Empirical analysis of agricultural trade between EU and China: Explanation behind China's growing agrifood imports

This study attempts to identify and measure quantitatively the effects of changing economic environment and trade policies on China’s agricultural imports from the EU as well as globally. The approach is to model behavioural relationships in the agricultural trade between China and the EU by using annual trade data from 1986 to 2005. The results indicate that Chinese agricultural imports are relatively inelastic to absolute price changes, but relative price changes significantly affect the market shares of EU exports due to price competition. Trade liberalisation in the form of tariff reductions is trivial in changing the quantity of China’s agricultural imports from the EU. China’s growing agrifood imports has been fuelled by rapid income growth of its population.