China-Australia Trade Relations and China’s Barley Imports

Abstract

The high concentration of China’s barley import sources determines that China’s barley import trade is vulnerable to the impact of tariff policy adjustment. In particular, in 2020, China implemented anti-dumping and anti-subsidy policies against Australia, the largest source of barley imports. Therefore, whether China’s barley import trade will face import risks due to the adjustment of tariff policy has become a question worth discussing. Based on the above background, this study uses the partial equilibrium model to explore the impact of China’s adjustment of tariff policy on imported barley from Australia on China’s barley industry under the changing trade relations between China and Australia. Through analyzing the feasibility of developing domestic barley industry and expanding barley import sources, further explore strategies to deal with barley import trade risks. The results show that: Under the three import tariff adjustment simulations, the total import volume of China’s barley shows a downward trend, and the import price increases to varying degrees. However, the relatively small increase in domestic production suggests that the domestic barley market is less able to cope with the risk of a sharp drop in imports. At the same time, affected by the adjustment of tariff policy, some Chinese consumer demand is difficult to satisfy. China can deal with trade risks by implementing an import diversification strategy.

1. Introduction

In recent years, the global economy has declined, and various trade frictions and local conflicts have intensified [1]. Under the strong impact of multiple external factors, the world has entered a complex risk era with multiple crises [2,3]. Especially after 2018, international trade has been greatly affected by changes in tariff policies or the trade behavior adjustment of various countries, and the risk of uncertainty is growing [4,5,6]. In recent years, many scholars have studied the impact of trade policies. Adjustments of agricultural trade policies will affect global agricultural prices [7], trade structure [8], trade volume [9], social welfare [10], and related industrial structures [11].

As a kind of grain, barley is widely planted in various regions of the world and is an important feed material and beer brewing material [12,13,14,15]. As China does not attach importance to barley planting, its barley consumption mainly depends on imports [16,17,18]. According to the statistics of FAO, China’s barley trade has been a net importer since it began importing barley in the 1960s, and it became the world’s largest importer in 2020 [19]. In addition, with the development of China’s social economy, the feed consumption demand and processing consumption demand for barley in China are growing rapidly, and the dependence on barley imports is rising, reaching 89.98% by 2020 [20]. Australia is China’s largest source of imports [21,22]. In 2015, China implemented the “zero tariff” policy on imported barley originating in Australia [23,24], and a large number of imported barley from Australia flooded into the Chinese market. In 2017, the barley imported from Australia accounted for 73.11% of China’s total barley imports [25].

According to the GATT agreement, if the export price of a product exported from one country to another is lower than the comparable price of the same product for consumption in the exporting country in the normal course of trade, that is, the product enters the commerce of another country at a price lower than normal value, the product is considered dumped [26]. In recent years, the gap between the domestic market price and the import price of barley has been getting larger and larger. In 2017, the domestic market price of barley was about 1.2 times the import price of barley, which had a serious negative impact on China’s major barley growers. Low prices of imported barley have led to long-term losses in the domestic barley industry. According to statistics, the average profit per mu of domestic barley in 2018 increased 58.07% compared with the loss in 2014. Therefore, to ensure China’s food security, the Chinese Ministry of Commerce has decided to file an investigation on imported barley from Australia in 2018 [27,28]. The investigation found that during the injury investigation period (2014–2018), Australian barley imports caused material damage to China’s domestic barley industry, and the dumping and subsidies of Australian barley imports were the direct causes of the material damage to the domestic barley industry. Therefore, the Ministry of Commerce of China has finally decided to impose an anti-dumping duty of 73.60% and a countervailing duty of 6.9% on imported barley from Australia from 19 May 2020, with a total duty of 80.50% for a period of five years [29].

