Empirical Study on Impact of China's Economic Growth on Agricultural Trade

The proposal of"Belt and Road Initiative"has brought greater opportunities for the development of China's agricultural trade,but in recent years,China's agricultural trade deficit has shown a trend of gradually expanding.Based on the data of seven years from 2012 to 2018,this paper empirically analyzes the agricultural trade effect of China's economic growth.It is concluded that the consumption effect of agricultural trade in China's economic growth is anti-trade biased,the production effect and comprehensive effect of agricultural trade are pro-trade biased,and China's terms of trade of agricultural products tend to improve.This paper puts forward some relevant suggestions from the aspects of export structure,production mode,agricultural product processing,logistics mode,e-commerce system,inspection and quarantine and so on.

Past Successes and New Challenges:China's Foreign Trade at a Turning Point

Since 1979, China has recorded a remarkable trade performance, which has been driven by international processing and the offshoring strategies of foreign firms. The diversification of Chinese exports and their technological upgrading have been phenomenal However, there is also inertia, illustrated by the persistent dualism of the trade sector, the unrelenting specialization in downmarket products and the deteriorating terms of trade. These weaknesses have helped its partners to adjust to the rise of this new trade power. In the past decade, China＇s economy has faced the adverse effects o fan export-led growth and the global crisis has revealed its vulnerability. China is now forced to rebalance its economy. This will imply major changes in foreign trade, in favor of ordinary trade and away from processing. In the foreseeable future, China is unlikely to become the driver of international demand but will remain the engine of Asian economic integration.

Productivity Shocks and Monetary Policy in a Two-Country Model

In this paper, we examine the effects of foreign productivity shocks on monetary policy in a symmetric open economy. Our two-country model incorporates the New Keynesian features of price stickiness and monopolistic competition based on the cost channel of Ravenna and Walsh （2006）. In particular, in response to asymmetric productivity shocks, firms in one country achieve a more efficient level of production than those in another economy. Because the terms of trade are directly affected by changes in both economies＇ output levels, international trade creates a transmission channel for inflation dynamics in which a deflationary spiral in foreign producer prices reduces domestic output. When there is a decline in economic activity, the monetary authority should react to this adverse situation by lowering the key interest rate. The impulse response function from the model shows that a productivity shock can cause a real depreciation of the exchange rate when economies are closely integrated through international trade.