China's Import Potential for Beef, Corn, Pork, and Wheat

• Published in: IDEAS Working Paper Series from RePEc
• Main Authors: Beckman, Jayson, Gale, Fred, Morgan, Stephen, Sabala, Ethan, Ufer, Danielle J, Valcu-Lisman, Adriana, Zeng, Wendy, Arita, Shawn
• Format: Paper
• Language: English
• Published: St. Louis Federal Reserve Bank of St. Louis 01.01.2022
• DOI: 10.22004/ag.econ.329067

China is one of the top importers of agricultural products, but it has nontariff measures that prevent its imports from growing even larger. In this report, the authors develop a quantitative framework to examine China’s import market potential using a price wedge approach—the difference between domestic and imported prices—for commodities that are imported by China. The report estimates the impact of removing these barriers for the four highest wedges using a global economic model. Domestic prices in China exceeded foreign prices (using the United States as an example) by large margins for the four commodities we considered, as follows: beef (58 percent), corn (64 percent), pork (213 percent), and wheat (42 percent). Estimates reveal that removing these price wedges could lead to more imports into China. Benefits would be widespread, increasing sales for producers in the United States and other exporting countries and yielding lower food prices for China’s consumers.