Ex-Post Competitiveness of China’s Export in Agri-Food Products: 1980–96

Kevin Chen Department of Rural Economy, University of Alberta, Edmonton, Alberta T6G 2H1, Canada

Lian XuCollege of Huaxia Township Enterprise, Zhejiang University, Hanzhou 310029, People’s Republic of China

Yufeng DuanDepartment of Rural Economy, University of Alberta, Edmonton, Alberta T6G 2H1, Canada

ABSTRACT

This article applied the constant market share (CMS) model to investigate the performance of Chi-na’s export in agri-food products from 1980–96. The CMS results revealed a downward trend of Chi-na’s competitiveness in agri-food exports over the period under the study. Some evidence was foundthat trade policy reforms might have strengthened the tendency of decreasing competitiveness in Chi-na’s export in agri-food product. © 2000 John Wiley & Sons, Inc.

1. INTRODUCTION

Since the implementation of reform and opening-up policies in 1978, China’s foreign tradehas developed rapidly. The growth of agri-food trade has also been quite impressive overthe same period. In 1996, total export values of China’s agri-food products1 reached $US14.1 billion and total import values were $US 13.4 billion, which were 3.5 times and 3.6times larger, respectively, than the values in 1980 (Figure 1).2 During the period 1980–96,while becoming a potential market for agri-food export suppliers, China has also grown intoa major competitor in international agri-food markets. In fact, China has been a net exporterof agri-food to the world market over the period from 1980–96.3 This is particularly inter-

281

Agribusiness, Vol. 16, No. 3, 281–294 (2000)© 2000 John Wiley & Sons, Inc.

1The data are obtained from the World Trade Analyzer (WTA) of Statistics Canada, based on United Nationsstatistics. Agri-food products are defined as Standard International Trade Classification (SITC) sections 0, 1, 2,and 4.

2Figures are in nominal terms.3Ke (1997) and Lu (1997), using agri-food export and import data from China’s Customs Statistics and Statis-

tics Yearbook of China, indicated that China was a net exporter for most of years except 1981–83 during the pe-riod 1980–96. Their data only includes SITC section 0. Wailes, Fang, and Tuan (1997), using agricultural exportsand imports from United Nations/Food and Agriculture Organization (UN/FAO) database, indicated that Chinabecame a net exporter only in recent years. However, they didn’t specify SITC sections for their definition of agri-food products. An another potential data problem is that Hong Kong’s re-exports to China may be not reflected inChina’s official trade data (Wang, 1997). If China did not include such re-exports in their trade statistics, the ac-tual trade balance may be different from what we reported here.

Figu

re 1

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port

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esting given a widely perceived downward trend in China’s agricultural comparative ad-vantage (Anderson, 1990; Cai, 1996; Yeats, 1991). Did the increased export of China’s agri-food over the period 1980–96 reflect its rising international competitiveness? If so, to whatextent? These questions are important not only for China, but also for the rest of world, andespecially for the major agri-food exporting countries given the rising importance of Chi-na in the international agri-food market. However, existing research on China’s agricultur-al trade has been largely focused on the issue of China as a potential agri-food importingnation, and little research has been directed at examining the performance of China’s ex-ports in agri-food products in the reform era. The objective of this article is to examinewhether a rise of China’s exports in agri-food products over 1980–96 is associated with arise in its competitiveness. This is accomplished using the Constant Market Share (CMS)model that permits an isolation of a competitive residual from the growth of China’s ex-ports in agri-food products.

2. THE CMS MODEL

A country’s competitiveness4 is affected by both price and non-price factors (e.g., productquality, delivery and service schedule, and government policy). In the absence of analyz-ing both price and non-price determinants of competitiveness, one can analyze changes ina country’s export shares as ex post reflections of changes in competitiveness (Bowen &Pelzman, 1984). Although changes in export shares are not entirely determined by changesin competitiveness, they nonetheless provide an accepted measure of changes in a country’scompetitiveness vis-à-vis the world market. The CMS model postulates that if a country’scompetitiveness with respect to a certain export product stayed at the same level, its mar-ket share had to be constant as well. Therefore, any difference between the actual changein exports of the specific country and the sum of market competitors had to be caused by achange in export composition or competitiveness.

