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Mwinjimwila19800302 Graduation Thesis
Mwinjimwila19800302 Graduation Thesis
Mwinjimwila19800302 Graduation Thesis
Chinese name(中文名字):穆维拉
学号: 198003002
指导教师 :梁莹莹
2023 年 5 月 20 日
TABLE OF CONTENT
TABLE OF CONTENT....................................................................................ii
LIST OF FIGURES AND TABLES...................................................................iv
ABBREVIATIONS AND ACCRONYMS.............................................................v
Keywords.....................................................................................................vi
ABSTRACT.................................................................................................vii
CHAPTER ONE.............................................................................................1
INTRODUCTION...........................................................................................1
1.1 Background to the Study............................................................................1
1.2 Problem Statement.....................................................................................6
1.3 Research Objectives....................................................................................7
1.4 Significance of the Study............................................................................8
CHAPTER TWO............................................................................................9
LITERATURE REVIEW..................................................................................9
2.1 Theoretical Review......................................................................................9
2.2 Empirical Review......................................................................................10
2.3 Conceptual Research Model......................................................................15
CHAPTER THREE.......................................................................................16
RESEARCH METHODOLOGY......................................................................16
3.1 Research Designs.....................................................................................16
3.2 Data Collection.........................................................................................16
3.3 Data Analysis and Presentation................................................................16
CHAPTER FOUR.........................................................................................18
DATA ANALYSIS, RESULTS AND DISCUSSIONS...........................................18
4.1 Descriptive Statistics................................................................................18
4.2 Correlation...............................................................................................19
4.3 Stationarity Properties..............................................................................20
Figure 4.4.1 China export of vegetable, fruit nut food preparations to Russia.....19
KEYWORDS
Agricultural trade, Agriculture, Agri-food policy, Agri-food exports, Agricultural
markets, Agriculture in international trade.
ABSTRACT
Russia sees China as a key export target in the medium-term, and also an
important partner for developing agriculture in the Russian Far East. For its
part, China is seeking to reduce economic risks by expanding its import
sources, with Russia being one of its preferred suppliers. However, this
partnership is not without challenges, as there are various operational,
technical, and policy hurdles that could disrupt the agricultural and food
trade. Additionally, both countries prioritize self-sufficiency, which could limit
the potential for trade. Although China remains an expanding market for
Russian agricultural goods, concrete cooperation may be difficult to achieve
due to these obstacles
In recent years, China has been a major focus for Russia in terms of export
targets and investment opportunities. As such, it is seen as an important
partner for developing the agricultural sector in Russia's Far East. This region
has significant agricultural potential, including vast tracts of arable land,
abundant fresh water sources, and favorable climatic conditions. Therefore,
developing agriculture in this area has the potential to create jobs, boost the
local economy, and help Russia diversify its economy away from oil and gas.
However, despite the potential benefits of this partnership, there are several
hurdles that could disrupt the agricultural and food trade relationship between
the two countries. These include operational and technical issues related to
transportation, logistics, and quality control, as well as policy obstacles such
as differing regulatory frameworks and trade barriers. Moreover, both Russia
and China have prioritized self-sufficiency in food production, which could
limit the scope for trade.
Despite these challenges, China remains an expanding market for Russian
agricultural goods, particularly in areas such as soybeans, meat, and dairy.
However, concrete cooperation may be difficult to achieve given the complex
realities of the agricultural and food trade. As such, both countries will need to
work closely together to overcome these challenges and build a mutually
beneficial partnership in this sector.
CHAPTER ONE
INTRODUCTION
1.1 Background to the Study
Against the backdrop of the increasingly strained relationship between the
United States and China, a significant event occurred in June 2019, when the
leaders of Russia and China convened for a meeting. During this meeting, the
two nations elevated their bilateral relationship to a "comprehensive strategic
partnership of coordination in a new era," as stated in their joint statement. As
part of this agreement, Russia and China committed to expanding their
agricultural cooperation, specifically in the realm of soybean trade.
