An Analysis on Export Competitiveness of Vegetables from China to ASEAN

ShiweiWANG

College of Economics and Management，Huazhong Agricultural University，Wuhan 430070，China

1 Introduction

ASEAN is China's fastest growing export market of vegetables.During 1993-2013，China's vegetable exports to ASEAN increased from ＄0.085 billion to＄2.956 billion，an average annual growth rate of19.42%；ASEAN'smarket share of vegetables imported from China increased from 23.34%to 78.34%.Domestic and foreign scholars have carried out researches on the export competitiveness of agricultural products and vegetables.In terms of the vegetable trade war between China and Japan，Wang Lihe（2002）analyzes the international competitiveness of Chinese vegetables.Through survey and research of Chinese farmers and vegetable export and processing enterprises，he points out the competitive advantages of Chinese vegetable lie in the production and transportation，but there are problems in market development，product development，quality and other aspects.In terms of comparative advantages，Colin A.Carter and Li Xianghong（1999）use"comparative advantage index"tomeasure the change in trade of agricultural products in China during 1980-1996.B.Balassa（1965）introduced revealed comparative advantagewhich is an index used in international economics for calculating the relative advantage or disadvantage of a certain country in a certain class of goods or services as evidenced by trade flows.Although there are some flaws，it is consistentwith the improved revealed symmetric comparative advantage index（Liu Xue et al.，2002）.In terms of export competitiveness computing，Shuai Chuanmin et al.（2003）estimate the international competitiveness of Chinese agricultural products，and use CMSmodel to analyze the overall international competitiveness trends of China's agricultural products.The results show that the competitiveness of Chinese agricultural products gradually decreases，the agricultural export structure is not good，and themarket structure is simple，having affected the improvement of competitiveness.Zhang Qingzheng（2014）usesMS，RCA，TC and RC to analyze the Chinese agricultural trade，agricultural product structure and market structure.The results show that since 2002，the international competitiveness of China's agricultural products has declined，and some labor-intensive and resource-intensive agricultural products are at a competitive advantage，while land-intensive agricultural products are at a competitive disadvantage.This paper uses CMSmodel to study the competitiveness and makes a detailed analysis of vegetables to make the resultsmore detailed and more persuasive.

2 Research methods

When analyzing the export growth of vegetables from China to ASEAN，we use CMS（ConstantMarket Share）model.The CMS model assumption is that if the competitivenessof a certain kind of product in a country remainsunchanged in the exportmarket，then over time，itsmarket share also remains unchanged.On the basis of corrected CMSmodel，it is assumed that△Qirepresents the amount of change in export of vegetable product i from China to ASEAN during the base period to time t；△Q represents the amount of change in export of vegetable products from China to ASEAN during the base period to time t；Xi（t）represents China's exports of vegetable product i to ASEAN at time t；X（t）represents China's exports of vegetables to ASEAN at time t；Xi（0）represents China's exports of vegetable product i to ASEAN in the base period；X（0）represents China's exports of vegetables to ASEAN in the base period；nirepresents the annual average growth rate of ASEAN's imports of vegetable product i from theworld during the base period to time t；n represents the annual average growth rate of ASEAN's imports of vegetable products from the world during the base period to time t.Therefore，the change in export of vegetable product i can be expressed as：

Based on the above formula，China's total vegetable exports to ASEAN can be expressed as：

From the above formula，it can be found that the change in vegetable export from China to ASEAN includes three parts：（i）demand effect＝nX（0），namely China's vegetable export growth caused by ASEAN's total vegetable imports growth；structure effect＝∑［（ni-n）Xi（0）］，if the value is positive，it indicates that the types of vegetables exported to ASEAN can focus on those productswith high growth rates；if the value is negative，it is the other way around；competitiveness effect＝ ∑ ［Xi（t）-Xi（0）-niXi（0）］，namely the change in China's vegetable exports caused by the change in Chinese vegetable export competitiveness.

