Competitiveness and complementarity of agricultural products between Thailand and China on a short-term basis
-
DOIhttp://dx.doi.org/10.21511/ppm.20(3).2022.34
-
Article InfoVolume 20 2022, Issue #3, pp. 425-436
- Cited by
- 859 Views
-
331 Downloads
This work is licensed under a
Creative Commons Attribution 4.0 International License
China and Thailand belong to Regional Comprehensive Economic Partnership countries, and agricultural trade is vital to Thailand’s economy. Competition in agricultural trade between countries is fierce. Therefore, it is crucial to understand the advantages and disadvantages of agricultural trade between Thailand and China. Complementarity and competitiveness of international business show the benefits and drawbacks of cross-border exports and the trend of future exports. This study uses quantitative techniques to analyze the agricultural trade between Thailand and China. It employed four methods, including the calculations of the Grubel-Lloyd index, revealed comparative advantage index (RCA), trade intensity index (TII), and trade complementarity index (TCI). The result of method 1 indicates that Thailand’s agricultural trade has a more substantial competitive advantage (three years average RCA = 1.69 > 1.25) than China (three years average RCA = 0.37 < 0.8) from 2017 to 2019; they are complementary in specific categories of agricultural products. The result of method 2 indicates that items 03, 07, 13, and 14 of China’s exports and Thailand’s imports have strong complementarity. Items 10, 11, 17, and 19 of Thailand’s exports and China’s imports have strong complementarity. The result of method 3 indicates that the positive factor on bilateral trade flow is significant. The result of method 4 indicates that items 06, 07, 12, 19, 20, and 21 have advantages in intra-industry trade, and items 09, 10, 13, and 18 have advantages in inter-industry trade. The paper has important implications for Thailand’s government to formulate relevant trade policies to enhance its agricultural export competitiveness, which is also conducive to developing bilateral agricultural trade.
- Keywords
-
JEL Classification (Paper profile tab)F14, Q13, Q17
-
References44
-
Tables5
-
Figures5
-
- Figure 1. Thailand’s GDP per year from 2010 to 2019
- Figure 2. China’s GDP per year from 2010 to 2019
- Figure 3. China’s export of goods to Thailand from 2010 to 2019
- Figure 4. Thailand’s export of goods to China from 2010 to 2019
- Figure 5. China-Thailand trade deficit from 2010 to 2019
-
- Table 1. HS12 classification of agricultural products
- Table 2. Revealed comparative advantage (RCA) index of Thailand and China agricultural exports (2017, 2018, and 2019)
- Table 3. TCI index based on China’s export and Thailand’s import, and Thailand’s export and China’s import (2017, 2018, and 2019)
- Table 4. Trade intensity index (TII) based on China’s export to Thailand and Thailand’s export to China (2017, 2018, and 2019)
- Table 5. GL index based on HS01-HS24 (2017, 2018, and 2019)
-
- Balassa, B. (1965). Trade liberalisation and “revealed” comparative advantage. The Manchester School, 33(2), 99-123.
- Bojnec, Š., & Fertő, I. (2015). Agri-food export competitiveness in European Union countries. JCMS: Journal of Common Market Studies, 53(3), 476-492.
- Brown, A. J. (1947). Aspects of the World Economy in War and Peace. Applied Economics, 12.
- Cooper, R. G., & Kleinschmidt, E. J. (1985). The impact of export strategy on export sales performance. Journal of International Business Studies, 16(1), 37-55.
- Drysdale, P. (1967). Japanese Australian trade: an approach to the study of bilateral trade flows (Thesis). Australian National University.
- Egger, H., Egger, P., & Greenaway, D. (2007). Intra-industry trade with multinational firms. European Economic Review, 51(8), 1959-1984.
- Ekanayake, E. M., Mukherjee, A., & Veeramacheneni, B. (2010). Trade blocks and the gravity model: A study of economic integration among Asian developing countries. Journal of Economic Integration, 25(4), 627-643.
- Fang, X., & Zhu, M. (2013). An empirical study on the measurement of trade facilitation degree in China and ASEAN countries and its impact on exports. Journal of International Trade, 9, 68-73. (In Chinese).
- Franke, G. (1991). Exchange rate volatility and international trading strategy. Journal of international money and finance, 10(2), 292-307.
- General Administration of Customs of PRC. (2022a). ASEAN has become China’s top trader in 2021. (In Chinese).
- General Administration of Customs of PRC. (2022b). China-Thailand Customs Sign AEO Mutual Recognition Action Plan. (In Chinese).
- Grubel, H. G., & Lloyd, P. J. (1971). The empirical measurement of intra-industry trade. Economic Record, 47(4), 494-517.
- Hoang, V. V. (2020). Investigating the agricultural competitiveness of ASEAN countries. Journal of Economic Studies, 47(2), 307-332.
- Kawai, M., & Takagi, S. (2005). Strategy for a regional exchange rate arrangement in East Asia: analysis, review and proposal. Global Economic Review, 34(1), 21-64.
