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Following market reforms and economic growth since the late 1970s, agricultural wholesale markets in China have developed substantially and become increasingly important in food distribution. This paper investigates the determinants of credit constraints on agricultural wholesalers. A probit model with sample selection is estimated for credit constraints and demand using data collected via a nationwide survey of 1,422 agricultural wholesalers, of whom approximately 39% were designated as credit-constrained. Empirical results confirm that an absence of relatives in the business supports the notion of further discouraging potential borrowers from applying for credit in the first place. Moreover, the probability of being credit-constrained is significantly lower for legal corporations, wholesalers who have higher-value capital assets, larger-sized wholesalers, and those in a better micro-finance environment. Some policy implications are outlined.

One of the most significant features in Free Trade Agreement (FTA) is that certain products are excluded from tariff concession. Why do some products get more protection in FTAs?In this paper, using the highly disaggregated product-level data in agricultural sector of China’s FTAs, we examined and extended the hypothesis developed by Grossman and Helpman (1995), illustrating the products which are more likely to be excluded in FTAs. Our results suggest that, with the involvement of political costs to incumbent government, products which experience trade creation and have more political sensitivity are more likely to be excluded in FTAs. Moreover, we revealed that the Chinese government tend to achieve different goals through negotiation power, seeking more economic benefits from big-trading partners while giving more concession to small-trading partners.

Using national survey data on 1422 traders in 18 Chinese wholesale markets, we employ a probit model with sample selection to estimate the determinants of agricultural traders’ credit constraints. The econometric analysis shows that application costs that are highly related to social networks and imperfect screening of applicants by financial institutions both discourage potential borrowers and may make them become “self-rationing.” Credit-constrained traders account for 38.78% of traders seeking loans. The empirical results demonstrate that the probability of being credit-constrained is significantly lower for corporations, traders who have higher value assets, traders with more social networks, and traders in a better micro-finance environment.

Following market reforms and economic growth since the late 1970s, agricultural wholesale markets in China have developed substantially and become increasingly important in food distribution. This paper investigates the impact of credit constraints on the performance of agricultural wholesalers via a stochastic frontier approach (SFA) and a sample of 1,332 wholesalers nationwide. Empirical results show that relaxing credit constraints imposed by formal institutions results in an approximately 20-30 percent increase in the annual sales of agricultural wholesalers who are credit-constrained (40 percent of the sample). Credit constraints disproportionally impact the performance of micro and small wholesalers. Thus, policies aimed at providing credit access for these wholesalers would significantly boost the performance of smaller agricultural wholesalers while improving the functioning of these markets in China.

This paper constructs a theoretical framework of consumers’ label-choosing and self-protection behaviors when meeting their demand for food safety. With data collected from a survey on vegetable consumers in Beijing, we employ a bivariate Tobit model to make empirical analyses. The results show that knowledge and non-wage income have positive effects on promoting consumers’ label-choosing and self-protection behaviors. Self-protection, compared to label-choosing is relatively more labor intensive, thus a higher wage rate will result a lower level of self-protection behavior due to relatively higher opportunity costs. Additionally, consumers of different ages will choose different ways to pursue food safety. The younger are inclined to purchasing more labeled vegetables while the elder tend to conduct a higher level of self-protection behavior.

Consumers are facing a trade-off between the benefits of an increase in the length of the shelf life of food, such as low food costs, and the potential health damages caused by food preservatives. However, few studies in the current literature place emphasis on food preservatives, neither from a scientific perspective nor from an economic perspective. This causes a lot of controversies about government regulations. By constructing a theoretical framework and using a survey of 293 customers from 25 supermarkets in Beijing, this paper studies the consumer attitude towards food preservatives and attempts to fill the gap in the current literature. The main findings include that food price, and consumers' age and income are important for the willingness to pay (WTP) for 'preservative-free food' in Beijing. In particular, food price and consumer incomes are positively correlated with the WTP and there might be an inverted U-shaped relationship between age and WTP. This study indicates that consumers in Beijing are willing to pay a very high premium for preservative-free food 62% for preservative-free Mooncakes compared to conventional ones.

Using a unique survey data on agricultural traders in China in 2004, this study provides direct evidence on significance of interregional transport costs and their key determinants. Our major findings are as follows : (1) the trade barriers within China are dominated by transport-related costs but not artificial barriers, approximated by tolls and fines; (2) Labor and fuels costs are the most significant component of transport costs; (3) road quality is very important for transportation efficiency. Our results indicate that if increasing transport speed by 1 km per hour now, the fuel costs and total direct transportation costs for Chinese traders would reduce by 1.3% and 0.7% respectively.

Using a survey data of 700 traders, this study scrutinizes contract choices and enforcement for agricultural traders in China. This study finds that market service and environment are very important for both contract choices and enforcement. Better market service and environment can increase the propensity of using contract and the probability of contract enforcement both for purchase and sales of products. Education and memberships of special associations are also important for contract choices and enforcement. Higher education and affiliation to special associations for traders can increase the propensity of contracts and reduce contract breaches. However, the formats of contracts, whether contracts are oral or written, are not important for contract enforcement.

Constructing a theoretical framework and using a survey data of 294 customers from 25 supermarkets in Beijing, this paper studies the willingness to pay (WTP) for additive-free Mooncakes in Beijing and finds that age and income are important for WTP for “food safety” in China. Income is positively correlated with the WTP and there is an inverted-U-shaped relationship between age and WTP. This study indicates that consumers in Beijing are willing to pay 5.80 Yuan more for an additive-free Mooncake, which provides a good policy benchmark for the government regulation on food additives. Furthermore, the theoretical framework also provides a good benchmark for understanding WTP in the future study of food safety.