concentrated in Vietnam, Hong Kong, Japan and Malaysia, where the GDP growth rate, according to the IMF forecast, will change by 2.7%, À4.8%, À5.2% and À1.7%, respectively, in 2020 It could be expected that with emerging economies, relatively less heavily affected by the pandemic in economic growth, becoming increasingly the major targets of Chinese agricultural export amid the global economic downturn, there may appear broader changes in the fundamental structure of China’s agricultural export market 2.2.2 Possibility of future NTB It has been observed that after the COVID-19 pandemic in China was declared by the WHO as a public health emergency of international concern (PHEIC), some 17 countries took measures to restrict the import of Chinese agricultural products, especially live animals and animal products (Agricultural Trade Promotion Center, 2020b) This gives rise to concerns over the possibility of increasing NTB measures for China in the near future, including sanitary and phytosanitary (SPS) measures, technical barriers to trade (TBT) and other NTB measures We hereby provide an analysis of comparison of the changes in NTB suffered by China before and after the outbreak of SARS in 2003, the most comparable and available case to that of the present pandemic, to shed some lights on the prospected change in this regard Considering that SPS are the most frequently used means of NTB measures toward agricultural export and that special trade concerns (STC) can better reflect the severity of SPS measures (Crivelli and Gr€oschl, 2016; Tian and Cai, 2019), we focus on a comparison of the changes of SPS-STCs volume encountered by China’s agricultural export market around 2003 As indicated by Table 2, our analysis of the WTO’s Integrated Trade Intelligence Portal (I-TIP) shows that, compared to the period from 1998 to 2002, China’s agricultural exports from 2003 to 2007 were subject to more than twice in the number of SPS-STCs In terms of The impact of COVID-19 on China’s agri-trade CAER 13,1 Measures 1998–2002 Products concerned Measures 2003–2007 Products concerned HS: 21, 08, 06,0602, 11 HS: 21, 2106, 0808, (1) Developed (1) Developed 030613 09,0902,160232, 0302, 0511, Countries Countries 23, 2308, 0201, 0202, 33 • USA • USA • Japan • Japan • Australia • EU (2) Developing (2) Developing Countries Countries Note(s): HS refers HS code, 21: miscellaneous edible preparation; 08: fruits; 06: trees and other plants; 0602: live plants; 030613: crustaceans, shrimp and prawns; 2106: food preparation; 09: coffee, tea, mate and spices; Table 0902: tea; 160232: meat preparations of poultry; 0302: fish, fresh and chilled; 0511: animal product; 23: food Comparison of SPS special trade concerns industry, residual and waste; 2308: vegetables materials and vegetables waste; 07: vegetables; 0201ỵ0202: meat of bovine animals; 33: essential oil; 0808: apples, pears and quinces, fresh toward Chinese Source(s): Authors’ calculation based on data from WTO, Integrated Trade Intelligence Portal (I-TIP) agricultural exports before and after SARS (accessed April, 2020) launch frequency, prior to 2003, the United States, Japan and Australia each raised one SPSSTC Afterward, the United States, the European Union and Japan each launched three to five SPS-STCs A growing number of Chinese products with long-standing export advantages were more frequently subject to SPS measures, including fresh apples and pears, tea, spices, fish, beef, chicken, etc Increased NTB will directly lead to the rejection and confiscation of some of China’s competitive export products which will result in huge economic losses This will also lead to rising compliance costs to Chinese exporters, since they will have to either evade or meet higher requirements, thereby indirectly affecting China’s agricultural exports Although previous studies did not directly list the SARS epidemic as the reason for the increase of NTB to China, it cannot be ruled out that they were imposed as a result of countries’ increased concern for public health post-SARS One good example to consider for reference is the case of Japan’s nuclear leak, which shows that even after five years, only a few countries completely loosened regulations, with many other countries, including China, still ban the import of agricultural products originated from Fukushima and its neighboring regions (Sohu News, 2020b) This, to certain extent, implies that there’s high probability the pandemic would lead to increasing non-tariff measures, posing limits to agricultural exports (Barichello, 2020) 2.3 Simulation of prospective long-term impact To gain further insights into the long-term impact of the decreased demand and NTB measures caused by the pandemic on China’s agricultural exports, we carried out a simulation analysis with scenarios associated with varying degree of changes in the above mentioned possible long lasting adversities We set three scenarios to estimate the possible impact of the expected decline in economic growth on China’s agricultural exports: Scenario (S1) is with projection of global economic growth rate at 2.4% as predicted by the OECD in March 2020, Scenario (S2) at 1.25% by the Goldman Sachs Group in February 2020 and Scenario (S3) at À3.0% by IMF in April 2020, as opposed to Scenario 0, the benchmark scenario (S0), where the global economy is assumed to grow at the rate of year 2019 The simulation results, as presented in Table 3, show that compared with the benchmark scenario, the slowdown of global economic growth rate will lead to a noticeable decline Scenario Growth rate of GDP (%) εgdpj GR of agri export (%) Forecast of agri export Changes in value Change rates (%) 1.88 0.98 À2.35 80.49 79.78 77.16 À0.31 À1.02 À3.65 À0.38 À1.26 À4.52 Simulations of change in global GDP S1 2.40 0.787 S2 1.25 S3 À3.00 Scenario Growth rate of SPS εspsj εprice Simulations of change in SPS measures S1* SPS increase 10% À0.138 Compliance Costs À0.060 increase 5% S2* SPS