Impact of trade cost on grain import demand of China

ObjectiveEmpirical analysis on short-term and long-term effects of trade cost on Chinese grain import demand function was conducted to provide theoretical reference for grain security,grain production and international grain trade of China from the perspective of trade cost.MethodBased on Marshall demand function,demand function of grain import in China was established adding trade cost factor. Based on grain import data of China from 1993 to 2015, empirical analysis was conducted on demand function of traditional import demand function and import demand function adding trade cost variable.ResultGrain import demand of China had long-term and short-term cointegration relations on income,relative price and trade cost. In the long run,the impact of trade costs on soybean import demand of China was great,while the impact of import demand on wheat,maize and rice small. In the short term,the impact of trade costs on various types of grain import demand,especially on corn and soybean import demand was particularly obvious.Sugges-tionFollowing suggestions are proposed:coping with the relationship between grain imports and national grain security;reducing the cost of grain production in order to better meet the domestic grain needs; implementing the diversification strategy of grain import to scatter grain import concentration;reducing trade costs to better make use of international grain market and meet the domestic grain supply and demand gap.