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

Author

Listed:
  • Zhigang Li

    (University of Hong Kong)

  • Xiaohua Yu

    (Georg-August-University Göttingen)

  • Yinchu Zeng

    (Renmin University of China)

  • Rainer Holst

    (Georg-August-University Göttingen)

Abstract

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.

Suggested Citation

  • Zhigang Li & Xiaohua Yu & Yinchu Zeng & Rainer Holst, 2012. "Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders," Courant Research Centre: Poverty, Equity and Growth - Discussion Papers 112, Courant Research Centre PEG.
    • Handle: RePEc:got:gotcrc:112
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    2. Li, Han & Li, Zhigang, 2013. "Road investments and inventory reduction: Firm level evidence from China," Journal of Urban Economics, Elsevier, vol. 76(C), pages 43-52.
    3. Li, Qingxiao & Yang, Jinyang & Yang, Xiaoli & Mu, Endong, 2025. "Decompose food price disparities in China: Evidence from wholesale markets," Food Policy, Elsevier, vol. 131(C).
    4. Yuan, Hang & Wang, Kun & Yang, Hangjun, 2022. "Rail's efficiency gain by separating affiliated businesses and its impact on product mix of export by rail," Transport Policy, Elsevier, vol. 115(C), pages 126-140.
    5. Xiaoheng Zhang & Ping Qing & Xiaohua Yu, 2019. "Short supply chain participation and market performance for vegetable farmers in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 63(2), pages 282-306, April.
    6. Imran Ur Rahman & Mohsin Shafi & Liu Junrong & Enitilina Tatiani M.K. Fetuu & Shah Fahad & Buddhi Prasad Sharma, 2021. "Infrastructure and Trade: An Empirical Study Based on China and Selected Asian Economies," SAGE Open, , vol. 11(3), pages 21582440211, July.
    7. Jin, Gang & Yu, Binbin & Shen, Kunrong, 2021. "Domestic trade and energy productivity in China: An inverted U-shaped relationship," Energy Economics, Elsevier, vol. 97(C).
    8. Li, Zhigang & Chen, Yu, 2013. "Estimating the social return to transport infrastructure: A price-difference approach applied to a quasi-experiment," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 669-683.
    9. Yu Qin, 2016. "China's Transport Infrastructure Investment: Past, Present, and Future," Asian Economic Policy Review, Japan Center for Economic Research, vol. 11(2), pages 199-217, July.
    10. Xuechao Sui & Xianhui Geng, 2021. "Continuous usage intention to e-transaction cards in wholesale markets of agriproducts: empirical evidence from China," Future Business Journal, Springer, vol. 7(1), pages 1-13, December.
    11. Qing Zhang & Juan Li & Tiaojun Xiao, 2022. "Contract design for technology sharing between two farmers," Annals of Operations Research, Springer, vol. 314(2), pages 677-707, July.
    12. Li, Zhigang & Wu, Mingqin & Chen, Bin R., 2017. "Is road infrastructure investment in China excessive? Evidence from productivity of firms," Regional Science and Urban Economics, Elsevier, vol. 65(C), pages 116-126.
    13. Robert Holzmann & Richard Hinz & David Tuesta, 2012. "Early Lessons from Country Experience with Matching Contribution Schemes for Pensions," Working Papers 1231, BBVA Bank, Economic Research Department.
    14. Ma, Kai & Zhao, Lei, 2024. "The impact of new energy transportation means on China's food import," Research in Transportation Economics, Elsevier, vol. 103(C).
    15. Li, Yuheng & Gao, Guangya & Wen, Jiuyao & Zhao, Ning & Du, Guoming & Stanny, Monika, 2025. "The measurement of agricultural disaster vulnerability in China and implications for land-supported agricultural resilience building," Land Use Policy, Elsevier, vol. 148(C).
    16. Steffen, Christoph & Yu, Xiaohua, "undated". "Transaction Costs and Food Prices in Rural Kenya," Department of Agricultural and Rural Development (DARE) Discussion Papers 274537, Georg-August-Universitaet Goettingen, Department of Agricultural Economics and Rural Development (DARE).
    17. Liu, Xiaolu & Zhang, Yumei & Lan, Xiangmin & Si, Wei, 2025. "Can reducing agricultural trade costs foster the transformation of the agrifood system? Evidence from China," China Economic Review, Elsevier, vol. 91(C).
    18. Rubo Zhao & Yixiang Tian & Ao Lei & Francis Boadu & Ze Ren, 2019. "The Effect of Local Government Debt on Regional Economic Growth in China: A Nonlinear Relationship Approach," Sustainability, MDPI, vol. 11(11), pages 1-22, May.

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    Keywords

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    JEL classification:

    • N7 - Economic History - - Economic History: Transport, International and Domestic Trade, Energy, and Other Services
    • L91 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Transportation: General
    • Q13 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Markets and Marketing; Cooperatives; Agribusiness

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