In 1961, China’s barley production was 3.71 million tons, making it one of the world’s major barley producers. With the significant increase in China’s barley planting area, the domestic barley production reached a historical peak of 5.94 million tons in 1962. Since then, with the continuous decline of domestic barley planting area, barley production has shown a trend of fluctuation and decrease. As of 2020, China’s barley production has dropped to 0.9 million tons. During the same period, the barley production of the world’s major producers Russia, Germany, France, and Australia was 20.939 million tons, 10.7692 million tons, 10.2735 million tons, and 10.1272 million tons, respectively. The sharp decline in China’s production has been unable to meet China’s consumption demand for barley. China is highly dependent on imported barley [30,31], and the trade of barley characterized by a high concentration of import sources determines that China’s barley import trade has a certain vulnerability [32,33] and is easily affected by the adjustment of import tariff policies [34]. Based on the above background, this study proposes the hypothesis that China’s adjustment of tariffs on imports of Australian barley will affect China’s barley import trade and bring the risk of a significant increase in domestic prices or a sudden decrease in imports. Based on the hypothesis proposed in this study, firstly, this paper analyzes the trade situation of barley in China. Then, by constructing a partial equilibrium model, the risk of China’s barley import tariff adjustment to China’s barley import trade is simulated. Finally, the paper analyzes the feasibility of developing the domestic barley industry and expanding import sources, and puts forward targeted policy suggestions, which have important practical significance to better guarantee the supply of the domestic barley market.

2. Import Structure

Figure 1 reflects the changing trend of barley import volume, yield, and external dependency under China’s barley import tariff policy during 1961–2020. From 1961 to 1991, China’s barley import volume and external dependence remained low. In 1962, the planting area and yield of barley in China reached historical peaks of 5.19 million hectares and 5.94 million tons, respectively, and the domestic production could fully meet the consumption demand. Therefore, China imported a small amount of barley from 1961 to 1991. Imports and external dependence have been at low levels. From 1992 to 2013, China’s barley import volume fluctuated and increased generally [35]; the annual average import volume reached 1.8628 million tons, and the external dependence continued to increase. In 1995, China abolished the import tariff quota of barley and implemented a minimum tax rate of 3% instead [36]. During this period, China’s external barley dependence increased significantly, from 19.56% in 1992 to 58.40% in 2013. From 2014 to 2020, China’s barley import tariff policy entered a period of dynamic adjustment. This stage is the period when China’s barley import volume was the largest and the import fluctuation was the most frequent. The annual average import volume of barley reached 7.3 million tons, and the average external dependence reached 84.16%. In 2015, China implemented the “zero tariff” policy on barley imports from Australia [37]. In that year, barley imports soared to 10.79 million tons, becoming the largest import in nearly 50 years. After experiencing the import peak in 2015, China’s barley imports began to decline significantly. In 2016, the import volume of barley dropped to 5.06 million tons, nearly double that of 2015. Since then, China’s barley import has been in a state of sharp fluctuations, with the change of the import volume in adjacent years reaching about 2 million tons. In 2020, China’s external barley dependence reached 89.98%, and China’s barley consumption relied heavily on the international market. The high degree of external dependence means that China is vulnerable to the fluctuations of the international barley market [38], and China’s barley is faced with high import risks. Therefore, in May 2020, the Chinese Ministry of Commerce decided to impose 80.5% anti-dumping and countervailing duties on barley imported from Australia, and temporarily suspend the import of barley from Australia in November.

3. Materials and Methods

3.1. Partial Equilibrium Model

This study uses the partial equilibrium theory and the Chinese agricultural industry model (CASM) developed by the Institute of Agricultural Economics and Development of the Chinese Academy of Agricultural Sciences for reference [39], to predict and analyze the impact of trade policy changes on China’s agricultural product market [40]. In this study, according to China’s barley imports, the trade department of CASM was divided into Australia, France, Canada, and other countries (barley exporting countries except Australia, France, and Canada), so as to calculate China’s barley trade.

• Production Equations. The yield of barley in China mainly depends on the yield per unit area and harvested area. Among them, barley yield per unit area is related to the current input of production factors, which is directly determined by the market price of barley. Therefore, barley yield per unit area is set as a function of barley price. The barley harvested area is mainly determined by the comparative benefits of barley and other crops, so the barley planting area is set as a function of the prices of barley, rice, and other crops.

$$QCH{N}_t=A_t\times Y_t$$

(1)

$$Ln{A}_t={\alpha }^A+e_{DBP}^{A}LnDB{P}_t+e_{DCP}^{A}LnDC{P}_t+{\displaystyle \sum e_{DOCP}^{A}LnDOC{P}_t}$$

(2)

$$Ln{Y}_t={\alpha }^Y+e_{DBP}^{Y}LnDB{P}_t$$

(3)

where QCHN is the yield of barley, A is the barley harvested area, Y is the yield per unit area of barley, DBP, DCP, and DOCP are the price of barley, corn, and other agricultural products (i.e., rice, wheat, potato, apple, other fruits and vegetables), respectively, α is the intercept, e is the elasticity, and t is the time variable.