increase 100% À0.138 Compliance Costs À0.060 increase 15% GR of agri export (%) Forecast of agri export Changes in value Change rates (%) À1.38 À0.30 77.68 À1.09 À0.24 À1.38 À0.30 À13.80 À0.90 67.40 À10.90 À0.71 À13.80 À0.90 Note(s): GR refer to growth rate Source(s): Authors’ calculation China’s agricultural exports, namely by 0.38%, 1.26% and 4.52% in S1, S2 and S3, respectively We estimate further the impact of the pandemic by incorporating the possible increase in SPS measures on China’s agricultural export in the aftermath of the pandemic, by taking into account both direct and indirect effects on the enterprises’ compliance costs Previous studies have shown that the compliance costs of agricultural export enterprises, when encountering SPS measures, generally accounts for 5–15% of their sales revenue (Otsuki et al., 2001; Jyasuriya et al., 2006) We therefore, set the following simulation scenarios, where S1* assumes the number of SPS measures increases by 10%, the annual growth rate of SPS initiated by China’s major export counterparts in 2010–18, while the compliance costs increased by 5%; and S2* the number of SPS measures doubles for agricultural products, with the compliance costs increased by 15%; as opposed to the S0*, the benchmark scenario, where the number of SPS measures remains unchanged comparing to that of 2019 The results show that, compared with the benchmark, if the pandemic results in an increase of SPS by 10–100% and the compliance costs of enterprises increases by 5–15%, agricultural exports in China will be reduced by 1.68%–14.70% lower than the benchmark scenario (see Table 3) We have also made an attempt to estimate the impact of the pandemic on different categories of China’s agricultural export, taking vegetables and aquatic products, two major agricultural exports in China as exemplars It is worth noting that since different categories of agricultural exports have their own major targeted markets, with varying income elasticities, the impact of the same pandemic on the export of these categories of products therefore differs To simplify the illustration, we take the Scenario S1**, where the global economic growth rate is as predicted by the IMF, as opposed to S0**, where the growth rate is assumed to be unchanged from that of 2019 The simulation results, as presented in Table 4, show that in the situation as indicated by S1**, export of China’s vegetables and aquatic products will drop by 0.22 and 0.64 billion USD, respectively, manifesting a much larger negative impact of the pandemic on aquatic products than that of vegetables A further decomposing of export market reveals that China’s aquatic product exports to the European Union and the United States, the two major markets, will fall by nearly 9% and 6%, respectively China’s vegetable exports, on the other hand, sees an expected rise of 0.04 billion USD to its major export market of Vietnam and The impact of COVID-19 on China’s agri-trade Table Scenario simulations of the impacts of changes in global GDP and SPS measures on China’s agricultural exports (billion USD) CAER 13,1 S0** China’s export to S1** Export in 2019 Value Share (%) Aquatic products (HS:03) Japan 2.04 EU 1.87 Rep of Korea 1.39 USA 1.33 China, Hong 0.95 Kong, SAR Other 4.89 World 12.47 Changes of export Value (%) Growth rate of GDP (%) Forecast of export 16.4 15.0 11.1 10.7 7.6 À5.2 À7.5 À1.2 À5.9 À4.8 1.91 1.70 1.37 1.24 0.89 À0.13 À0.17 À0.02 À0.09 À0.05 À6.2 À8.9 À1.4 À7.0 À5.7 À0.20 À0.60 0.50 À0.20 À0.10 39.2 – À3.0 – 4.72 11.83 À0.18 À0.64 À3.6 – 0.70 – 2.3 À4.1 0.90 À0.30 À4.4 À1.4 À5.7 0.4 À2.5 – À0.30 0.00 À0.20 0.10 À0.20 – Vegetables (HS:07) Vietnam 1.86 18.0 2.7 1.91 0.04 China, Hong 1.64 15.8 À4.8 1.57 À0.07 Kong, SAR Japan 1.28 12.4 À5.2 1.22 À0.06 Table Malaysia 0.77 7.5 À1.7 0.76 À0.01 Scenario simulations of Thailand 0.67 À0.04 0.72 6.9 À6.7 the impacts of global 0.55 5.3 0.5 0.55 0.00 GDP change on China’s Indonesia Other 3.52 34.1 À3.0 3.43 À0.09 exports of aquatic World 10.33 – – 10.11 À0.22 products and Note(s): εgdpj of aquatic products and vegetables are 1.155 and 0.860 respectively vegetables Source(s): Authors’ calculations (billion USD) Change of share (%) relatively small changes to other markets The contrast could be attributed to both the difference in elasticity of these two categories of products and the difference in GDP growth in those target markets, where developing countries are less negatively affected by the pandemic than those of developed countries Prospects for China’s agricultural imports with COVID-19 impact As the world’s most populous country and the largest agricultural importer, China’s food imports play an important role in meeting its growing domestic food demand and bolstering food security However, the COVID-19 pandemic, along with other domestic and international dynamics, has added an element of uncertainty to China’s food imports On the one hand, the first few months of the pandemic witnessed panic buying and embargoing by major importing and exporting countries High volatility in the world food market brought about great concern over the long-term food availability in the world market and China’s food import security On the other hand, the latest statistics show that China’s import of pork and beef products surged by 170% and 65%, respectively, in the first quarter of 2020 It also remains to be explored whether this is the outcome of immediate changes in meat demand due to COVID-19, or rather an indication of possible shifts in trade patterns in the long run 3.1 Food availability in the world market: short-term disturbance vs long-term supply COVID-19 related quarantine measures have resulted in significant challenges to the world’s agricultural supply and circulation systems During the outbreak, some countries introduced food export restrictions for the sake of food security To date, 13 countries, including Russia, Cambodia, Vietnam and Egypt, have announced or initiated