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Author

Wenyan Yang

Document Type

Thesis - University Access Only

Award Date

1999

Degree Name

Master of Science (MS)

Department

Economics

First Advisor

Evert Van der Sluis

Abstract

China is one of the largest soybean producers in the world, but increases in its domestic demand for soybeans and soy products have made it become a net importer since the mid-1990s. In the process of becoming a net importer of raw and processed soybeans, China has switched from being a competitor of the United States in the international soy markets to one of its major customers of soybeans and soy products in less than a decade. The implementation of current global trade liberalization proposals will likely further affect international trade patterns in soybeans and soy products. One component of global trade liberalization involves China's potential membership in the World Trade Organization. In April of 1999, China offered substantial tariff reductions and quota increases on agricultural commodities as part of its negotiations to join the World Trade Organization. This thesis attempts to provide an empirical assessment of the impact of these trade liberalization policies on the world soybean trade. Particular attention is paid to the soy trade between the United States and China. Results of a nonlinear multi-commodity, multi-country spatial equilibrium model indicate that Chinese imports of processed soybeans would increase due to these policies, but the country's raw soybean imports would decrease. Conversely, U.S. exports of raw soybeans would decrease, but U.S. processed soybean exports would increase. Although the export mix may change, the United States would enjoy increased revenue due to the trade liberalization policies. The United States would stand to benefit directly from the increased soy meal and soy oil exports to China. The United States would also benefit indirectly from the additional economic activities associated with processing soybeans domestically prior to export. The results of the sensitivity analyses show that the own and cross price elasticities of demand and supply in China have relatively minor effects on the magnitude of the impacts of the policy shocks to the system.

Library of Congress Subject Headings

Soybean products
Free trade
Exports -- United States
China -- Foreign economic relations -- United States
United States -- Foreign economic relations -- China

Format

application/pdf

Publisher

South Dakota State University

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