2.

Demand Equations. Barley is mainly divided into feed consumption and processing consumption, while barley price and domestic income level are the main factors affecting consumption demand. The equation for the demand for barley is as follows:

$$LnDB{P}_t={\alpha }^{DBP}+{\beta }_{PGDP}^{DBP}Ln(PGD{P}_t/CP{I}_t)+{\beta }_{DDCN}^{DBP}LnDDC{N}_t$$

(4)

where DBP is the demand, PGDP and CPI reflect the level of per capital income, and DDCN is China’s barley demand.

3.

Trade Equations. According to the research needs, the three major barley trading countries, Australia, France, and Canada are analyzed separately, and other countries are considered as a whole. At the same time, considering the uncertainty of international trade, dummy variables are introduced to eliminate the impact of China’s barley import surge and decline on parameter estimation in individual years. The equations for China’s barley import are as follows:

$$LnI{M}_{it}={\alpha }^{I{M}_i}+{\beta }_Q^{{}^{I{M}_i}}Ln{Q}_{it}(1-{{\rm Z}}_i)+{\beta }_{DBP}^{{}^{I{M}_i}}LnDB{P}_t+{\beta }_{IBP}^{{}^{I{M}_i}}LnIB{P}_{it}+{\beta }_{DZ}^{{}^{I{M}_i}}D{Z}_{it}+{\beta }_{DJ}^{{}^{I{M}_i}}D{J}_{it}$$

(5)

where IM represents China’s barley imports, i represents Australia, Canada, France, and other countries, Q represents the barley production, IBP represents the import price of barley in China, DZ and DJ represent the dummy variables setting to eliminate the positive and negative shocks in each country, respectively, and Z represents percentage of impact of extreme weather disasters on barley yield.

4.

Price Linkage Equations. There is a correlation between China’s barley import price and the domestic price. China’s barley import price is mainly affected by the exchange rate and corn price. The equations can be given as:

$$LnIB{P}_{it}={\alpha }^{IB{P}_i}+{\beta }_{DBP}^{IB{P}_i}LnDB{P}_t+{\beta }_{EX}^{IB{P}_i}LnE{X}_{it}+{\beta }_{DCP}^{IB{P}_i}LnDC{P}_t$$

(6)

where EX represents the exchange rates of Chinese Yuan (RMB) with Australian Dollar (AUD), Canadian Dollar (CAD), Euro (EUR), and US Dollar (USD) in the period, respectively.

5.

Market Clearing. Since China has been in a state of net import for a long time, it is assumed that the market will reach the clearing state when the sum of domestic output and import is equal to domestic consumption. This can be given as:

$$DDC{N}_t=QCH{N}_t+{\displaystyle \sum I{M}_{it}}$$

(7)

3.2. Parameter Estimation

The parameters of demand equations, international trade equations, and price linkage equations are obtained by regression. In order to eliminate the influence of abnormal fluctuation on parameter estimation to the maximum extent, the average processing of barley import quantity was carried out. The estimation results show that most of the equations have a high degree of fitting, indicating that the equation population has a high degree of fitting to the dependent variables. At the same time, most variables in the model have good significance, and their symbols are consistent with economic principles, indicating that the independent variables have good explanatory ability to the dependent variables.

3.3. Data

Table 1. Variables and data source.

Variable		Unit	Symbol	Data Sources
Endogenous variable	Barley production in China	104 Ton	QCHN	FAOSTAT
	Barley planting area in China	104 hectare	A	FAOSTAT
	Barley yield per unit area in China	Ton per hectare	Y	FAOSTAT
	Barley market price in China	USD/Ton	DBP	FAOSTAT
	Barley consumption in China	104 Ton	DDCN	FAOSTAT
	Chinese barley imports	104 Ton	IMi	UN Comtrade
	Import barley price	USD/Ton	IBPi	UN Comtrade
Exogenous variable	Market prices of other agricultural products in China	USD/Ton	DOPCi	CASM
	China’s per capital GDP	USD	PGDP	NBS
	China Consumer Price Index	-	CPI	NBS
	Barley production in other countries	104 Ton	Qi	FAOSTAT
	Positive external impact	-	DZ	-
	Negative external impact	-	DJ	-
	Exchange rate	-	EXi	World bank
	Corn market price in China	USD/Ton	DCP	FAOSTAT
	Effect of extreme weather disasters on yield reduction rate of barley	%	Z	-

and

Table 2. Variables’ descriptive statistics.