export restrictions on food products, covering many categories of food (see Table 5) Food export restrictions Country/Group Vietnam Products concerned Rice Cambodia Rice Kazakhstan Buckwheat, sugar, potato, radish, wheat and flour etc Serbia Thailand Sudan Jordan Egypt Sunflower oil Egg Sorghum Vegetables Beans Russia Wheat, barley and corn North Macedonia Wheat The Eurasian Economic Uniona Onion, garlic, radish, rye, rice, milletetc Panic buying Algeria Wheat Policies related From March 24, all rice export has been suspended On March 31, the Vietnamese government announced to resume rice export on the premise of ensuring food supply security From April 15, it has been forbidden to export white rice and paddy rice, but not Jasmine Rice (announced on March 30) From March 22, the export of agricultural products such as buckwheat, sugar, potato, radish, beet, onion, cabbage, sunflower seed, wheat and flour, etc., has been suspended And the monthly quota management system for wheat and flour has been implemented Sunflower oil export has been forbidden Egg export has been banned Ban on Sorghum export since April 15 From March 28, stop exporting vegetables From March 28, the export of all kinds of beans has been stopped From April to June 30, export quotas have been set before the end of June Export of wheat, mixed wheat and wheat flour has been temporarily prohibited On March 31, it was decided to temporarily prohibit export of 14 kinds of vegetables and food products to countries outside the alliance until June 30: onion, garlic, radish, rye, rice, millet, buckwheat, buckwheat products, grain fragments, whole wheat flour, grain particles, soybean and soybean fragments, sunflower seeds A new wheat tender was issued, ordering 680000 tons of flour wheat at a high price on March 12 and another 240000 tons at a higher price on March 24 Turkey Wheat New tender for wheat was issued Morocco Wheat Wheat import tariff was suspended before the middle of June Iraq Wheat and Rice Need for million tons of wheat and 0.25 million ton of rice was announced Note(s): aMembers in the Eurasian Economic Union are: Russia, Kazakhstan, Kyrgyzstan, Armenia and Belarus Source(s): Compiled by the authors from “Lists of restrictive measures due to COVID-19 in countries (regions)” in Business data center and public news from https://finance.sina.com.cn/wm/2020-04-18/ dociircuyvh8559486 shtml People around the world have also been hoarding food due to COVID-19 panic (see Table 5) This has resulted in a sharp rise in the demand for food reserves and imports in the short term In this context, the short-term food supply and demand in the world market shows a clear upward trend which can be seen in the price of rice For example, the price of white rice from Thailand (5% broken) rose 9.7% from February to March (see Figure 2) This has aroused widespread worldwide concern about food security (Glauber et al., 2020; Fan, 2020; Fan et al., 2020; Ye et al., 2020; Si et al., 2020) Three international organizations, (i.e WTO, The impact of COVID-19 on China’s agri-trade Table Export restriction on and panic buying of food in major trading countries during the COVID-19 pandemic (As of April 8, 2020) CAER 13,1 1,000 900 $/mt Maize Sorghum Rice, Thai 5% Wheat, US HRW 800 700 10 600 500 400 300 200 100 Figure Changes in world grain prices (Jan 2007–Dec 2009 vs Jan 2018– Mar 2020) 2018M02 2018M04 2018M06 2018M08 2018M10 2018M12 2019M02 2019M04 2019M06 2019M08 2019M10 2019M12 2020M02 2007M01 2007M03 2007M05 2007M07 2007M09 2007M11 2008M01 2008M03 2008M05 2008M07 2008M09 2008M11 2009M01 2009M03 2009M05 2009M07 2009M09 2009M11 Note(s): World’s maize price is the f.o.b US Gulf ports price of yellow maize (no 2); sorghum price refers to f.o.b US Gulf ports price of yellow sorghum (no 2); world’s rice price refers to f.o.b Bangkok price of white rice (5% broken); international wheat price refers to export price of US hard red winter wheat (no.1) delivered at the US Gulf ports Source(s): Prepared by the authors with data from Pink Sheets, World Bank, extracted on 2020-4-20 FAO and WHO) jointly issued a statement stating that “As countries move to enact measures aiming to halt the accelerating COVID-19 pandemic, care must be taken to minimize potential impacts on the food supply or unintended consequences on global trade and food security.” (Xinhua Net, 2020) Such a situation reminds people of the world food crisis taking place during 2007–2008, when there occurred a shortage in the world food supply, resulted from droughts in both Australia and Argentina and concurrent excessive biomass fuel development As a result, the major international food import and export countries bought food en masse and limited exports, shocking the world food supply For example, Morocco and the European Union reduced import tariffs on wheat and grain, respectively, while countries such as Kampuchea, Vietnam and India restricted rice exports This ultimately led to a 1.76-fold increase in the price of rice during the six months following October 2007, which in turn triggered a global food crisis However, just after half a year, food prices worldwide (except for rice) began to fall sharply, dropping to a level even lower than they were before the crisis (see Figure 2) In contrast, the world food prices in the recent year have been remaining at relatively low levels Although there occurred some small upward move in February 2020, prices for food other than rice have already shown signs of declining in March, as manifested in Figure As such, this short-term fluctuation in the world food market is more attributable to the beggar-thy-neighbor trade policies adopted by some major food trading countries, than to the real change in supply and demand resultant from COVID-19 To understand the long-term impact of COVID-19 on China’s food import security, it is the longer term food production capability, than the short-term disturbance, that deserves our focused attention