Introduction of China’s vinegar export and comparison with Italy & South Korea

From 2011 to 2020, the volume and value of China's exports of vinegar products have steadily increased,?rising from US$10.58 million in 2011 to US$21.92 million in 2020, doubling in ten years, even with the impact of the epidemic in 2020 continued to grow. In 2020, Chinese vinegar products were exported to 110 countries and regions, mainly to Hong Kong SAR, the United States, Australia, Singapore, Macau SAR, Malaysia, the Netherlands, Japan, Canada and Russia. In 2011, China's total vinegar exports ranked ninth in the world, and it has risen since then. However, since 2012, China's ranking has been in the seventh or eighth place without significant changes. Although China's vinegar exports continue to increase in terms of absolute export value, the relative position has not changed much, and other competitors are also increasing their output and export value.

Despite showing a good trend, the export of Chinese vinegar products still does not have strong international competitiveness compared with Italy and South Korea (Figure 6). The export value of Italian vinegar products has basically remained at about 300 million US dollars, which has increased from 290 million US dollars in 2011 to 320 million US dollars in 2020. It is a well-deserved leader and has always been the world's largest exporter of vinegar products. South Korea is a rising star in the international vinegar product market, exporting only about US$4.25 million in vinegar products in 2011. However, since 2016, the export of vinegar products from South Korea has grown rapidly. The export value in 2019 has more than tripled that of 2016, at about 34.55 million US dollars, and in 2020, it has reached a record 52 million US dollars. South Korea has become the third largest exporter of vinegar products in the world, surpassing China, Japan and other countries (Table 1).

Index analysis and comparison with Italy & South Korea

International market share (MS)

As can be seen from the figure, from 2011 to 2020, the international market share of China's vinegar product exports, although still not high, has steadily increased, except for a brief stagnation from 2015 to 2017, and the negative impact of the pandemic has generally shown an upward trend in the rest of the time, indicating that the export competitiveness of Chinese vinegar products is indeed increasing. Italy is still the absolute leader in the global export of vinegar products, always accounting for more than 40% of the global export share. However, its trend is deteriorating, and it has continued to decline since 2011, especially since 2015, it has been below 50%, although Italy still takes the lead in the export of vinegar products, but the situation in the future is obviously not ideal and will be subject to more and more competition and impact. South Korea is very special. In 2011-2014, the export of Korean vinegar products fluctuated and the situation was not stable. However, since 2015, South Korea's vinegar product exports have grown by leaps and bounds, and far surpassed China's in 2019. In 2020, South Korea's vinegar product exports are still growing rapidly in the context of the pandemic, accounting for 6% of global exports. Far surpassing China and Japan, it has become the third largest exporter in the world.

International Trade Competitiveness Index (TC)

Judging from the TC index (Table 2), the competitiveness of China's vinegar product exports has been declining from 2011 to 2015, which is different from the MS index. In addition to the increase in exports, the import of vinegar products has also increased in recent years, thus weakening the trade competitiveness. From 2015 to 2020, the continuous increase in the export of vinegar products in China and the decrease in the import volume have led to a steady increase in trade competitiveness, reaching 0.51 in 2020, showing strong trade competitiveness. Italy's TC index is also strong, consistently staying above 0.8, and although the index fell in 2018 and 2019, it quickly returned to an extremely high index of 0.86. Italy's TC index also does not match the MC index. Although the proportion of Italian vinegar products exported to the international market has continued to decline in the past decade, its TC index has remained relatively stable, which still proves Italy's huge advantage in the field of vinegar product exports. South Korea's TC index changes are similar to the trend of MS index changes. It was extremely unstable from 2011 to 2015, and even had a net import situation of -0.11 in 2014. It began to gradually increase in 2016, and reached the level in the last two years. 0.59, with strong competitiveness.

Index of Revealed Comparative Advantage (RCA)

??As can be seen from the above table (Table 3), the TCA index of China's vinegar product exports basically remains at around 0.2. Although the export volume of vinegar products itself has increased, the export of other items has also increased. Compared with other products, the proportion of vinegar is basically It is stable and lacks obvious international competitiveness. Italy's TCA index remained above 18 from 2011 to 2014, with undisputed global competitiveness, almost monopolizing half of the world's vinegar exports. However, since 2015, the TCA index has continued to decline, and it is only 14 in 2020. These figures show that the export of Italian vinegar products has always sold well in the world, but its relative competitiveness has been slowly declining and is increasingly challenged. South Korea's MS, TC, and RCA index changes are similar, with large fluctuations from 2011 to 2015, and began to increase rapidly from 2015 to 2020, and its RCA index reached 2.2 in 2020. It can be seen that the export of vinegar products in South Korea already has considerable international competitiveness. Following this trend, it is very likely to become an important export product in the future.

