Impact of political relationships on virtual land flow from China's food trade

Abstract

The increasing backlash against globalization has shifted public opinion towards being against trade. This situation puts food trade, which is resources constrained and susceptible to political relations, into a complex dilemma. Due to the concerns on agricultural endowments, food trade needs to be considered with strategic interests because of its sensitivity and fragility. Using virtual land as a measurement to analyse the resource flows behind the food trade can provide an objective perspective on what extent a country depends on the trade. Overlaying worldwide trade disputes and political interventions, establishing solid trade relationships is increasingly becoming urgent. This study uses an extended gravity model, assesses the virtual land traded by China with 10 species over 20 years, and provides insights on establishing politics-oriented trade relationships, further testing how this political mechanism works in the food trade. The results demonstrate that memorandums of understanding are the fundamental institutional layer to guarantee trading activities and promote smooth transactions for both sides; state visits are determinable factors in establishing bilateral relationships and it significantly promote upper-middle income countries, which crucially impacts the trading system. As those endeavors undertaken by executive departments are often ignored, more attention should be paid to them during interactive stages. Political relations show differences in food trade among different countries and varieties. The promoting effect of political relations is stronger in middle and high-income countries, and the impact on Russia and Ukraine is more significant than others. Compared within varieties, foreign state visits and endeavor presents more positive on pork.