The Measurement of Chinese Agricultural Product Trade Cost and Its Impact on Trade Growth

Using a revised micro-founded gravity model based on the framework in Novy (2011), this paper measures the agricultural product trade costs between China and its major trading partners and analyzes its impact on the trade growth in the period of 1996-2011. The results shows: The tariff equivalent bilateral agricultural product trade costs between China and its major trading partners have a decreasing trend, and after China's accession to WTO, the bilateral trade costs decline more markedly. The growth of China's agricultural trade growth is mainly due to the growth of income and the decline in bilateral trade costs.