Regression?

Traditional trade gravity models mostly use two variables, geographic distance and economic size. Because the trade gravity model is easy to learn and has strong practicability, more and more scholars have added more variables that may affect bilateral trade into the trade gravity model. Adding variables such as the same regional organization, common language, and population size expands the original gravity model and applies it to the study of international trade issues.

Based on this, the author added variables such as the population of the export target country, cultural distance, whether it is influenced by Confucian culture, and whether it is an APEC member into the traditional trade gravity model. The improved model is as follows:

lnTradeijt = β0 + β1 lnGDPit + β2 lnGDPjt ??β3 lnDISij ??β4 lnCULDISij + β5 lnPOPit + β6 lnPOPjt + β7 ConCUL + β8 APEC + μij

where Tradeijt represents China’s vinegar exports to country i in year t, GDPit and GDPjt represent the GDP of China and the sample country in year t, POPit and POPjt represent the population of both sides, DISij and CULDISij represent the geographic distance between China and the sample country, respectively and cultural distance. CONCUL and APEC are dummy variables, which represent whether they are influenced by Confucian culture and whether they have joined APEC.

Sample

The author selects 132 countries and regions as the object of this empirical study. The basis for selection mainly includes:

1. During the selected 10-year period from 2011 to 2020, these countries and regions have accurate or approximate cultural dimension data.

2. These 132 countries and regions are located on different continents of the world and belong to different cultural circles. They are very different in terms of cultural background, economic environment and political system, and are of great research value.

3. On the basis of vinegar export and cultural dimension data, maximize the sample size to ensure the accuracy of regression analysis.

From the regression result, it can be concluded that cultural distance has had significant negative effect on ?China’s vinegar export, which is in line with the previous hypothesis and validates the validity of the theory. In addition, China's GDP and the GDP of export target countries have played a significant positive role. The demographics of the exporting countries, as well as geographic distance, had significant negative effect. Confucian culture has played a positive role in China's vinegar export, but not significantly. APEC membership has had significant positive effect, reducing trade barriers and promoting imports and exports.?

Suggestions

(1). Strictly control the quality of vinegar products

In view of the problems that vinegar exports did not meet foreign inspection and quarantine standards and suffered trade barriers in the past, Chinese enterprises should actively improve product quality and strictly implement the procedures from raw material production, procurement, brewing, laboratory inspection, packaging, storage and transportation, export trade and after-sales, etc. A series of quality assurance systems throughout the process. Chinese vinegar producers should try their best to avoid technical trade barriers and failure of product inspection and quarantine to hinder the export trade of vinegar, resolutely prevent the use of banned pesticides, fertilizers and other substances in the process of raw grain cultivation, and also prohibit the use of genetically modified technology to ensure raw material processing. It is pollution-free, green and environmentally friendly, and at the same time, it strictly controls food additives and microbial contamination that may be caused during the production process. At the same time, strict international certification HACCP system is implemented for all vinegars, and the production and processing process of vinegar products is strictly controlled.

(2). Strengthen technological innovation and talent introduction

Chinese vinegar manufacturers should increase investment in research and development, improve technological innovation capabilities, and make products, equipment and processes high-end. Carry out exchanges and cooperation with high-quality enterprises in Japan and South Korea, and transfer R&D centers to developed regions or countries, so that enterprises can timely grasp the latest scientific and technological achievements in the industry and attract scientific research talents. At the same time, improve the salary of outstanding employees to introduce and cultivate professional labor and technical personnel for the vinegar factory, not only to vigorously introduce talents in improving the quality of vinegar products, development of new vinegar varieties, inspection and quarantine, but also to cultivate high-quality international marketing and Product Promoter. Marketing personnel should cultivate the ability and skills of cross-cultural communication, set up special training courses in language training and trade negotiation management to improve their quality, and design marketing methods in line with the local market.

(3). Product differentiation and personalization

Since cultural differences have a significant negative impact on China's vinegar exports, when exporting, enterprises should conduct differentiated production and packaging for countries with different cultures, and conduct product customization to maximize export efficiency. For example, for countries that are geographically and culturally close to my country, such as Japan, South Korea, and Southeast Asia, and their eating habits are relatively similar to those of my country, they should focus on exporting authentic vinegar. In the case of adapting to the tastes and eating habits of the local people, fruit vinegars that are relatively suitable for the tastes of foreign consumers should be introduced into the local market.