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Agricultural Trade Effects of China’s Free Trade Zone Strategy: A Multidimensional Heterogeneity Perspective

Author

Listed:
  • Huasheng Zeng

    (Business School, Yangzhou University, Yangzhou 225009, China
    College of Agriculture, Yangzhou University, Yangzhou 225009, China)

  • Yue Yan

    (Business School, Yangzhou University, Yangzhou 225009, China)

  • Ling Tao

    (Business School, Yangzhou University, Yangzhou 225009, China)

  • Yuxi Luo

    (School of Economics and Management, Guangxi Normal University, Guilin 541006, China)

Abstract

The purpose of this work is to investigate the varied effects of China’s free trade zone (FTZ) strategy on agricultural trade and its underlying mechanisms. This work utilizes the propensity score matching–staggered difference-in-differences (PSM–Staggered DID) approach and synthetic control method (SCM) as its analysis methods. This study analyzes trade volume data between China and various countries alongside diverse economic indicators spanning from 1995 to 2020. The data sources include CEPII_BACI, the China Free Trade Zone Services website, the Penn World Tables, and the CEPII database. The novelty of this work lies in exploring the multidimensional heterogeneity of agricultural product trade effects in FTZs and their underlying mechanisms and extending the application of causal inference methods to the assessment of FTZs’ trade effects. Empirical analysis indicates that the establishment of FTZs with partner countries has contributed to the growth of China’s agricultural trade. The effects of agricultural trade resulting from China’s FTZ strategy exhibit multidimensional heterogeneity in the aspects of agreement terms, years, product categories, and network positions. Specifically, when it comes to the agreement terms, FTZs negotiated by China with broader scope, deeper terms, and stronger constraints have a more significant impact on agricultural trade due to the establishment of FTZs; in terms of years, the agricultural trade effects have gradually expanded over time; in terms of product categories, China has expanded its imports of primary agricultural products and semiprocessed agricultural products from partner countries, thus augmenting its exports of horticultural agricultural products and processed agricultural products. In terms of network positions, China, as a hub country, has greater agricultural trade effects than partner countries after the establishment of the FTZs. Finally, the paper proposes policy recommendations for optimizing the implementation strategy of FTZs.

Suggested Citation

  • Huasheng Zeng & Yue Yan & Ling Tao & Yuxi Luo, 2024. "Agricultural Trade Effects of China’s Free Trade Zone Strategy: A Multidimensional Heterogeneity Perspective," Agriculture, MDPI, vol. 14(3), pages 1-21, February.
    • Handle: RePEc:gam:jagris:v:14:y:2024:i:3:p:390-:d:1348735
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    References listed on IDEAS

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