Variable	Mean	Standard Deviation	Minimum	Maximum
DBP	217.02	86.45	95.41	330.94
DDCN	526.71	125.01	327.41	777.10
PGDP	12,537.51	9665.03	2362.30	32,189.00
CPI	102.77	3.58	98.60	117.10
IMa	138.40	80.24	64.97	324.07
IMc	57.31	39.80	25.94	175.48
IMf	49.26	54.33	4.17	190.45
IMo	31.50	29.94	7.32	133.76
Qa	783.93	209.56	386.48	1350.60
Qc	1039.46	237.45	711.68	1556.20
Qf	1075.58	140.77	759.03	1356.54
Qo	11,179.73	839.73	9535.19	12,510.68
IBPa	230.39	68.69	134.37	455.23
IBPc	247.95	77.59	148.30	439.55
IBPf	225.73	77.59	113.94	452.39
IBPo	239.75	77.20	148.73	439.80
EXa	5.48	0.68	4.29	6.66
EXc	5.85	0.68	4.87	7.11
EXf	8.64	1.09	6.94	10.42
EXo	7.37	0.86	6.14	8.35
DCP	218.65	93.81	115.94	389.09

provide a descriptive analysis of data sources and variables. This study is based on data from 1995 to 2020. The harvested area and yield per unit area of barley in China, and the yield of barley in Canada, France, and Australia were all obtained from the FAO database. China’s import volume and import price of barley are derived from the Comtrade database of the United Nations, in which the import price is the ratio of the total import volume to the imported quantity. Meanwhile, in order to eliminate the influence of abnormal fluctuations on parameter estimation to the greatest extent, the average import volume of the current year, the year before, and the year after are used to replace the import volume of the current year.

3.4. Scenario Settings

The change of food trade relations corresponded to the current situation of political relations between the two countries at that time [41]. In particular, trade disputes have potential trade effects on import markets [42]. On this basis, the following scenarios are set for simulation, and the basic scenario is set as follows: continue to implement the zero tariff policy on imported barley from Australia, and continue to impose a 3% tariff on imported barley from France, Canada, and other countries; Scenario 1 is set to impose 80.50% anti-dumping and countervailing duties on imported barley from Australia, and impose a 3% tariff on Canada, France, and other countries; Scenario 2 is set to ease the trade relationship between China and Australia, that is, impose 30% anti-dumping and countervailing duties on imported barley from Australia, and impose a 3% tariff on Canada, France, and other countries. Scenario 3 is set as the deterioration of China-Australia trade relations, that is, a 130% import tariff is levied on imported barley from Australia, and a 3% tariff is levied on Canada, France, and other countries (

Table 3. Scenario simulation scheme of barley import tariff policy adjustment.

Scenario	China’s Barley Import Tariff Setting
Basic scenario	Implement the “zero tariff” policy to Australia; 3% tariff will continue to be applied to France, Canada, and other countries;
Scenario1	Impose 80.50% anti-dumping and countervailing duties on Australia; 3% tariff will continue to be applied to France, Canada, and other countries;
Scenario2	China-Australia trade relations improved, and 30% anti-dumping and countervailing duties were levied on Australia; 3% tariff will continue to be applied to France, Canada, and other countries;
Scenario3	China-Australia trade relations deteriorated, and 130% anti-dumping and countervailing duties were levied on Australia; 3% tariff will continue to be applied to France, Canada, and other countries;

).

4. Results and Discussion

4.1. The Effect of Tariff Adjustment on China’s Barley Import

The simulation results of Scenario 1 show that, compared with the basic scenario, China’s total barley imports are reduced by 6.18%. The import price of barley increased by 10.75% after weighted average. Secondly, from the perspective of changes in the sources, China’s barley imports from Australia decreased by 41.89%, and the import price increased by 83.20%. At this time, there was a certain trade diversion effect. China’s total imports from Canada, France, and other countries increased by 2.0% compared with the basic scenario. As Canada and Australia are both major import sources of China’s high-end malting barley, and there is a strong substitution relationship between the two countries’ barley, the import of Canadian barley increased the most, China’s barley imports from Canada increased by 2.89%, and the import price increased by 0.80%. China’s barley imports from France were relatively small, increasing only 1.40%, and the import price of barley increased by 0.96%. At this time, compared with the basic scenario, the proportion of China’s barley imports from Australia, Canada, and France in China’s total barley imports decreased from 67.79% to 65.09%.