Therefore, it is necessary to explore if the pandemic will exert a negative impact on the long-term supply capacity of food production We focus on two kinds of products which are important to China’s food and import security: grain, the traditionally most import category of food and meat products, the food category that witness importing at a rapidly increasing rate in recent years In terms of grains, data recently released shows that global supplies are basically sufficient (USDA, 2020a) In fact, since 2015, global grain production has been continuing to exceed consumption; grain stocks have been continuing to rise, and world grain prices have remained low Additionally, the prospects of the world’s rice, wheat and corn production in 2020 are for the most part optimistic As shown in the world market and trade report by the USDA, during the annual year of 2019/2020, the global wheat production increased, while corn and rice production slightly decreased, and the total global grain output was 2.37 billion tons, 0.82% higher than that of the previous year and 3.2 million tons more than the demand At the same time, by the end of the year, global grain stocks were slightly more than those of the previous year, and the stock consumption ratio reached 28.4%, significantly higher than the internationally recognized safety level of 17%–18% (USDA, 2019; USDA, 2020a) With respect to meat and poultry, since the production in China have been affected by the overlapping effects of the ASF and COVID-19 pandemic, China’s pork production will shrink in 2020, leading to a decrease in the world pork supply However, the world beef supply is basically stable; the chicken supply is on the rise, and the total livestock and poultry production is currently greater than total consumption It is estimated that the production and demand gap of beef, pork and chicken in 2020 will be 1.9, 0.9 and 2.0 million tons, respectively (USDA, 2020b) As analyzed above, despite short-term fluctuations, the impact of COVID-19 on the longterm food supply, especially on those foods most important to China, is relatively small: the supply of grains is sufficient, and the total output of livestock and poultry products is stable As long as the international community learns from past experiences and develops partnerships with other countries, there should be little lapse in food availability 3.2 Changes in China’s food imports: short-term observations According to the data just released by the General Administration of Customs, China’s agricultural imports in the first quarter of 2020 were at 37.08 billion USD, an increase of 8.9% over the same period last year The sharp increase in the imports of meat is especially striking Compared to the relatively small increase of 5.7% in grain imports (including soybeans) and 6.2% in soybean imports over the same period of last year, the total quantity and value of meat imports are increased by 85.6% and 137.8%, respectively Pork had the greatest increase in import, the total quantity and value of which, during January to March 2020, surged by 170.6% and 386.4%, respectively, over the same period of last year, and those for beef import also increased by 64.9% and 100.2%, respectively, over the same period of last year Because of the coincidence with the pandemic, one cannot help but ask whether the marked increase of food imports, especially in meat, are a direct result of the pandemic We hereby address this question by conducting an in-depth investigation of the production and trade data Before the outbreak of ASF, China’s pork and beef production was stable with an annual drop of – 0.9% and 1.5%, respectively, in 2018 Pork production decreased by 14.0%, reducing domestic pork supplies considerably, thus leading to significant changes in China’s pork import demand Figure represents China’s monthly imports of pork and beef from 2017 to 2019 It shows that before ASF, although the monthly import of pork fluctuated, the range of fluctuation was small In the first few months of ASF, which overlapped with the Sino-US trade war, China’s tariff on imported pork directed at the United States made the import of pork suffer a downward trend; however, although the tariff continued to have a negative impact on pork imports in 2019—when the domestic pork supply was greatly affected by ASF—the imports per month exceeded that in 2017 and 2018 Specifically, in the last quarter of major decline in The impact of COVID-19 on China’s agri-trade 11 CAER 13,1 Sino-US Trade War 250 Thousand tons 12 300 outbreak of African Swine Fever 200 150 100 50 Figure Monthly import of pork and beef products in China (Jan 2018– Dec 2019) 20 17 20 M0 17 20 M0 17 20 M0 17 20 M0 17 20 M0 17 20 M1 18 20 M0 18 20 M0 18 20 M0 18 20 M0 18 20 M0 18 20 M1 19 20 M0 19 20 M0 19 20 M0 19 20 M0 19 20 M0 19 -M 11 Pork import Beef import Source(s): Authors’ calculations based on data from ITC trade map and General Administration of Custom, China domestic pork production, China’s pork import increased by 47% within just three months; by contrast, beef import in China showed a steady growth trend from 2017 to 2019, with no obvious change due to the occurrence of ASF This suggests that ASF affected the pork market and that there is a correlation between the decrease of domestic pork production and the increase of import, while the beef market was not significantly affected We could gain a better understanding by calculating the year-on-year and quarter-onquarter growth rates of imports during that period As shown in Table 6, compared with that in 2018, when the role of ASF had not yet been shown, the growth rate of China’s pork import in each quarter of 2019 kept increasing substantially This suggests that ASF marks an important turning point in the growth of pork imports Moreover, coupled with the outbreak of COVID-19 in the first quarter of 2020, China’s pork import increased by 177.6% year-onyear and 38.8% quarter-on-quarter, respectively, much