3 Empirical analysis

3.1 Current situation of vegetable export from China to ASEANSince the establishment of China-ASEAN Free Trade Area，the China-ASEAN vegetable trade has developed rapidly.The exports increased from＄85 million in 1993 to 2956 million in 2013，an average annual growth rate of19.42%；the volume of exports increased from 222 million kg in 1993 to 2399 million kg in 2013，an average annual growth rate of12.64%.Fig.1 shows that since China and 10 ASEAN countries signed China-ASEAN Comprehensive Economic Cooperation Framework Agreement in 2002，China and ASEAN have begun formal cooperation，and both the exports and volume of exports have shown an overall upward trend.The period 2002-2009 is the first phase of China-ASEAN cooperation.During this phase，tariffs began to significantly lower，the volume of export increased rapidly and exports grew steadily.The period 2009-2011 is the early second phase of China-ASEAN cooperation.In this phase，the FTA was fully completed，the vastmajority of agricultural products achieved zero tariffs and there was a rapid increase in export volume and exports.After China-ASEAN Free Trade Areawasestablished in 2010，this proportion reached 74.42%.In 2013，the world's vegetable exports to ASEAN reached＄3.773 billion，and China's vegetable exports to ASEAN accounted for 78.34%.Thus，it can be found that in recent years，China's position in ASEAN vegetablemarket has continued to improve and occupy themain vegetablemarket in ASEAN，and China has gradually become the primary vegetable exporter to ASEAN.

3.2 Analysis of China's competitiveness of vegetable export to ASEANBased on fluctuations in China-ASEAN vegetable exportvolume and establishmentof China-ASEAN Free Trade Area，it can be divided into three stages.The first stage（1993-2002）：before China-ASEAN cooperation；the second stage（2002-2009）：early implementation of the cooperation between China and ASEAN；the third stage（2009-2013）：establishment of China-ASEAN FTA，officially opening the trade cooperation.From Table 1，it can be found that the exports grew at the three stages.The exports at the first stagewere＄167.96million；from the second stage2002-2009，China and ASEAN began to cooperate，and the tariffs of some agricultural products such as vegetables began to lower，which greatly promoted vegetable trade between the two sides；at the third stage，China-ASEAN Free Trade Areawas formally established，andmostvegetablesachieved"zero tariff"，making the vegetable exports at the early stage steadily grow，and the contribution amount was＄1672.49.The trade growth at each stage arose from"demand effect，structure effect and competitiveness effect".Now we do further analysis.（i）Demand effect.As can be seen from Table 1，in the period 1993-2002，ASEAN had a small import demand for vegetables from China，and the demand effect only contributes＄5.38million to the overall effect，with the contribution rate of 3.20%，suggesting that during this period，the Chinese vegetableswere notadapted to the ASEAN market demand.During 2002-2009，ASEAN's demand effect of Chinese vegetables increased，with contribution amount of＄48.71 million and contribution rate of 4.37%，and the growth trend was not obvious.During 2009-2013，after China-ASEAN Free Trade Areawas established，the bilateral vegetable trade tariffs dropped significantly，and ASEAN expanded import of vegetables.In the case of Chinese vegetable exportsmaintaining the original share，the expansion of ASEAN's import scale increased the vegetable exports from China to ASEAN，with contribution amount of＄ 190.2 million and contribution rate of 11.37%.（ii）Structure effect.As can be seen from Table 1，in the period 1993-2009，the structure effect was＄ -0.88 million，indicating that the export product structure change impeded the growth of China's vegetable exports to ASEAN due to inadaptation to the ASEAN market.The contribution amountwas＄0.69 million during 2002-2009，showing that China's inadaptation to the structure of vegetable export to ASEANmarket slightly inhibited the growth，but with the continuously strengthened bilateral cooperation，this inhibitionwasgradually reduced，and itplayed a role in promoting export growth at this stage，with the contribution rate of 0.07%.During the period 2009-2013，the structure effect was greatly reduced，making Chinese vegetable exports to ASEAN reach ＄34.67 million，with the contribution rate of 2.07%.This result suggests that China should adjust the structure of vegetable varieties exported to ASEAN，otherwise it will not meet the changing variety needs of the ASEANmarket，thereby affecting the growth of China's vegetable exports to ASEAN.（iii）Competitiveness effect.From Table 1，we can see that the export competitiveness effect is the fastestgrowing factorwhichmakes the greatest contribution in the Chinese vegetable exports to ASEAN.During 1993-2002，the competitiveness of Chinese vegetables only contributed＄163.47million；during2002-2009，the competitiveness effect reached＄981.21 million，and in the establishment phase of China-ASEAN Free Trade Area，this value reached＄1516.96million.This suggests that since2002，the overall competitiveness of China vegetables exported to ASEAN has been significantly improved.The Chinese vegetable export competitiveness is an important factor in promoting the vegetable export from China to ASEAN.Overall，the competitiveness effect contributed more than 90%to export growth，and there was a slight decline in the contribution rate，but the contribution amount was substantially increased，because the contribution of other effects to export growth was also increasing.