The simulation results of Scenario 2 show that if the trade relations between China and Australia were relaxed (the tariff of barley imported from Australia is reduced to 30%), the total import volume of China’s barley would be reduced by 3.17%, compared with the basic scenario. The import price of barley increased by 4.87% after weighted average. In general, the deviation of import quantity and price from the basic scenario is small, and China’s barley import trade is less affected. From the change of import sources, China’s barley imports from Australia decreased by 21.39%, and the import price increased by 29.27%. At this time, there was a certain trade diversion effect. China’s imports from Canada, France, and other countries increased by 1.45%, 0.70%, and 0.85%, respectively, compared with the basic scenario. The import prices increased by 0.40%, 0.49%, and 0.65%, respectively.

The simulation results of Scenario 3 show that if the trade relationship between China and Australia deteriorated (the tariff of barley imported from Australia rises to 130%), the total import volume of China’s barley would be decreased by 7.87%, compared with the basic scenario. The import price of barley increased by 13.93% after weighted average. In general, the import quantity and price deviated greatly from the basic scenario, and China’s barley import trade was greatly affected. From the change of import sources, China’s barley imports from Australia decreased by 53.53%, and the import price increased by 134.43%. At this time, there was a certain trade diversion effect. China’s imports from Canada, France, and other countries increased by 3.73%, 1.80%, and 2.17%, respectively, compared with the basic scenario. The import prices increased by 1.02%, 1.24%, and 1.65%, respectively (

Table 4. Scenario result scheme of barley import tariff policy adjustment (Unit: 104 tons, USD/ton).

Country	Basic Scenario		Scenario1		Scenario2		Scenario3
	Import Quantity	Import Prices	Import Quantity	Import Prices	Import Prices	Import Prices	Import Quantity	Import Prices
Australia	157.35	232.83	91.44	426.53	123.69	300.97	73.12	545.82
Canada	227.13	204.49	233.68	206.12	230.42	205.31	235.60	206.59
France	188.08	193.37	190.70	195.23	189.40	194.31	191.46	195.77
Other country	272.07	228.37	276.65	231.28	274.38	229.84	277.97	232.12

).

4.2. The Effect of Tariff Adjustment on China’s Barley Industry

Table 5. Scenario result scheme of barley import tariff policy adjustment (Unit: 104 tons, USD/ton).

Scenario	Yield	Import Quantity	Consumption	Domestic Price
Basic scenario	90.12	844.62	934.75	288.82
Scenario1	90.88	792.47	883.35	294.63
Scenario2	90.50	817.88	908.38	291.94
Scenario3	91.09	778.15	869.24	295.58

reflects the impact of the adjustment of barley import tariff policy on the domestic barley industry. Firstly, from the changes in domestic barley production, under the three simulation scenarios, the growth of domestic barley yield is relatively small, only 7600 tons, 3700 tons, and 9600 tons more than the basic scenario, respectively. This result shows that when the import volume of barley drops significantly, it is still difficult for China’s barley yield to achieve a significant growth, and the domestic barley market is weak in coping with trade risks. Secondly, from the domestic barley market price changes, under the three simulation scenarios, the growth rate of domestic barley market price is not large, having increased by 2.16%, 1.08%, and 3.24%, respectively. The main reason is that after the tariff increase, China’s barley imports from Australia fell sharply, leading to a decrease in the total supply of China’s barley market, which led to a general increase in the price of China’s domestic barley market and China’s barley imports from other countries. However, the price of the Chinese barley market did not rise significantly, mainly due to the following reasons: on the one hand, after the Ministry of Commerce of China launched an anti-dumping investigation on imported barley originating in Australia in 2018, the share of Australian barley in the Chinese barley market continued to decline, and the proportion of Chinese imports from Australia had dropped to 18.46% by 2020. On the other hand, from the perspective of changes in domestic barley consumption, there is a large price gap between China’s barley prices and import prices. Domestic barley consumption decreased by 5.50%, 2.82%, and 7.01%, respectively, compared with the basic scenario, and some consumption demand was difficult to meet due to the change of tariff policy (Table 5).