higher than the growth rate of other agricultural products over the same period In fact, the growth rate was already closer to 147.8% year-on-year and 31.9% quarter-on-quarter in the fourth quarter of 2019, inferring that the remarkable growth rate of pork in the first quarter of 2020 is more likely a continuation of the general growth trend of pork import caused by ASF than being impacted specifically by the pandemic In the case of beef, the growth rate has been more stable and showed little sign of significant impact of either ASF or the pandemic 3.3 Simulations of potential changes in long-term meat imports Although the impact of the pandemic on China’s short-term meat import market is not significant as discussed above, whether it will affect China’s long-term meat import demands deserves further exploration Year-on-year growth rate Table Year-on-year and quarter-on-quarter growth rate of pork and beef import in China, 2019- JanMar 2020 Pork Beef Quarter-on-quarter growth rate 2019M 01 − 03 2018M 01 − 03 2019M 04 − 06 2018M 04 − 06 2019M 07 − 09 2018M 07 − 09 2019M 10 − 12 2018M 10 − 12 2020M 01 − 03 2019M 01 − 03 3.2% 47.1% 49.5% 57.9% 84.3% 54.4% 147.8% 74.9% 177.6% 64.8% 2019M 01 − 03 2018M 10 − 12 2019M 04 − 06 2019M 01 − 03 2019M 07 − 09 2019M 04 − 06 Pork 23.9% 44.9% 4.7% Beef 3.4% 24.1% 12.6% Source(s): Authors’ calculations based on data from ITC trade map 2019M 10 − 12 2019M 07 − 09 2020M 01 − 03 2019M 10 − 12 31.9% 21.2% 38.8% À2.7% Take pork and beef as example On the one hand, due to the relatively long production cycle, usually 10 months for pork and 15 months for beef, the negative impacts of the pandemic, namely livestock feed shortage and lack of manpower during the period, would lead to long-term production decline Moreover, the pandemic has led most farms unable to properly breed animals, posing threats to meat supply of the next cycle Statistics show that due to the pandemic, there has been a relatively small number of seedlings produced by cows, implying a supply gap of about 1.3 million tons of beef in China from spring to autumn in 2022 (National beef and yak industry system, 2020; Chinafeed, 2020) All these underscore the high probability of substantial reduction in domestic pork and beef production in the coming cycle(s) (Wang et al., 2020; Fan et al., 2020) On the other hand, after the pandemic, there may appear noticeable growth in long-term demand for meat in China, driven by the high probability of retaliatory consumption, as shown in survey results of various agents (Jiangsu Provincial Consumer Committee, 2020; Jiangsu Business Daily, 2020), as well as rising demand for food storage, with meat a preferable choice for that purpose The impact of the pandemic is also reflected in the change of supply and demand in the world meat market outside China The world major meat suppliers, such as Brazil, the United States and the European Union, all reported labor shortage in slaughterhouses and processing factories, with some processing plants even being closed due to workers’ diagnoses of COVID-19 (IFIP Institute, 2020; Sohu News, 2020c However, although the breakdown of the slaughtering and processing chain have had a huge impact on the shortterm supply of meat in the world, it also means that a relatively large number of animal slaughter is expected to be delayed and rolled forward to succeeding quarters, which will result in a substantial increase of meat supply in the European Union and the United States in the post-pandemic period According to the forecast of the USDA, the pork production of the United States will increase by 1%, 8% and 4%, respectively, in the last three-quarters of 2020 (USDA, 2020c) On the other hand, the economic downturn resulted from the pandemic will put a downward pressure on consumption demand for a longer period of time It has therefore been predicted that the changes in the global meat supply and demand will lead to a long-term decreasing trend in world meat prices as a result of the pandemic (USDA, 2020c; IFIP, 2020) With the increasing dependence of China’s meat imports on the world market, the changes in world meat prices are bound to respond to changes in China’s demand for meat imports Based on this rationale, quantitative simulations can be carried out by obtaining price elasticities and the range of possible price changes in the near future to estimate the magnitude of potential change to China’s meat imports over the period It needs to be noted that tariff and non-tariff changes, if there occur, would also have the effect equivalent to that of price changes and therefore need to be taken account as well [2] This is in fact the case for China since the outbreak of COVID-19, when tariff reduction occurred, and the newly signed Sino-US Economic and Trade Agreement (SUETA) was implemented [3] Since pork accounts for more than 60% of China’s meat consumption and has seen the largest increase in import throughout the first quarter of 2020 as mentioned above, we take pork as the focus of the simulation analysis The import price elasticity employed in this simulation is with reference to Nti et al (2019), which utilized the nonlinear aluminum ideal demand system (NAIDS) model to calculate price elasticities for China’s pork imports from major importers during 2010–2017, the period most recent given data availability for model analysis The range of price changes due to the pandemic is assumed in this study based on the most recent report released by the USDA, forecasting that the pandemic will lead to a 16% reduction of pork prices as compared with last year (USDA, 2020c) [4] The following three Scenarios are set, against the benchmark scenario S0, where there is no incidence of COVID-19, but with the MFN tariff reduction on pork import to China from 12% to 8%, as has been occurred since January 1st, 2020 and a 5% reduction of additional tariff on port imports from the United States The impact of COVID-19 on