The CMS model is a commonly accepted procedure of accounting for the sources of acountry’s export growth.5 The limitations of the traditional CMS model, however, arewell known (see, e.g., Jepma, 1986; Richardson, 1971). To overcome some of these prob-lems, an improved version of the CMS model by Jepma (1986) is applied here. Jepma’sCMS model represents two advantages over the traditional model. First, Jepma’s de-composition introduces a number of new components that help explain changes in exportperformance. Second, Jepma’s CMS model solves the order problem associated with thetraditional CMS model. This order problem arises because the order of specification ofcommodity and market effects in the traditional CMS model influences their size, andmeasuring these two effects using different methods can yield vastly different results. As-suming China exports n commodities to m destinations, and choosing the world as a stan-dard, Jepma’s final decomposition of China’s total export growth of agri-food products,Dq, is ( Jepma, 1986):

COMPETITIVENESS OF CHINA’S EXPORT 283

4One needs to be careful with the use of a country’s competitiveness. Krugman (1991, 1994, 1996) argues thatcompetitiveness is a meaningless word when applied to national economies, as a country always has a compara-tive advantage at producing some range of goods. We are, however, concerned with a specific sector’s competi-tiveness in a given country.

5Some recent applications include Ahmadi-Esfahani (1995), Ahmadi-Esfahani and Jensen (1995), Bowen andPelzman (1984), Fagerberg and Sollie (1987), Feldman (1994), Jepma (1986), and Lloyd and Toguchi (1996).

(1)

where q is China’s total exports of agri-food products; sj is China’s share of world exportsof agri-food products; is China’s share of world exports of agri-food products to destina-tion j; si is China’s share of world exports of commodity i; sij is China’s share of world ex-ports of commodity i to destination j; Q is the total world exports of agri-food products; Qiis the total world exports of agri-food products to destination j; Qi is the total world exportsof commodity i; Qij is the total world exports of commodity i to destination j; D representsthe change in the two periods; superscript 0 is the initial year; 1 is the terminal year; sub-script i and j refer to export commodity and destination, respectively; i 5 1,2, . . . ,n and j5 1,2, . . . ,m. The interpretations for these eight decomposition items are provided as fol-lows:

(1) Growth effect: the change in exports due to an increase in the level of world exports,given that China’s competitiveness and export structure are unchanged.

(2) Market effect: the change in exports due to the market distribution effect, reflectingthe extent of the concentration of exports in faster-growing (slower-growing) markets than the world. A positive value indicates that China has concentrated itsexports on faster-growing markets than the world; whereas a negative value indi-cates that China has concentrated its exports on slower-growing markets than theworld.

(3) Commodity effect: the change in exports due to the commodity composition effect,given that China’s competitiveness is unchanged. A positive value demonstrates thatChina has concentrated its exports on commodities that are growing in demand at afaster rate than the average rate of total world’s agri-food exports; while a negativevalue indicates that China has concentrated its exports on commodities that aregrowing at a slower rate than the average rate of total world’s agri-food exports.

(4) Structural interaction effect: the change in exports due to the interaction of the spe-cific commodity and market effects of China, given that China’s competitiveness isunchanged.

(5) Pure residual: the change in exports due to the change in general competitivenessgiven that China’s export structure is unchanged.

(6) Static structural residual: the change in exports due to changes in China’s export

D D D D D D

D D D D

q s Q s Q s Q s Q s Q

s Q s Q s Q s Q

ij ij i iiji

ij ij j jiji

i ii

ij ij j jiji

= + −

+ −

+ −

− −

∑∑∑ ∑∑∑

∑ ∑∑∑

0 0 0 0 0

0 0 0 0

Growth Effect

Market Effect Commodity Effect

Structural Interaction EffectStructural Interaction Effect

Pure Residual

Static Structural Residual Pure Second-order Effect

Dynamic Structural Residual

+ + −

+ −

+ − −

∑∑ ∑∑

∑∑∑∑

D D D D

D D D

sQ s Q sQ Q Q s Q

s Q Q Q s Q

ij ijji

ij ijji

ij ij ij ijjiji

0 0 0 1 0 0

1 0 0

1

1

( / )

( / )

284 CHEN, XU, AND DUAN

structure, given an unchanged pattern of world exports. A positive value indicatesthat the change in China’s export structure has a favorable impact on its export per-formance; a negative value indicates otherwise.

(7) Pure second-order effect: the change in exports due to the interaction of changes inthe level of world exports, given that the world’s export structure is unchanged. Apositive value indicates that the changes in China’s export structure are adaptable tochanges in the level of world exports; a negative value indicates otherwise.

(8) Dynamic structural residual: the change in exports due to the interaction of changesin China’s export structure with changes in the world’s export structure. A positivevalue indicates that China has a rapidly growing share in markets (commodities) towhich the world’s exports are growing relatively rapidly; a negative value indicatesotherwise.

