Jiang Lunan - Soybean Import and Chinese CPI

Date and Time: May 4th, 2018, 2:30 - 4:00 pm

Room: A 101 in the Economics Building (Museum)

Abstract

Soybean is one of the main imported US products of China, which has been accounting for around 10% of the total imports from the US since 2008. The recent trade tension between the US and China has made soybeans get much attention as the soybean fell into the first list of products which were imposed 25% retaliation tariff. This paper investigates the possible effects of such a tariff increase through the effects of soybean import price shock on Chinese edible oil price, pork price as well as CPI. The impulse responses of our structural vector autoregressive models show that around 30% of the increase in soybean import price can be transmitted to Chi-
nese domestic edible oil price while very little can be transmitted to pork price. About 3% of the soybean import price shock can be passed onto CPI. Our study shed light on the possible negative effects of the increased the US soybean tariffs on the Chinese economy. At the same time, we also clarify the channel that the transmit the soybean import price shock to CPI is edible oil instead of
pork.


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