China’s agri-trade 13 CAER 13,1 (1) S1: assuming that the impact of COVID-19 resulting in a price reduction of pork between 14 and 18%, other conditions as per S0; (2) S2: assuming that China ceases to apply additional tariffs on the US pork imports, with only MFN tariffs applied as did with other countries, other conditions as per S1; 14 (3) S3: assuming that China will grant further favorable terms to the US imports by eliminating tariffs on US pork import, other conditions as per S1 The simulation results are presented in Table Results in Scenario manifest the possible long-term impact of the pandemic on the potential change of China’s pork import, in terms of both volume and pattern It shows that a decline of world market price around 14–16% due to the pandemic would result in an increase of China’s total pork import by 32.8–42.2% in quantity and 13.8–15.9% in value The simulation results of S2 and S3 presents the combined effect of both the pandemic and the declining tariff rate levied on the US pork imports With only MFN tariff, and even zero tariff on the US pork imports, the scenarios that would likely to occur against the background of the newly signed SUETA, China’s pork import would increase in quantity by 35.6–45.0% and 36.1–45.4% in quantity, respectively and by 11.1–13.1% and 10.6–12.5% in value, respectively, compared with the benchmark Scenario It could be inferred from the above that the increase of total import quantity would be significantly higher than that of the value, and that the ease of Sino-US relations alone will only lead to a small increase in China’s pork imports, regardless of whether additional tariffs on the US products are significantly reduced or if they are eliminated altogether This may be related to the relatively small share of the US pork in China’s pork imports and the trade diversion effect Conclusion and policy implications The sudden outbreak of the COVID-19 pandemic and the unparalleled worldwide containment measures taken have impacted almost every aspect of international economic activity China’s agricultural trade, standing presently as No in imports and No in exports—with trading partners including over two hundred countries and regions—also faces challenges and uncertainties China’s agricultural export, an essential component of farmers’ income, will in turn be affected by the pandemic in both the short and long term Additionally, whether China’s growing food import demand from the world market will be disrupted or shifted to a changing pattern is, inter alia, another concern to be addressed The pandemic is, however, still ongoing and will last for an indeterminate amount of time, S1: Import change (%) Quantity Value S2: Import change (%) Quantity Value S3: Import change (%) Quantity Value World 32.8–42.2 13.8–15.9 35.6–45.0 11.1–13.1 36.1–45.4 10.6–12.5 Canada 13.8–17.8 À2.7–4.2 13.8–17.8 À2.7–4.2 13.8–17.8 À2.7–4.2 USA 10.6–13.7 À5.7–7.9 34.9–37.9 À30.6–34.8 38.4–41.4 À35.5–40.1 Table EU 42.2–54.2 21.5–25.4 42.2–54.2 21.5–25.4 42.2–54.2 21.5–25.4 Scenario simulations of Brazil 21.3–27.3 3.7–3.6 21.3–27.3 3.7–3.6 21.3–27.3 3.7–3.6 long-term impacts of 18.1–23.3 1.0–0.3 18.1–23.3 1.0–0.3 18.1–23.3 1.0–0.3 the pandemic and the Other Note(s): Price elasticities for China’s pork imports from Canada, US, EU, Brazil and other countries are À1.024, easing of Sino-US – 0.790, – 3.375, – 1.606 and – 1.375, respectively (Nti et al., 2019) relations on China’s Source(s): Authors’ calculations pork import rendering it difficult but necessary to make the best possible assessments of its potential future impact In this paper, we have made an initial attempt to explore the potential impact of the pandemic on the prospects of China’s agricultural trade, using available data and observations Quantitative and qualitative analysis has been employed to investigate the possible impact of the pandemic on China’s agricultural imports and exports By identifying the major disruptive factors arising from the pandemic in both the short and long term— e.g supply chain disruption, dampened external demand and potential imposition of NTB—we carried out scenario analysis simulating the potential long-term impact on China’s agricultural exports We then made an in-depth examination of the pandemic on the shortand long-term food availability in the world market, based on the best available data and latest updates Particular attention has been paid to the potential changes in China’s food trade patterns and the trend toward increasing meat products in the near future This has been compounded by other external factors such as the newly signed Sino-US trade agreement, with analysis of both short-term data observations and longer-term scenario simulations The analysis shows that China’s agricultural export has seen a significantly negative impact in the short run, mostly due to the disruption of the supply chain The import restrictions imposed by numerous countries on China’s food products did not constitute a substantial obstacle to China’s agricultural exports at the time, given the relatively small scale of market share The potential of these restrictive measures or other NTB measures—such as SPS— to be formally adopted by a wider range of countries in the name of safety concerns, would certainly give rise to further uncertainty and adversity in China’s agricultural export market In the long run, the dampened external demand which resulted from the pandemic’s negative economic effects will be the most prominent adverse factor impacting China’s agricultural exports The simulations in this paper show that, against the base scenario, a 0.5–3% decrease in economic growth would result in 0.38–4.52% decrease in China’s agricultural export, ceteris paribus, with exports in traditionally advantageous areas (e.g aquatic products) seeing the sharpest decline In conjunction with the escalation of NTB, the magnitude of decline would be amplified even further The analysis