The traditional application of CMS usually decomposes export growth into three com-ponents, including the structural effect, the competitive residual, and the second-order ef-fect (Bowen & Pelzman, 1984). With the improved CMS model, the structural effect of thetraditional CMS model is now decomposed into a growth effect, a market effect, a com-modity effect, and a structural interaction effect; the competitive residual is split into a pureresidual and a static structural residual; and the second-order effect is divided into a puresecond-order effect and a dynamic structural residual. However, an increase (decrease) incompetitiveness is still indicated by a positive (negative) value of the competitive residual.The competitive residual measures the difference between the actual increase in China’s ex-ports of agri-food products and the increase that would have occurred had China maintainedits export share in each destination with respect to each commodity.

3. DATA

The data are obtained from the World Trade Analyzer (WTA)6, produced by the Interna-tional Trade Division of Statistics Canada. WTA, a replacement product for the previousWorld Trade Database, is constructed from trade data that each country reported to the Unit-ed Nations. The current (1998) WTA contains seventeen years (1980–96) of annual exportand import values by countries and commodities. The WTA, based on the Standard Inter-national Trade Classification (SITC), provides the data at the total and 1–4 digit SITC lev-els.

To aid in interpretation of the CMS decomposition results later on, some aggregationsare in order. Following Wang (1997), China’s agricultural exports are grouped into fourbroad categories in terms of their factor-intensity, degree of processing, and readiness fordirect consumption on the basis of 4-digit SITC level data. The four categories are bulkcommodities, processed intermediate goods, horticultural products, and consumer-readygoods. Bulk commodities include grain, oilseed, and plant-based fibers such as cotton, rawrubber, and non-manufactured tobacco; processed intermediate products include flour, feed,live animals, animal fats/oil, and animal-based fiber such as wool; horticultural productsinclude fresh fruits, vegetables, and flowers; consumer-ready products include preservedvegetables, fish, fruits and nuts, fresh and frozen meats, eggs, dairy products, processedmeats, manufactured tobacco, and beverages. The detailed 4-digit SITC codes under each

COMPETITIVENESS OF CHINA’S EXPORT 285

6Designed with ORACLE software, the WTA is an all-in-one analytical tool, allowing users to produce tablesand graphs in the chosen aggregation level. Agri-food products are defined as SITC sections 0, 1, 2, and 4.

category are provided in Table 1. China’s exports in these four categories are presented inFigure 2. Comparing the annual export values for the four categories suggests that theremight be a significant change in China’s export composition after 1988.

Based on their relative importance to China’s exports in agri-food products, individualcountries are grouped into one of ten destination markets. They are North America (in-cluding Canada and the United States), Latin American Newly Industrialized Countries (in-cluding Argentina, Chile, Brazil, and Mexico), Japan, Hong Kong/Taiwan, South East Asia(including Indonesia, Malaysia, Thailand, Philippines, Singapore, Burma, and Vietnam),the rest of Asia, Europe /Oceania (including the EU15, Australia, and New Zealand), Rus-sia, and the rest of the world.

4. DECOMPOSITION PROCEDURES AND RESULTS

While, in theory, the CMS decomposition for the period 1980–96 allows us to evaluate theperformance of China’s agri-food export in the reform era, the dramatic change in China’strade policies in late 1980’s may affect such results. To see whether the degree of trade pol-icy reforms affects the performance of China’s export of agri-food products, the decompo-sition was also carried out for the two sub-periods, 1980–87 and 1988–96. The year 1988is chosen as a breaking point because trade policy reforms before 1987 were considered tobe at an experimental stage, and major reforms to the management of foreign trade wereinitiated by the central government in 1988 (World Bank, 1994).7 The decomposition wascarried out yearly, so that the end of the period in each decomposition becomes the begin-ning of the next period. The simple average of yearly decomposition results was then usedto represent the chosen period. Using this method, the year chosen as the beginning of the