The fourth section analyzes the prospects and challenges of increased trade
cooperation in specific agricultural commodity and product groups, with an
emphasis on Russian exporters' access to Chinese markets. The chapter then
discusses broader structural barriers to deepening bilateral agri-food trade
before concluding with a medium-term outlook.
1.1.1 Bilateral Relations
The bilateral relationship between China and Russia in agricultural trade has
evolved significantly over the years, with both countries engaging in various
forms of cooperation to boost trade and enhance their agricultural sectors.
In recent years, Russia has emerged as a major exporter of agricultural
products to China, with the volume of agricultural trade between the two
countries growing steadily. In this article, we explore the evolution of the
agricultural trade relationship between China and Russia, the key agricultural
products involved in this trade, and the future outlook for this trade
relationship.
Evolution of the Agricultural Trade Relationship: China and Russia have had a
long-standing bilateral relationship in agricultural trade. The relationship
dates back to the 1950s, when the Soviet Union supplied China with food and
agricultural products to support its development. However, the relationship
between the two countries faced several challenges in the following decades,
including the dissolution of the Soviet Union, the collapse of the Chinese
agricultural sector in the 1960s, and the Sino-Soviet split in the 1970s.
Despite these challenges, China and Russia continued to engage in agricultural
trade, albeit at a limited scale. The relationship received a boost in the early
2000s, with the signing of the Sino-Russian Treaty of Good-Neighborliness,
Friendship and Cooperation in 2001. The treaty aimed to deepen the strategic
partnership between the two countries, including in the areas of agriculture
and trade.
Since then, China and Russia have engaged in various forms of agricultural
cooperation, including the exchange of agricultural technologies, expertise, and
trade. In recent years, Russia has emerged as a major exporter of agricultural
products to China, with the volume of agricultural trade between the two
countries growing steadily.
The main agricultural products that China imports from Russia include
soybeans, beef, pork, and wheat. In 2020, China imported agricultural
products worth $3.87 billion from Russia, with soybeans accounting for the
largest share of imports. The rising demand for soybeans in China, driven by
the country's growing meat consumption, has made Russia an important
supplier of this commodity.
In addition to imports, China and Russia have also set up joint ventures in the
agricultural sector. For instance, in 2018, a Chinese company signed an
agreement with a Russian agricultural firm to establish a joint venture focused
on soybean production. This joint venture is expected to increase Russia's
production of soybeans, which will then be exported to China.
The Future Outlook for the Agricultural Trade Relationship : The agricultural
trade relationship between China and Russia is expected to continue to grow in
the future, with both countries seeking to deepen their cooperation in this
sector. One area of focus is the development of infrastructure, such as railways
and ports, to facilitate the transportation of agricultural products between the
two countries.
Moreover, China and Russia have also signed several agreements aimed at
boosting bilateral agricultural trade. For example, in 2019, the two countries
signed a memorandum of understanding on agricultural cooperation, which
aims to increase cooperation in areas such as crop production, animal
husbandry, and food safety.
Despite the promising outlook for the agricultural trade relationship, there are
several challenges that both countries need to overcome. One challenge is the
impact of the ongoing trade conflict between China and the United States. The
trade war has created opportunities for Russian producers to fill certain niches
in the Chinese domestic market. However, these producers may be easily
squeezed out after the conflict is settled, as seen in the trade deal signed by the
US and China in early 2020, which requires China to double its purchases of
agricultural products in 2021 compared to 2017.
Another challenge is the need to address food safety concerns, which have
been a recurring issue in the agricultural trade relationship between China
and Russia. Both countries need to take steps to ensure the safety and it is
expected that the cooperation between China and Russia in the agricultural
sector will continue to grow in the future, driven by the increasing demand for
food and agricultural products in both countries. The two countries have a
complementary relationship in the agricultural sector, with Russia being a
major producer and exporter of agricultural products and China being a major
consumer and importer.