5. Feasibility Analysis of China’s Diversification Import Strategy to Deal with Trade Risks

From the above analysis, it can be seen that China’s barley import trade faces certain risks, and the tariff policy adjustment caused by trade frictions aggravates such risks. Therefore, the following contents focus on the domestic and foreign perspectives to further explore the countermeasures of China’s barley import risk.

At present, the countermeasures to deal with the trade risks of agricultural products can be divided into two categories. The first type of countermeasure emphasizes the development of domestic industry, through expanding the planting scale, improving the mechanization rate, strengthening the cultivation of improved varieties, and technology promotion to improve domestic production and quality, so as to minimize imports. The other kind of countermeasure is to expand trade channels, diversifying import trade risks by implementing diversified import strategies, and even establishing overseas production bases to stabilize import sources [43].

5.1. Feasibility Analysis of Developing Domestic Barley Industry

Expanding the barley planting area is a direct way to increase barley yield in China. China’s barley yield in 2021 was 2.071 million tons, which dropped to 2.068 million tons in 2022. Compared with the barley yield in China under the simulation scenario, the change trend is basically the same, indicating that even if there are potential risks in domestic import trade, domestic barley yield is still difficult to significantly increase. The main reason is that China takes food security as a major strategic goal and uses limited domestic resources for the production of wheat, rice, and other major grains. Barley is the fourth largest crop in China, after wheat, corn, and rice. However, in the past 20 years, due to the lack of comparative advantages and supportive policies, its benefit was significantly lower than that of competitive crops in the same period, leading to the lack of farmers’ willingness to plant barley, and the barley planting area being significantly reduced for several years in a row.

Therefore, improving barley planting efficiency is an important way to increase China’s barley yield under the condition of limited resource endowment. From the comparison of yield per unit of major barley producing countries in the world, the yield per unit of barley in China is only higher than that in Australia and Ukraine, which is at a relatively low level and has large room for improvement. If the yield per unit area reaches the Argentine yield of 4010.10 kg/ha in 2021, the barley yield in China can be increased by 12.78% under the current planting conditions. If the yield per unit area reaches the German yield level of 6762.70 kg/ha in 2021, the barley yield in China can be increased by 68.64% under the current planting conditions. However, it is far from satisfying the domestic demand for barley (

Table 6. Yield per unit area of major barley producing countries (Unit: kg/ha).

Year	Germany	France	Canada	Argentina	Denmark	Ukraine	Australia	China
2017	6930.20	6345.20	3733.80	4299.10	5999.80	3312.00	2793.90	3288.60
2018	5766.30	6246.00	3498.50	4182.70	4331.90	2958.20	2243.80	3644.10
2019	6783.40	6977.40	3806.60	4073.10	6215.00	3417.40	1987.80	3461.50
2020	6459.10	5209.00	3824.00	4108.20	6363.30	3216.00	2009.00	3461.50
2021	6762.70	6542.70	2274.40	4010.10	5569.80	3817.40	2667.70	3921.60

).

5.2. The Feasibility Analysis of Expanding the Source of Barley Import in China in the Short Term

In order to accurately analyze the feasibility of expanding the potential import sources of barley in China, this paper selects other major barley producing countries except Australia, Canada, and France as the analysis objects, and analyzes them from three perspectives: barley production, export volume, and export volume to China. Firstly, from the perspective of national production, the average production of Russia, Germany, and Ukraine has been in the top three from 2019 to 2021. In particular, as the world’s largest barley producer, Russia’s barley output reached 20.939 million tons in 2020. From the perspective of the export volume of each country, although the production of barley in Britain, the United States, and Denmark is large, it is mainly used for domestic consumption, and the export volume is relatively small. The three countries with the largest average export volume from 2019 to 2021 are Russia, Ukraine, and Argentina. From the perspective of exports to China, Russia, Ukraine, Argentina, Denmark, and Kazakhstan have established barley trade relations with China (

Table 7. Barley production and trade in major countries (Unit: 10⁴ tons).

