Analysis of agricultural trade in China based on the theory of factor endowment

Abstract

Purpose. The purpose of the paper is to present the results of the study of agricultural trade in China based on the theory of factor endowment and to develop a policy recommendation for the intensification of agricultural trade based on technological progress. Methodology / approach. This paper uses the methods of economic theory and comparative analysis to study the development of agricultural products trade in China; analysis the advantages of developing agricultural products trade in China by using comparative advantage theory; and econometric analysis to study the relationship between volume of agrarian trade and agricultural labor force, capital and land resources. Results. This paper uses time series data to analyze the three elements of capital, labor and land, and the development of agricultural trade in China. According to the established data model, it is obviously that China’s agricultural production of land factor endowment constraints are obvious, labor factor endowment is abundant but also facing the problem of increasing costs, labor personnel gradually decline. In this case, technological progress is more critical to the cultivation and maintenance of comparative advantage of agricultural products. The government should guide the direction of technological changes, technical support, capital support (material capital and human capital); and promote the rapid development of China’s agricultural trade. Originality / scientific novelty. Author’s developed econometric model is very useful in empirical assessment for the China agricultural products trade development, and it also provides new decisions for China to develop agricultural trade. Accordingly, the proposed method can provide an answer to the question of how to develop traditional agriculture in the context of rapid economic changes, and put forward more practical countermeasures. Practical value / significance. The main proposals can be used by the Government of China to formulate better agricultural trade policies and achieve rapid economic growth and increasing farmer incomes.