Moreover, as China aims to improve its food security and reduce its reliance on
imports, it may seek to further expand its agricultural cooperation with Russia.
For example, China may invest in Russian farmland and agricultural
infrastructure to secure a stable supply of agricultural products.
In addition to the economic benefits, deeper agricultural cooperation between
China and Russia could also have political implications. As the US and other
Western countries impose economic sanctions and trade restrictions on
Russia, China's willingness to engage in agricultural cooperation with Russia
could be seen as a sign of support and solidarity.
However, there are also challenges to deeper agricultural cooperation between
China and Russia. One challenge is the lack of mutual trust and
understanding between the two countries, which has hindered the
implementation of previous agreements and memoranda of understanding.
Moreover, differences in agricultural practices, standards, and regulations may
also pose a challenge to deeper cooperation. Furthermore, the ongoing COVID-
19 pandemic has also highlighted the vulnerability of global food supply
chains, which could further encourage China and Russia to strengthen their
agricultural cooperation and reduce their reliance on foreign imports.
The agricultural trade relationship between China and Russia has been
growing steadily in recent years, driven by increasing demand and
complementary strengths in the sector. Both countries have signed agreements
and set up joint ventures to deepen their cooperation, and this trend is
expected to continue in the future. However, challenges such as the lack of
mutual trust and understanding, and differences in agricultural practices and
regulations, may need to be addressed to fully realize the potential of
agricultural cooperation between the two countries.
Fig1.1
Agri-food exports from Russia to China show a steady increase since 2014, and
then a big jump in 2018 to just under $3 billion USD, a result of Russian
opportunism during the U.S.–China trade war (see Fig. 2). While China is the
largest export market for Russian agri-food products, Russia accounted for
only 2 percent of China’s agricultural imports in 2018, reflecting the overall
direction of economic dependency.18 Moreover, agriculture still represents a
rather small proportion of Russian exports to China, amounting to only 4.5
percent of the total in 2018.19 In the first half of 2020, Russian exports
increased to $1.9 billion USD worth of agricultural products, a pace that would
lead to a record level if maintained for the duration of 2020.20 Going forward,
there is ambition by both sides to raise the level of agricultural trade and
cooperation as part of the broader economic, political, and strategic
relationship under a so-called ‘new era’ of bilateral cooperation between China
and Russia. Given the attention of the highest political leadership, this means
that there is likely to be increased policy support for enhanced cooperation in
agricultural trade.
Fig1.2
The main Russian agricultural export to China during the past two decades
has consistently been fish and seafood. Exported largely as raw materials for
Chinese processing, these products consisted of up to over 90 percent of
Russian agricultural exports to China up until the early 2010s.21 Since then,
there has since then been some diversification in the structure of Russian agri-
food exports to China, particularly in the direction of oilseeds and fat products
as well as some processed foodstuffs. In 2018, fish and crustaceans accounted
for 59 percent of agri-food exports to China; oilseed and oilseed products 15
percent; and higher-value-added processed food products at 13 percent.22
Russian imports of Chinese agricultural goods, on the other hand, have
strongly reflected Chinese comparative strengths in labour-intensive goods
such as vegetables and fruits. In 2018, those two categories accounted for
nearly half of Chinese exports to Russia.
