The global trading environment has experienced a significant transformation with the establishment of the World Trade Organization (WTO) and the growing prevalence of Regional Trade Agreements (RTAs). In line with this global trend, China, which joined the WTO in 2001, had signed 16 RTAs with 24 countries and regions by 2018. Furthermore, in 2013, the Chinese government launched the Belt and Road Initiative (BRI), aimed at fostering regional integration and economic growth through extensive infrastructure projects and trade liberalization agreements (Huang, 2016; Zhao et al., 2024). Despite growing global integration, trade continues to be shaped by border effects – the restrictive impact of national and geographic boundaries on trade flows, particularly in the sensitive agricultural sector. To explore this issue, this study analyzes how border effects shape China’s agricultural trade and examines the impact of RTAs and the BRI on trade dynamics.
This study employs a gravity model to examine the impact of border effects on agricultural trade between China and its 36 trading partners, including Brazil, Japan, South Korea, the European Union and the United States, over the period from 2001 to 2018.
The results indicate that China’s border effects on agricultural imports and exports are asymmetric, with import border effects being larger than export border effects. From 2002 to 2018, these border effects have generally declined, reflecting reduced trade frictions and deeper integration into the global market. Additionally, country-specific border effects reveal that the greater a country’s reliance on agricultural imports from its trading partner, the lower its border barriers tend to be. While RTAs and the BRI have positively influenced trade, the persistently high border effects observed in some participating countries suggest that factors beyond trade agreements play a crucial role in shaping trade barriers.
Asymmetric border effects underscore the need for a country-specific policy approach that effectively addresses these disparities. To further reduce border effects and foster trade, efforts should focus not only on lowering tariff and non-tariff barriers through policy factors but also on addressing non-policy factors such as home bias, which can hinder cross-border trade expansion.