- Kojima, K. (1962). World Economy and Japan’s Foreign Trade. Tokyo: Keisé-Shobb.
- Kuang, Q., & Tang, J. (2012). An analysis of trade competitiveness and complementarity of agricultural products between China and Thailand. Theoretical Investigation, 5, 82-86. (In Chinese).
- Lamb, R. L. (2000). Food crops, exports, and the short-run policy response of agriculture in Africa. Agricultural Economics, 22(3), 271-298.
- Li, X., & Li, M. (2021). Research on the Competitiveness and Complementarity of China-Thailand Agricultural Trade under the Background of “One Belt and One Road”. Decision-Making & Consultancy, 6, 65-70. (In Chinese).
- Mayes, D. G. (1978). The effects of economic integration on trade. JCMS: Journal of Common Market Studies, 17(1), 1-25.
- Ministry of Agriculture and Rural Affairs of PRC. (2020). 2019 China Import and Export. (In Chinese).
- Nicita, A. (2013). Exchange rates, international trade and trade policies. International Economics, 135-136, 47-61.
- Nidhiprabha, B. (2019). Impacts of the US-China trade war on ASEAN: Case of Thailand. Asian Economic Papers, 18(3), 166-188.
- Nouira, R., Plane, P., & Sekkat, K. (2011). Exchange rate undervaluation and manufactured exports: A deliberate strategy? Journal of Comparative Economics, 39(4), 584-601.
- Petrović, P., Antevski, M., & Vesić, D. (2008). The international competitiveness and economic integration. Facta Universitatis Series: Economics and Organization, 5(1), 1-8.
- Pöyhönen, P. (1963). A tentative model for the volume of trade between countries. Weltwirtschaftliches Archiv, 90, 93-100.
- Ricardo, D. (1821). On the principles of political economy and taxation. London: J. Murray.
- Rivera-Batiz, L. A., & Romer, P. M. (1991). Economic integration and endogenous growth. The Quarterly Journal of Economics, 106(2), 531-555.
- Siah, K. L., Choong, C. K., & Yusop, Z. (2009). AFTA and the Intra-trade patterns among ASEAN-5 Economies: Trade-Enhancing or trade-inhibiting? International Journal of Economics and Finance, 1(1), 117-126.
- Smith, A. (1776). An inquiry into the nature and causes of the wealth of nations. London: Clarendon Press.
- The United Nations. (n.d.). The United Nations Commodity Trade Statistics Database.
- The World Bank. (n.d.). World Bank national accounts data, and OECD National Accounts data files.
- Thom, R., & McDowell, M. (1999). Measuring marginal intra-industry trade. Weltwirtschaftliches Archiv, 135, 48-61.
- Tinbergen, J. (1962). Shaping the world economy; suggestions for an international economic policy. New York: The Twentieth Century Fund.
- Wang, X., & Wang, J. (2018). Analysis of China-US Agricultural Trade Structure. Finance and Accounting for International Commerce, 8, 18-23. (In Chinese).
- Wei, H. (2021). 2021 China Import Development Report was officially released: China has made a huge contribution to the growth of world imports. China’s Foreign Trade, 12, 29-31. (In Chinese).
- Xie, J., & Yue, J. (2011). An Empirical Analysis of the Impact of Trade Facilitation on China-ASEAN Trade. World Economy Studies, 08, 81-86+89. (In Chinese).
- Yamazawa, I. (1970). Intensity analysis of world trade flow. Hitotsubashi Journal of Economics, 10(2), 61-90.
- Yang, X., & Wang, D. (2005). Analysis of Sino-Russian Trade Complementarity. World Economy Studies, 07, 71-77.
- Zhang, F. (2021). Competitiveness or complementarity: Analysis of agricultural trade between China and Brazil. Problems and Perspectives in Management, 19(4), 258-269.
- Zhang, H., & Tang, H. (2017). Research on the trade connection between China and the regions along the “Belt and Road” – Analysis based on the trade intensity index model. International Economics and Trade Research, 03, 27-40. (In Chinese).
- Zhang, Y., & Yu, J. (2018). Transportation Infrastructure, Adjacency Effect and Bilateral Trade: An Empirical Study Based on Trade Data between China and “One Belt, One Road “Countries. Contemporary Finance & Economics, 03, 98-101. (In Chinese).
- Zhao, Y., & Lin, G. (2008). Analysis of bilateral agricultural product trade flow and trade potential between China and 10 ASEAN countries – A study based on the trade gravity model. Journal of International Trade, 12, 69-77. (In Chinese).
- Zhou, L., & Zhan, Z. (2009). An empirical study on intra-industry trade of agricultural products between China and Thailand. International Business – Journal of University of International Business and Economics, 04, 41-46. (In Chinese).
- Zou, J., Liu, C., Yin, G., & Tang, Z. (2015). The trade pattern and economic contribution between China and the countries along the “Belt and Road”. Progress in Geography, 05, 598-605. (In Chinese).