286 CHEN, XU, AND DUAN

TABLE 1. 4-Digit SITC Codes Under Each of the Four Categories

Bulk Processed Intermediates Consumer-Ready Horticulture

0411-2, 041X, 0421, 0011-5, 0019, 001X, 0422, 0111-6, 0118, 011X, 0121, 0341, 0343, 034X, 0360,042X, 0430, 0440, 0460, 0470, 0481-2, 0711, 0129, 012X, 0141-2, 0149, 0542, 0544-45, 0571-6,0451, 0452, 0459, 0721-3, 0811-4, 0819, 014X, 01XX, 0223-4, 022X, 0579, 0616, 2221, 045X, 1211, 121X, 081X, 0913-4, 1212-3, 0230, 0240, 0251-2, 025X, 2924-6, 2929, 292X.2222-6, 222X, 2111-2, 2114, 2116-7, 02XX, 0341-4, 034X, 0350,2231-5, 2238-9, 2119, 211x, 2120, 21XX, 0371, 0372, 037X, 03XX,223X, 22XX, 2320, 2632, 2633, 2634, 2652, 0483, 0484, 0488, 048X, 2631, 2640, 2651. 2654-55, 2659, 2681-3, 04XX, 0541, 0546, 0548,

2685-7, 268X, 2911, 2819, 054X, 0561, 0564-5, 056X, 291X, 2922-3, 4111, 4113, 0577, 057X, 0582–3, 0585–6,411X, 4232-6, 4239, 423X, 0589, 058X, 05XX, 0611-2, 4241-5, 4249, 424X, 42XX, 0615, 0619, 061X, 0620, 4311, 4312-4, 431X. 06XX, 0712, 071X,0730,

0741, 0742, 074X, 0751, 0752, 07XX, 0980, 09XX, 1110, 1121-4, 112X,11XX, 1221, 1222, 1223, 122X, 12XX, 2927.

7It is recognized that, as there is a continuum in the Chinese trade policy reforms (i.e., Harrold, 1996; Ying,1996), a breaking point as chosen is a very crude way to measure the effect of policy events on China’s agri-foodexports.

Figu

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ld b

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198

0–96

.

overall period does not dominate the results. The average results of the yearly decomposi-tion of the change in China’s export value of agri-food products for the periods 1980–87,1988–96, and 1980–96 are provided in Table 2. The average annual increase of China’sexport value of agri-food products was $632 million over the period 1980–96, $427 mil-lion over the period 80–87, and $792 million over the period 1988–96. However, the de-composition results of the change in China’s export value for the whole period and the twosub-periods are very different. Though this does not give statistical evidence that the de-composition results are related to policy changes, it gives some indication that the degreeof trade policy reforms has affected the performance of China’s export of agri-food prod-ucts. In other words, to evaluate China’s export performance using the CMS model, it ismore appropriate to divide the reform era into sub-periods according to the degree of thetrade policy reforms. Accordingly, the following interpretations of the CMS decompositionresults are based on results for the two sub-periods.

Over the 1980–87 period, the competitive residual accounts for 56% of the increase inChina’s export value and the structural effect accounts for 48%. This indicates that risingcompetitiveness and changing export composition are almost equally important in explain-ing the increase in China’s export value of agri-food products over the period 1980–87. Incontrast, over the 1988–96 period, the structural effect accounts for 116% of the increasein China’s export value while the competitive residual retards growth of China’s export val-ue by 6%. China’s competitiveness of agri-food exports in the second period appeared todeteriorate rapidly compared to that in the first period. To identify the impact of the changesin China’s export structure on its export performance, one needs to look at the sign and mag-nitude of the pure residual and the static structural residual. Over both periods, the pureresiduals are positive, while the static structural residuals are negative. Apositive pure resid-ual signals that the general increase in competitiveness contributes positively to the increasein China’s export value. However, the pure residual accounts for 69% of the increase in Chi-na’s export value over the period 1980–87, while it accounts for only 3.7% over the peri-od 1988–96. A negative static structural residual indicates that changes in China’s exportstructure do not show a favorable interaction with the pattern of international demand. Forexample, over the period 1980–96, processed intermediates account for 26% of total agri-food exports, but China’s export share of processed intermediates decreased from 28 % inthe period 1980–87 to 22% in the period 1988–96. Figure 2 presents annual shares of Chi-na’s agri-food exports in world exports in total and by categories. Interestingly, the nega-tive percentage contributions of the static structural residual to the increase in China’s export value over the two periods are similar. In net terms, the decrease in specific com-petitiveness has offset the increase in general competitiveness in the period 1988–96, re-sulting in a decrease in overall competitiveness over the period 1988–96.

