Empirical Analysis of the Structure of Sino-US Agricultural Trade

This paper empirically analyzes the structure of agricultural trade between China and the USA from 1996 to 2005, using different trade indexes such as the Grubel-Lloyd Index, the Revealed Comparative Advantage Index, the Finger-Kreinin Similitude Index and the Export Diversification Index, with a focus on the issues impeding Sino-US agricultural trade. We found that over the period of 1996 to 2005, inter-industry trade outweighed intra-industry trade in Sino-US agricultural trade, and that bilateral trade was more complementary than competitive. At the same time, China's agricultural exports were more diversified than USA exports, but China's degree of diversification steadily declined during the sample period. The findings indicate that there exists great potential for further development of agricultural trade between China and the USA, and that positive and effective trade policies will result in maximization of potential agricultural trade development and will bring forth mutual benefits to both countries. Copyright 2007 Institute of World Economics and Politics, Chinese Academy of Social Sciences.