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The effects of soybean trade policies on domestic soybean market in China during the food crisis

Author

Listed:
  • Lin Sun
  • Mingxian Qi
  • Michael R. Reed

Abstract

Purpose - Many grain exporting/importing countries implement temporary trade policies to intervene in grain trade volume during food crises. The purpose of this paper is to analyze the effects of Chinese soybean trade policies on the domestic soybean market during the food crisis. Design/methodology/approach - A Markov switching error correction model is constructed for the empirical analysis. Market integration, market equilibrium and market stability are compared among three regimes: the normal state, crisis state and post-crisis state. In order to reduce the disturbance from external markets factors on the results, the US soybean market is selected as a control group in that it did not use any soybean intervention trade policies during the food crisis. Findings - The empirical results indicate that China’s temporary soybean trade policies lead to a decrease in market integration between domestic and international soybean markets and a reduction in domestic soybean market stability. Originality/value - It is the first time that China’s soybean market is selected as a sample and case on this issue. The regime shifting non-linear model could be more applicable because there exists a non-linear transmission relationship between grains markets during food crises. The results imply that China’s temporary soybean trade policies do not improve market integration and stability. China should reconsider implementing soybean trade intervening policies to protect the domestic market and safeguard food security.

Suggested Citation

  • Lin Sun & Mingxian Qi & Michael R. Reed, 2018. "The effects of soybean trade policies on domestic soybean market in China during the food crisis," China Agricultural Economic Review, Emerald Group Publishing Limited, vol. 10(3), pages 372-385, July.
    • Handle: RePEc:eme:caerpp:caer-04-2016-0061
    DOI: 10.1108/CAER-04-2016-0061
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    Citations

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    Cited by:

    1. Zemin Zhang & Changhe Lu, 2020. "Clustering Analysis of Soybean Production to Understand its Spatiotemporal Dynamics in the North China Plain," Sustainability, MDPI, vol. 12(15), pages 1-15, July.
    2. Pradita Nareswari & Sigit S. Wibowo, 2020. "Global and Local Commodity Prices: A Further Look at the Indonesian Agricultural Commodities," Capital Markets Review, Malaysian Finance Association, vol. 28(1), pages 65-76.
    3. Troncoso Sepúlveda, Ricardo, 2019. "Transmisión de los precios del arroz en Colombia y el mundo," Revista Lecturas de Economía, Universidad de Antioquia, CIE, issue 91, pages 151-179, July.
    4. Wenguang Chen & Bangbang Zhang & Xiangbin Kong & Liangyou Wen & Yubo Liao & Lingxin Kong, 2022. "Soybean Production and Spatial Agglomeration in China from 1949 to 2019," Land, MDPI, vol. 11(5), pages 1-17, May.
    5. Wang, Lu & Wu, Rui & Ma, WeiChun & Xu, Weiju, 2023. "Examining the volatility of soybean market in the MIDAS framework: The importance of bagging-based weather information," International Review of Financial Analysis, Elsevier, vol. 89(C).
    6. Ricardo Troncoso-Sepúlveda, 2019. "Price transmission of rice in Colombia and the world," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 91, pages 151-179, Julio - D.
    7. Zheng, Xuyun & Pan, Zheng, 2022. "Responding to import surges: Price transmission from international to local soybean markets," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 584-597.

    More about this item

    Keywords

    Food crisis; Markov regime switching model;

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