Country	2019			2020			2021
	Production	Export Quantity	Export to China	Production	Export Quantity	Export to China	Production	Export Quantity	Export to China
Russian Federation	2048.91	394.06	0	2093.90	496.34	1.9	1799.59	396.27	8.6
Germany	1159.15	158.05	0	1076.92	241.49	0	1041.11	307.50	0
Ukraine	891.67	234.88	87.39	763.63	504.63	257.58	943.71	534.46	321
Britain	804.8	166.62	0	811.70	157.49	0	696.10	77.22	0
Argentina	511.72	251.74	6.6	448.31	233.31	42.73	403.61	229.59	173
Kazakhstan	383.01	164.01	3.06	365.93	98.03	19.69	236.68	146.00	0
United States of America	369.18	11.91	0	359.95	18.71	0	256.20	31.14	0
Denmark	362.45	52.24	0	415.65	71.75	1.78	346.22	96.09	0

).

This study further analyzes the feasibility of expanding China’s barley import sources in the short term by measuring the barley export space of the above countries. The residual space 1 (production—exports to China) and the residual space 2 (total exports—exports to China) are used to further analyze China’s potential barley importing countries. The residual space 1 reflects the theoretical value of China’s potential barley import volume. According to the calculation results, theoretically, China has great potential to import barley from Russia, Germany, Ukraine, the United States, the United Kingdom, Argentina, Kazakhstan, and Denmark. The residual space 2 reflects the barley imports that China can further obtain from the current international trade market. Among them, in 2021, China’s import potential from Russia is the largest, 3.8767 million tons, and the potential import from Germany and Ukraine is 2 to 3 million tons. This means that in the actual trade, China still has a huge space to expand import sources, and can effectively deal with barley import trade risks by adjusting import sources (

Table 8. Surplus space of barley export in major countries from 2018 to 2020 (Unit: 10⁴ tons).

Country	2019		2020		2021
	Residual Space 1	Residual Space 2	Residual Space 1	Residual Space 2	Residual Space 1	Residual Space 2
Russian Federation	2048.91	394.06	2092	494.44	1790.99	387.67
Germany	1159.15	158.05	1076.92	241.49	1041.11	307.5
Ukraine	804.28	147.49	506.05	247.05	622.71	213.46
United Kingdom	804.8	166.62	811.7	157.49	696.1	77.22
Argentina	505.12	245.14	405.58	190.58	230.61	56.59
Kazakhstan	379.95	160.95	346.24	78.34	236.68	146
United States of America	369.18	11.91	359.95	18.71	256.2	31.14

).

5.3. The Feasibility Analysis of Expanding the Source of Barley Import in China in the Long Term

The long-term barley import potential of China is mainly related to the barley production potential of other countries. Based on the FAO database, this study selected Russia, Ukraine, Argentina, and Kazakhstan, four countries with barley trade relations with China, to calculate the barley production potential. According to the calculation results, Russia and Argentina have the largest potential production of 33.83 million tons and 37.48 million tons, which are 1.88 times and 9.29 times the barley production of Russia and Argentina in 2021, respectively. The potential production of Ukraine and Kazakhstan is only 7.57 million tons and 1.58 million tons, respectively, due to the small amount of potential arable land. In 2021, China’s total import volume of barley was 12.52 million tons; 10% of the total potential production of barley in the above countries can satisfy China’s current barley import demand. In recent years, China has promoted the diversification of trade sources to some extent by strengthening trade cooperation with Russia, Kazakhstan, Ukraine, and other countries. Many scholars believe that the agricultural production potential of countries along the “Belt and Road Initiative” and other routes still has large room for improvement. China can take advantage of the “Belt and Road Initiative” to establish regional grain trading markets and implement diversified import strategies, so as to further reduce the risk of agricultural import trade [44,45]. Although the production potential of the above countries is relatively large, which can provide strong support for China to expand its import sources of barley in the long term, it may face many problems and uncertainties. For example, due to the influence of geographical location and climate, Russia’s cultivated land has been eroded and salinized all year round, and a large amount of investment is required to expand the potential cultivated land [46]. In addition, the conflict between Russia and Ukraine has seriously affected global trade. Ukraine, as the main battlefield, will especially significantly reduce the area of grain cultivation in 2022 [47] (

Table 9. Production capacity of potential importing countries (Unit:10⁴ ha/10⁴ tons).