The structural effects are important in explaining the increase in China’s agri-food ex-port value over both periods. Over the period 1980–87, the growth effect accounts for 30%of the increase in export value, the market effect 14%, the commodity effect 5%, and thestructural interaction effect 21%. Over the period 1988–96, the growth effect accounts for98% of the increase in export value, the market effect 23%, the commodity effect 21%,and the structural interaction effect 25%. The main difference between the two periodscomes from the relative magnitude of the growth effect. The increase in China’s agri-foodexport value over the period 1988–96 is mainly attributed to the general increase in worldagri-food exports. A positive market effect indicates that China concentrated its export ondestinations where demand was growing faster than total world exports in both periods. Chi-na’s exports of agri-food were concentrated in a few Asian markets. On average, in 1980–

288 CHEN, XU, AND DUAN

TAB

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2.

The

Ave

rage

Res

ults

of

the

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S D

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198

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8–96

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d 19

80–9

6 ($

US’

000)

1980

–87

1988

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1980

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Val

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Val

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Val

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1.9

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48.3

916,

681.

211

5.7

605,

879.

695

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row

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7,49

5.6

29.9

773,

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0,64

4.3

77.6

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5,02

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23.4

130,

236.

920

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714

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1.4

22.9

Stat

ic S

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l Res

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l2

53,3

71.7

212

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79,0

51.8

210

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210

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62.6

24.

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3

96, 26% of China’s exports of agri-food went to Japan, 25% to the Hong Kong and Taiwan,4% to Korea, and 10% to seven South East Asian countries. These markets were growingat rates of 8%, 9%, 11%, and 9%, respectively, which were much higher than the rate of 5%for the world. In contrast to what is suggested in Figure 1, the magnitudes of the commod-ity effects over both periods are found to be small. This indicates that China’s export growthof agri-food products over 1980–96 was neither enhanced nor retarded by the commoditycomposition of China’s trade.

Besides the static structural residual, another major factor retarding the growth in Chi-na’s exports over the two periods was the dynamic structural residual. The negative dynamicstructural residuals indicate that China had a more rapidly growing export share in marketswhere world import demand was growing relatively slower. In other words, China’s gener-al competitiveness did not increase in markets where world import demand was growingrelatively faster. For example, while the growth rate of world exports in processed inter-mediates increased from 1.2% over the period of 1980–87 to 5.9% over the period of 1988–96, China’s export share in processed intermediates decreased from 28% to 22% (Figure 3).A negative pure second-order effect indicates that the changes in China’s export structuredid not adapt to the changes in the level of world import demand. However, the impact ofthe pure second-order effect was very small.

5. TRADE POLICY REFORMS, COMPARATIVE ADVANTAGE, AND COMPETITIVENESS

Though the above results appear to suggest that further trade policy reforms have weakenedcompetitiveness of China’s export in agri-food products, the CMS method does not permitus to place confidence limits on such a result. To gain some insights, one needs to look atChina’s trade policy reforms more closely. Trade policy reforms mainly involved a processof decentralization and a reduction of mandatory plan. Ying (1996), for example, dividedChinese trade policy reforms into three stages: pre-1987, between 1988 and 1991, and theyears after 1991. The first stage of reforms was characterized by decentralization of ad-ministrative control. The second stage of reforms, undertaken between 1988–91, was char-acterized by a change from direct planning control to the use of commercial policies suchas tariffs and licenses. The third stage of reforms, after 1991, was characterized by a low-ering of trade barriers such as tariffs and licenses. Harrold (1996) divided Chinese trade pol-icy reforms into four periods: 1978–83 as an export expansion period, 1984–89 as a de-centralization period, 1990–94 as improved economic incentives, and the years after 1995as a genuine trade liberalization period.

The major objective of export policy in China is to earn as much foreign exchange aspossible, so that almost any item can enjoy preferential treatment, as long as it is for export.In the earlier period of the reforms, many forms of export preferential treatments existed orwere newly initiated. Some examples are subsidized agricultural procurement prices, tradesubsidies, export tax rebates, a special program of enhanced export credits, preferential in-terest rates on domestic currency loans to firms producing for export, subsidized domestictransport, storage, and insurance of export goods, and the development of manufacturingfacilities devoted exclusively to export production. For instance, there are export produc-tion bases where most agricultural products are made and processed. These preferentialmeasures likely made food trade enterprises ‘competitive’ in international markets and pro-moted rapid growth of China’s exports in the earlier period. In the later period, there was adeclining importance of trade planning, many of the preferential treatments have been more

290 CHEN, XU, AND DUAN

Figu

re 3

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.

or less phased out, and export targeting has become progressively more macro in nature. Inparticular, China’s desire to become a signatory of the World Trade Organization (WTO)has exerted much pressure on China’s liberalization of its foreign trade. On the export side,these changes forced enterprises to compete in international markets with much less helpfrom governments. As a result, the composition of China’s exports has been allowed toevolve increasingly along the line of the country’s comparative advantage.