Table 1 CMS decomposition results of grow th of vegetable export from China to ASEAN（＄108，%）

3.3 Analysis of export competitiveness of classified vegetables from China to ASEANTable2 reflects the export competitiveness effect of different types of vegetables.During 1993-2002，the export competitiveness of fresh and frozen vegetables was highest，accounting for 83.66%，followed by dried vegetables.During 2002-2009，the export competitiveness of vegetableswas greatly improved compared with the previous stage.The competitiveness of fresh and frozen vegetables contributed＄673.40 million，accounting for 68.63%，and the competitiveness of dried vegetables contributed＄229.1 million，accounting for 23.35%.The contribution of improvement of competitiveness to export growth was increased at this stage.During 2009-2013，the competitivenessgrowth of fresh and frozen vegetablesmade declining contribution，and the competitiveness effect of dried vegetables grew significantly over the previous two stages，with the contribution amounting to＄860.17million.The competitiveness growth of processed vegetableswas slow at the three stages.Therefore，in different categories of vegetables，fresh and frozen vegetables and dried vegetables have strong competitiveness，the competitiveness of dried vegetables is obviously improved，and the competitiveness of processed vegetables steadily grows，indicating that in the vegetable trade cooperation with ASEAN，China has strengthened the export competitiveness of secondary processing vegetables and deep processing vegetables.

Table 2 The results of subdivision of vegetable export competitiveness from China to ASEAN（＄108，%）

4 Conclusions and policy recommendations

4.1 ConclusionsDuring 1993-2013，there was close cooperation between China and ASEAN，and the export scale of vegetables from China to ASEAN was constantly increased.In 2013，the vegetables exported from China accounted formore than 70%of the vegetable market of ASEAN.The establishment of China-ASEAN Free Trade Area provides amore favorable external environment for the vegetable trade between both sides.Through constantmarket share（CMS）model，it is found that themajor factor responsible for export growth of vegetables from China to ASEAN is China's growing export competitiveness of vegetables.Compared with the demand effect and structure effect，competitiveness effect contributesmore than 90%to exportgrowth.In terms of the category of vegetables exported from China to ASEAN，the fresh and frozen vegetables have the highest competitiveness，followed by dried vegetables，and the export competitiveness of processed vegetables is also growing.

4.2 Policy recommendations

4.2.1Further improving the export competitiveness of vegetables.Firstly，it is necessary to control production costs and lower export prices of vegetables，increase the training for the staff in vegetable growing，processing and other processes，and strengthen themechanization supportof agricultural production to improve labor productivity.Secondly，it is necessary to raise the level of agricultural science and technology，accelerate agricultural technological innovation，and extend from depending on traditional ex-port of primary processing and secondary processing vegetables to deep processing vegetable varieties to increase the added value of China's vegetable exports.Thirdly，it is necessary to focus on vegetable export standardization in production，export，inspection and other aspects to prevent the non-tariff barriers to China's export of vegetables.

4.2.2Further expanding the export scale of vegetables from China to ASEAN.Firstly，it is necessary to increase the import demand of the ASEAN countries.With the development of China-ASEAN Free Trade Area and improvementof economic level，China needs to study and weigh the situation，strengthen vegetable export to ASEAN，and prevent the position decline in the ASEAN vegetablemarket.Secondly，it is necessary to improve the ability to adjust export structure of vegetable varieties from China to ASEAN.China should gradually adjust the structural change in ASEAN's vegetable variety demand to meet constant market changes.

4.2.3Strengthening agricultural trade cooperation with ASEAN and creating more favorable conditions.Through the establishment of free trade area，China and ASEAN have createdmore favorable conditions，which deepens the cooperation between China and ASEAN.In the framework of trade cooperation，in order to ensure the smooth development of vegetable export，the government should perform its duties to actively create export conditions，rationally use the rules，further develop the vegetable industrieswith competitiveness and comparative advantages，support the vegetable industries and enterprises with effect of scale economy，and increase investment in agricultural infrastructure.

4.2.4Making full use of China-ASEAN Free Trade Area to create a better external environment.As theworld economy continues to develop，China's vegetable exports to ASEAN has developed rapidly.Since the establishment of China-ASEAN Free Trade Area，China's vegetable exports to ASEAN have been significantly improved.On January 1，2004，the implementation of Early Harvest Programme made the tariffs of most agricultural products exported from China to ASEAN fall to zero，and the export price of vegetables from China to ASEAN was further reduced."Zero tariff"has greatly enhanced the export competitiveness of vegetables from China to ASEAN.China shouldmake full use of the advantages of free trade zone to further expand the vegetable trade with ASEAN.

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