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Do state‐owned enterprises benefit more from China's cereal grain tariff‐rate quota regime?

Author

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  • Chaoping Xie
  • Jason H. Grant
  • Kathryn A. Boys

Abstract

In 2016, the United States launched a formal dispute with the World Trade Organization (WTO) concerning China's wheat, corn, and rice tariff‐rate quota (TRQs) administration. A formal panel was requested in August 2017, with several major grain exporters, including Canada, joining as third‐party members. This study employs two unique micro‐level datasets to investigate the role of state‐owned and non‐state‐owned enterprises’ (SOE and non‐SOE, respectively) in China's agricultural imports. Results suggest that SOEs are noticeably more active in importing quota‐bound commodities compared to quota‐free imported commodities. Moreover, the larger role of SOEs in China's cereal grain imports is negatively correlated with China's food security targets, as measured by estimated prior year stocks‐to‐use ratios. Conversely, above average food security targets in China's cereal grain market leads to an important extensive margin adjustment of non‐SOE import participation. Finally, we find very little compelling evidence that China's September reallocation of unused TRQ has any economic or statistically significant impact on non‐SOE entry into importing or the intensity with which their imports occur. En 2016, les États‐Unis ont lancé une plainte formelle avec l'Organisation mondiale du commerce (OMC) concernant l'administration par la Chine de contingents tarifaires pour le blé, le maïs et le riz. Un groupe spécial a été demandé en août 2017 et plusieurs grands exportateurs de céréales, y compris le Canada, se sont joints comme tierce partie. Cette étude utilise deux bases de données uniques pour étudier le rôle des entreprises d’État (entreprises publiques et non publiques) dans les importations agricoles de la Chine. Les résultats suggèrent que les entreprises d'État importent nettement plus de produits sous quotas que les produits importés sans quota. En outre, le rôle plus important des entreprises d'État dans les importations de céréales de la Chine présente une corrélation négative avec les objectifs de la Chine en matière de sécurité alimentaire, mesurés par les ratios stocks / utilisation de l'année précédente. Similairement, des objectifs de sécurité alimentaire supérieurs à la moyenne sur le marché chinois des céréales entraînent un important ajustement de la participation à l'importation des entreprises autres que les entreprises d'État. Finalement, nous trouvons très peu d’évidences que la réallocation par la Chine du contingent tarifaire inutilisé en septembre ait un impact économique ou statistiquement significatif sur l'entrée ou une augmentation de la participation au marché des importations par les firmes autres que les entreprises d'État.

Suggested Citation

  • Chaoping Xie & Jason H. Grant & Kathryn A. Boys, 2019. "Do state‐owned enterprises benefit more from China's cereal grain tariff‐rate quota regime?," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 67(4), pages 397-416, December.
  • Handle: RePEc:bla:canjag:v:67:y:2019:i:4:p:397-416
    DOI: 10.1111/cjag.12213
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    Cited by:

    1. Gale, Fred, 2021. "Potential Wheat Demand in China: Applicants for Import Quota," Economic Research Report 327188, United States Department of Agriculture, Economic Research Service.

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