Country	The Acreage of Barley	Proportion of Planted Area for Barley	Potential Planting Area for Barley	Potential Yield of Barley
Russian Federation	826.74	18.55	7730.76	3383.47
Argentina	109.12	7.48	12,175.62	3748.12
Ukraine	237.45	17.56	1346.70	756.75
Kazakhstan	272.88	16.85	668.90	157.79

).

6. Conclusions and Policy Implications

Based on the partial equilibrium model, this study explores the impact of the changes in trade relations between China and Australia on China’s barley industry. The results showed that if China imposed 80.50% anti-dumping and countervailing duties on imported barley originating in Australia, the total import volume of China’s barley would decrease by 6.18% compared with the basic scenario, and the weighted average import price of barley would increase by 10.75%. Among them, the price of barley imported by China from Australia increased by 83.20%, while the import volume decreased by 41.89%. Affected by the trade diversion effect, China’s barley imports from Canada, France, and other countries increased by 2.89%, 1.40%, and 1.68%, respectively, and China’s barley import prices from the above countries increased by 0.80%, 0.96%, and 1.28%, respectively. When trade relations between China and Australia improved and the tariff on imported barley from Australia was reduced to 30%, compared with the basic scenario, China’s total barley imports decreased by 3.71%, and the weighted average import price increased by 4.87%. Among them, China’s barley imports from Australia decreased by 21.39%, and the import price increased by 29.27%. The barley import was transferred to Canada, France, and other countries, with the import volume increased by 1.45%, 0.70%, and 0.85%, respectively, compared with the basic scenario. The import prices increased by 0.40%, 0.49%, and 0.65%, respectively. When trade relations between China and Australia deteriorated further and the tariff on imported barley from Australia increased to 130%, compared with the basic scenario, China’s total barley imports decreased by 7.87%, and the weighted average import price increased by 13.93%. Among them, China’s barley imports from Australia decreased by 53.53%, and the import price increased by 134.43%. The barley import was transferred to Canada, France, and other countries, with the import volume increasing by 3.73%, 1.80%, and 2.17%, respectively, compared with the basic scenario. The import prices increased by 1.02%, 1.24%, and 1.65%, respectively. The above three scenarios have little impact on the domestic barley production. The domestic barley yield increased by 0.84%, 0.41%, and 1.07%, respectively. Domestic barley prices increased by 2.16%, 1.08%, and 3.24%, while domestic barley consumption decreased by 5.50%, 2.83%, and 7.01%, respectively.

It can be seen from the above study that the adjustment of China’s tariff policy made China’s barley consumption demand face a certain gap, but it has not promoted the large-scale development of China’s barley industry to satisfy the domestic consumption demand. This shows that in China, as a coarse grain, it is difficult to increase barley production in the short term, and the international market is still the main way to satisfy domestic consumption demand. Therefore, we propose the following policy recommendations: Firstly, a diversified barley import strategy should be implemented to avoid risks brought by a single channel. For example, break the situation of unified import prices and import sources of China’s malting barley and feed barley, and promote the diversification of import sources by refining the classification of China’s barley import varieties. Reduce the amount of feed barley imported from source countries of premium malting barley, such as Canada, and transfer the market share of feed barley to France, Russia, Ukraine, and Argentina. Secondly, an “industrial system + enterprise” alliance on barley should be established to focus on “targeted supply”, and ensure domestic consumption demand. National scientific research institutions should actively develop and cultivate barley varieties that can satisfy the requirements of processing enterprises, so as to form targeted supply for domestic processing enterprises. Through the establishment of a barley industry alliance, the close cooperative relationship between industry, university and research is realized. Promote the sustained and stable development of the domestic barley industry, gradually reduce the long-term high dependence on imports of domestic barley, and improve the ability to cope with trade risks. Thirdly, improve China’s bargaining power in barley international trade to avoid the risk of inefficient barley imports. For example, establish a Chinese barley processing enterprise alliance to standardize the management of barley import contracts. The bargaining power of domestic enterprises in barley import trade will be effectively improved by strengthening the centralized purchasing ability of enterprise alliances. Effectively avoid the potential risks in barley import trade and stabilize barley import price.

This study fully discusses the impact of China’s possible tariff policy adjustment on China’s barley industry under the changing trade relations between China and Australia, and more comprehensively reflects on the possible risks that China’s barley imports may face. This study can provide reference for the development of China’s barley industry, in order to satisfy the consumption demand for China’s barley and ensure the healthy development of barley industry chains.