Many analysts have shown that China’s agricultural comparative advantage has gradu-ally decreased over time. Agricultural trade in China used to be perceived as an importantmeans to earn hard currency to support industrial development (Ke, 1997). This policy goalof agricultural trade has changed gradually as there has been a continued decline of foodand agricultural share in total exports. For example, the food share in total exports declinedfrom 16.5% in 1980 to 7% in 1996. The corollary to agriculture’s relative decline is the rel-atively fast growth in mining and manufacturing exports. In his examination of changes inexport specialization, Cai (1996) calculated Balassa’s (1965) revealed comparative advan-tage (RCA) index8 for four major industries in China over period 1965–92. The decline inChina’s comparative advantage in agriculture was shown to be very strong. Between 1980–92, the index went down from 1.61 to 0.78 for agriculture. In other words, China movedfrom having comparative advantage in agriculture to having comparative disadvantage.Rapid growth of the Chinese economy during the reform era has been accompanied by anequally rapid shift in China’s comparative advantage towards other manufactures at the ex-pense of agriculture (Anderson, 1990). Similar findings can also be found in Yeats (1991)and World Bank (1994).

The above discussion lends further support to our earlier suspicion that the trade policyreforms were likely strengthening the tendency of decreasing competitiveness in China’sexport of agri-food product, as this reflects China’s comparative advantage.9

6. CONCLUSION AND IMPLICATIONS

In this article, we have investigated whether and to what extent the increased value of Chi-na’s exports reflects a rise in the international competitiveness of its exports. In the process,we have attempted to bring out the importance of China’s trade policy reforms and agricul-tural comparative advantage in determining its export performance. The CMS results re-vealed a downward trend of China’s competitiveness in agri-food exports over the period1980–96. Some evidence is found that trade policy reforms might have strengthened thetendency of decreasing competitiveness in China’s export in agri-food product. Though theCMS results bring out the importance of trade policy reforms for China’s export competi-tiveness in agri-food product, it does not permit us to place confidence limits on such result.It will be interesting in the future to apply econometric methods to test whether or not thereis any statistically significant relationship between China’s trade policy reforms and its ex-port competitiveness in agri-food products. It is also found that China’s increase in agri-foodexports over the period of 1980–96 was largely due to growth of world demand and a fa-vorable market distribution effect. For example, the growth of China’s export in agri-food

292 CHEN, XU, AND DUAN

8RCA relates the share of the product in the country’s exports to the share of the product in the world exports.Questions may arise as to whether the RCA is appropriate for analyzing the comparative advantage of a countrylike China with a substantial government presence in trade.

9The terms “competitiveness” and “comparative advantage” are used rather literally in the text. The differencebetween the concepts of competitiveness and comparative advantage was nicely discussed in Haley (1987) andWhite (1987).

was concentrated in Japan, Hong Kong and Taiwan, Korea, and seven South East Asiancountries. As the recent Asian financial crisis is likely to slow down the growth of food im-port demand in these Asian countries, the historically favorable market distribution effectfor China is anticipated to decline or even disappear in the future. If China cannot improveits competitiveness in agri-food exports, its prospects for further export growth in agri-foodproducts appear to be limited. For exporting countries of agri-food products, an implicationis that they may be in a position to displace China in some markets, particularly in Asia.

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Kevin Chen is an assistant professor in the Department of Rural Economy, University of Alberta, Ed-monton, Alberta. He earned his Ph.D. in agricultural economics from the University of Guelph in Oc-tober, 1995. His current research interests are food marketing and trade. He can be contacted byphone at (780) 492-4580 or e-mail at kevin.chen@ualberta.ca.

Lian Xu is an associate professor and dean of the College of Huaxia Township Enterprise, ZhejiangUniversity, Hanzhou, People’s Republic of China. He earned his B.Sc. in agricultural economics fromZhejiang University in July, 1982. His current research interests are food marketing and economicdevelopment. He can be contacted by phone at (0571) 6971320 or e-mail at xulian55@yahoo.com.

Yufeng Duan is a research associate in the Department of Rural Economy, University of Alberta, Ed-monton, Alberta. Se earned her M.Sc. in agricultural economics from the University of Alberta in Oc-tober, 1999. Her current research interest is food marketing. She can be contacted by phone at (780)492-4225 or e-mail at yufeng.duan@ualberta.ca.

294 CHEN, XU, AND DUAN