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Exchange Rates, Income Growth, and Chinese Agricultural Imports

S.L. Wang, C. Hong and William Liefert ()

No 275979, 2018 Conference, July 28-August 2, 2018, Vancouver, British Columbia from International Association of Agricultural Economists

Abstract: Using disaggregated data describing trade between China and the rest of the world over the period of 2002-2015, this paper estimates the impacts of changes in China’s real exchange rate and income growth on Chinese agricultural imports. We find that exchange rate and income matters for Chinese agricultural imports over all. A 10 percent annual appreciation of the RMB is found to raise China’s total agricultural imports by about 0.4 percent, and a 10 percent real GDP growth will raises these imports by 7 percent. We further estimate these effects to subcategories of bulk, intermediate, and consumer-ready goods, as well as individual agricultural products. There is much variation in response across different agricultural product groups as well as individual products. We tend to get expected signs for elasticities for non-strategically important products that do not conflict with China’s self-sufficiency policies and are in short-supply. Government interventions in the markets mitigate the impact of exchange rate fluctuation on these products.

Keywords: Agricultural Finance; International Relations/Trade (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cna and nep-tra
Date: 2018-07
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Working Paper: Exchange Rates, Income Growth, and Chinese Agricultural Imports (2017) Downloads
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