Defusing the Risks of Agricultural Product Import Trade by Outward Foreign Direct Investment
Outward foreign direct investment(OFDI)is an effective approach for China's agricultural enter-prises to defuse the risks of agricultural product import trade.As the import volume of agricultural products keeps growing in recent years,China's weight in global agricultural trade flow has increased,accompanied by the risks of overhigh prices and limited access to import products.The former is resulted from the incomplete and asymmetric information in basis trading.In addition,the multiple logistics links in overseas agricultural supply chains and long import navigation time have led to the supply chain risk of slow transportation.The OFDI for integration into the global agricultural supply chain building and important assets in key links such as warehousing,logistics,processing,and trade in the overseas agricultural product supply chain can boost China's agricultural enterprises in terms of mastering grain sources to hedge against the risks of overhigh prices and limited access to import products.A trading information system should be built to mitigate the risk of overhigh prices.The deep integration into the operation and management of the global agricultural product supply chain can attenuate the risk of slow transportation.These measures,to some extent,can internalize the risks of agricultural product import trade and create internalized benefits.This article proposes suggestions from the perspectives of enterprises,industries,and policies to promote the OFDI of China's agricultural enter-prises.
Outward Foreign Direct Investment(OFDI)Import of Agricultural ProductsTransaction CostsSupply Chain StabilityAdvantages of Internalization
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