1.2 Problem Statement
Research Objectives
The main objective of this study is to establish the benefit of better agricultural
trade collaboration between China and Russia. The study will be guided by the
following specific objectives:
i. To investigate of the limited agricultural cooperation
eij ,t ÷e
BI ij ,t = j,t
Eij ,t ÷ E j ,t
Fig 4. 3
440.000
420.000
400.000
380.000
360.000
340.000
320.000
300.000
2012 2014 2015 2016 2017 2018 2019 2020 2021 2022
Fig 4.4.1 China export of vegetable, fruit nut food preparations to Russia data,
historical chart in billion USD
Source:TRADING ECONOMICS web site based on United Nations COMTRADE
database on international trade of 2022
China export of food to Russia value year
Jams, Fruit Jellies, Marmalades, Fruit or Nut Puree, Pastes $1.19M 2021
Tableau.4.4.2
Tableau.4.4 The most exported Chinese agricultural products to Russia in
2021 in Million USD
One of the main risks is the ongoing trade conflict between the United States
and China. While this conflict is creating opportunities for Russian producers
to fill certain niches in the Chinese domestic market, there is a risk that they
may be easily squeezed out once the conflict is settled. For example, the trade
deal signed by the US and China in early 2020 requires China to double its
purchases of agricultural products in 2021 compared to 2017. If China is able
to meet this requirement, it could significantly reduce its demand for Russian
agricultural products.
Another risk for Russia is the slowing down of the Chinese economy. China is
Russia's largest trading partner, and any significant economic downturn in
China could have a negative impact on Russian exports. In addition, as China
seeks to develop its own domestic supply chains for agricultural raw materials,
it may reduce its reliance on imports, including those from Russia.
Despite these risks, Russia's entry into the Chinese agricultural market is still
a promising development. In recent years, Russia has significantly increased
its exports of agricultural products to China, and this trend is likely to
continue. However, to ensure the long-term success of this trade relationship,
Russia will need to address the challenges posed by the ongoing trade conflict
and the potential for a slowdown in the Chinese economy.
Fig 4.5
Fig 4.5 Renminbi and Rubles exchange rates (per U.S. dollar)
Source: CEIC.
Russia's GDP in terms of PPP is projected to grow roughly 1.5-fold between
2016 and 2040, reaching $5.9 trillion. China's GDP in PPP terms, meanwhile,
is projected to grow roughly 2.2-fold during that window, reaching $47.4
trillion.
Fig 4.6
China's aging population will cause significant structural changes in the next
decade, with the senior citizen demographic having a greater economic impact
on consumer behavior. A segment of consumers is emerging in large cities that
are adjusting their spending in response to China's falling economic growth
rates and increasing costs of living. A population group representing 10% of all
respondents is focused on low prices and cost reduction rather than quality
and brand appeal.
However, consumption growth in China may be limited by a saturation factor,
with food spending decreasing from 50% to 25% since 2000. The spread of the
coronavirus COVID-19 has made China's economic growth prospects even
more uncertain, with restrictive measures potentially cutting solvent demand.
Therefore, China's food market may see structural changes in national diets,
with higher value added goods driving consumption growth.
These demographic processes will slow down urbanization, which has been the
main driver of rising consumer demand in China during the past few years.
Consumption increased mostly in cities, while the rural population remained
relatively poor. By 2019, urban citizens made up 60% of the country’s total
population.10 Urbanization is a factor in the rising demand for finished
products and high-value-added foods. However, in 2019, the urban population
growth rate in China was the lowest since 1996 (102.0%), and the rural
population has almost ceased to decline
China's aging population will cause significant structural changes in the next
decade, with the senior citizen demographic having a greater economic impact
on consumer behavior. A segment of consumers is emerging in large cities that
are adjusting their spending in response to China's falling economic growth
rates and increasing costs of living. A population group representing 10% of all
respondents is focused on low prices and cost reduction rather than quality
and brand appeal.
However, consumption growth in China may be limited by a saturation factor,
with food spending decreasing from 50% to 25% since 2000. The spread of the
coronavirus COVID-19 has made China's economic growth prospects even
more uncertain, with restrictive measures potentially cutting solvent demand.
Therefore, China's food market may see structural changes in national diets,
with higher value added goods driving consumption growth.
The data on consumer preferences and behavior in China and Russia
The share of food and agricultural imports to Russia generally decreased
during the observed period from 2017 to 2020.
2020 12.8%
2019 12.3%
2018 12.5%
2017 12.7%
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