also shows that, on the other hand, the prospects for China’s food imports—a legitimate concern for the country’s food security - are optimistic Relatively high levels of availability in the world food market is observed and projected both in the short and long term, regardless of the short-lived market volatility which resulted from general panic at the onset of the pandemic In the longer term, the anticipated ample supply vis-a-vis diminished demand due to the negative economic downturns in most countries would lead to a lower price of food In this paper, this is illustrated with the example of pork, the major meat product for consumption as well as potentially for importing in China Based on projections of pork price decline in the near future and the price elasticity of China’s imports, the simulation results show that China’s import of pork products would most likely see a sizable climb in quantity but to a lesser degree in value The above results bear important policy implications With respect to agricultural exports, it should be noted that compared to the short-term drastic disruptions, the future diminished external demand and the potential imposition of NTB under the guise of safety concerns would exert more profound and lasting negativity It is therefore imperative to make a stronger effort to explore new market potentials and at the same time, make a concerted effort to form coalitions within the international community to guard against potential obstacles to trade In terms of agricultural import, it should be noted that the prospects for China’s importing from the world market toward the end of enhanced food security is still positive, with an even The impact of COVID-19 on China’s agri-trade 15 CAER 13,1 16 lower price in the world market for meat products manifest due to slower growth in world demand relative to supply In light of weak pork production due to ASF, along with the newly signed SUETA (in which agriculture, especially meat export, is a prime concern), agricultural trade in China should shift toward increasing meat importation As such, these factors will have profound implications for China’s future trade structure and its agricultural trading partners The COVID-19 pandemic continues to evolve to this day, and its full impact remains to be seen Therefore, the study presented so far in this paper should serve as an interim analysis providing, we hope, some forward-looking insights and potentially constructive research perspectives for further future studies Notes Short-term in this paper refers to the period immediately after the outbreak of the COVID-19 pandemic, while long-term refers to the period thereafter NTBs, especially prohibitive border measures imposed to China’s trade partners will play an important role in agricultural import However, it is observed that no adjustment had yet been emplaced for pork import in China since the outbreak of the pandemic, and NTBs are therefore not being considered in this study for simplicity and remain to be explored in future research Trade policy changes faced by China’s pork import in 2020 include: (1) The newly signed first phase of the Sino-US Economic and Trade Agreement (SUETA), implying an increase in agricultural import scale by no less than 12.5 billion USD and 19.5 billion USD in 2020 and 2021, respectively, from the 2017 base value (2) An announcement was made on February 6, 2020 stating that China will adjust the additional tariffs on imports from the United States with a value of roughly 75 billion USD to half the original tariff amount Additionally, China has implemented a provisional tax rate on frozen pork imports and the MFN tariff has been adjusted from the original 12%–8%, since January 1st 2020, which benefits more than 99% of China’s pork import (Tariff and Tariff Commission of the State Council, 2019, 2020) Since world’s pork price is usually referred to USDA average cost price of pork in IMF commodity price indices, the change of pork price of the United States therefore could be employed as a fair indicator of that of the world market References Agricultural Trade Promotion Center (2020a), How Should Agricultural Enterprises Survive the Attack from COVID-19?, (in Chinese), available at: ccpit.nanjing.gov.cn/jmzx/202004/t202004291854029 html (accessed 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to evaluate trade patterns and predict trade potentials, the gravity model has been applied in numerous specifications and contexts and is regarded as a leading empirical model in economics regarding international trade flow (McCallum, 1995; Anderson, 2011; Feenstra et al., 2001; Stay and Kulkarni, 2016; Lundmark, 2018) While realizing that it falls short of covering some fundamental parameters that reflect a wide range of economic linkages, such as consumer preference, production technologies, etc as does the CGE model, another powerful and commonly used trade model, we take advantage of this model in this study to disclose the complex mechanisms behind and decompose the specific effects of various factors, such as the decline of global demand, the increase of the number of SPS measures and compliance costs, etc., with a view to shedding light on pertinent policy implications (WTO, 2012) To examine the impact of the border measures on agricultural trade, we select the variables and set the gravity model following Baier and Bergstrand (2001), where domestic GDP representing internal supply capacity, foreign GDP reflecting the external import demand and transaction cost being reflected by distance, relative price, tariff and NTB The specific form of the model is as follows:  LnYijt ẳ ỵ Lngdpit ỵ Lngdpjt ỵ Lndistij ỵ Ln pit pjt ỵ Lnspsjt ỵ Lntariff jt ỵ fta ỵ ijt where i denotes exporting country (China), j denotes importing country and t denotes the year Yijt stands for total export value of agricultural products/vegetables/aquatic products of exporting country (China) to importing country (country j) in year t; gdpit is the economic development of country i in year t, while gdpjt represents economic development of country j in year t; distij the geographic distance between country i and country j; pit / pjt denote the ratio of the producer price index of the two countries in year t; spsjt means SPS notifications launched by country j to China’s agricultural products/vegetables/ aquatic products in year t Based on the fact that SPS measures are more commonly used to restrict the The impact of COVID-19 on China’s agri-trade 19 CAER 13,1 export of agricultural products, the number of SPS is used as an indicator to measure NTB; tariff indicates the tariffs imposed by country j on agricultural products/vegetables/aquatic products in China wto is used here to indicate WTO member-countries; fta indicates whether country i and country j have signed a free trade area agreement “1” denotes the signing of the free trade zone and its taking effect, while “0” means either not signing the free trade zone or signing it without its taking effect 20 Data Panel data have been used covering China and 159 export counterparts from year 2010 through 2018 The export data regarding agricultural products is from UN Comtrade; the GDP data is expressed by the constant USD price in 2010 and is from world development indicators Domestic and foreign GDP are used to measure the production capacity and import demand, respectively The distance between the two countries is expressed by the absolute distance between the capital Beijing and the capital of the export destination country, with data from CEPII database China’s producer price indexes come from the China Statistical Yearbook and the producer price indexes of the importing country come from the FAO Database The SPS and tariff data are from the WTO database and FTA data from the service network of China’s free trade area and the free trade area agreement signed Regression results The mixed OLS models are used to estimate the factors affecting the export of agricultural products and vegetables, and the random effects model is used to simulate the export equation of aquatic products The results are shown in Table It is shown from the results that the coefficients of GDP of import countries to China’s agricultural, vegetable and aquatic products exports are significantly positive at the level of 1% and the elasticities (abbreviated as εgdpj,) are 0.787, 0.860 and 1.155, respectively The coefficients are basically consistent with that measured by Wang and Wen (2016) at 0.696, using the countries along the Silk Road and with Hu and Huo (2008) and Zhang et al (2013), at 1.17 and 0.7629–0.7829, respectively The coefficient of domestic GDP is positive for exports in agricultural products in general, but with significantly negative sign for the export of vegetable products, which may be the result of rapid climbing of labor costs along with the income growth, for vegetable products in particular and the resultant decline in export competitiveness (Li et al., 2017) The coefficient of relative price index is negative for exports of agricultural products in general and for vegetable products, but statistically insignificant and positive for that of aquatic products It may be attributed to the quality preference of those importing markets, composed mainly of developed countries such as the European Union and the United States, over the imported aquatic products, as revealed also by Wei and Lin (2017) Lny1 Table Gravity model regression results of China’s agricultural exports Lnyveg2 Lnyaqu3 lngdpi 0.404* (0.241) À1.163*** (0.362) 1.286*** (0.216) 0.787*** (0.0245) 0.860*** (0.0314) 1.155*** (0.110) lngdpj lndis À0.684*** (0.0738) À0.785*** (0.107) 0.427 (0.398) À0.0599 (0.0682) À0.702*** (0.104) 0.0597 (0.132) ln(pi/pj) lnsps À0.138*** (0.0339) À0.229*** (0.0877) À0.0614 (0.0678) Lntariff – À0.0678 (0.0746) À0.254 (0.211) Wto 0.333*** (0.0820) – – fta 0.755*** (0.118) 1.392*** (0.178) 0.0375 (0.299) Constant À8.064 (7.222) 35.33*** (10.82) À55.27*** (7.272) Observations 959 779 722 R-squared 0.655 0.611 112 Note(s): 1Refers to agricultural products; 2Refers to vegetables, 3Refers to aquatic products The coefficient Z statistic is indicated in brackets; *, **, *** Significant at the 10, and percent levels Source(s): Authors’ calculation The coefficients of SPS to agricultural, vegetable and aquatic products (abbreviated as εspsj) are À0.138, À0.229 and À0.0614, respectively, among which the first two coefficients are significant at the level of 1% The relative cost (abbreviated as εprice) at home and abroad has a negative estimation elasticity in agricultural and vegetable product export models, À0.0599 and À0.702, respectively Baier and Bergstrand (2001) used the trade data of OECD countries from 1958 to 1960 and 1986–1988 to measure the elasticity of domestic and foreign cost differences to exports as - 0.25, which also lands between the elasticity calculated in this paper The impact of COVID-19 on China’s agri-trade 21 Corresponding author Jing Zhu can be contacted at: crystalzhu@njau.edu.cn For instructions on how to order reprints of this article, please visit our website: www.emeraldgrouppublishing.com/licensing/reprints.htm Or contact us for further details: permissions@emeraldinsight.com ... Section is an exploration of the prospects of China’s agricultural imports in view of the pandemic’s various impacts; Section concludes COVID- 19 outbreak and potential impact on China’s agricultural. .. international organizations, (i.e WTO, The impact of COVID- 19 on China’s agri -trade Table Export restriction on and panic buying of food in major trading countries during the COVID- 19 pandemic (As of. .. States The impact of COVID- 19 on China’s agri -trade 13 CAER 13,1 (1) S1: assuming that the impact of COVID- 19 resulting in a price reduction of pork between 14 and 18%, other conditions as per

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