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Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders

  • Zhigang Li

    (University of Hong Kong)

  • Xiaohua Yu

    (Georg-August-University Göttingen)

  • Yinchu Zeng

    (Renmin University of China)

  • Rainer Holst

    (Georg-August-University Göttingen)

Using a unique survey data on agricultural traders in China in 2004, this study provides direct evidence on the significance of inter-regional trade barriers and their key components. Our major findings are as follows. (1) The trade barriers within China are fairly small, accounting for about 20 percent of trade value. (2) Transport and non-transport costs respectively contribute 42% and 58% to the trade barriers. (3) Labor and transport-related taxes are the two largest proportions of total transport costs, and respectively accounts for 35% and 30%. (4) Artificial trade barriers created by the government are not sizable as we perceived. (5) Road quality is crucial for reducing transport costs within China: Increasing transport speed by 1 km per hour, the total transport costs for Chinese agricultural traders would decrease by 0.6 percent mainly due to improved fuel-burning efficiency and reduced labor requirement.

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File URL: http://www2.vwl.wiso.uni-goettingen.de/courant-papers/CRC-PEG_DP_112.pdf
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Paper provided by Courant Research Centre PEG in its series Courant Research Centre: Poverty, Equity and Growth - Discussion Papers with number 112.

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Date of creation: 16 May 2012
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Handle: RePEc:got:gotcrc:112
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