Estimating transport costs and trade barriers in China: Direct evidence from Chinese agricultural traders

Using a unique survey data on agricultural traders in China in 2004, this study provides direct evidence on the significance of inter-regional trade barriers and their key components. Our major findings are as follows. (1) The trade barriers within China are fairly small, accounting for about 20% of trade value. (2) Transport and non-transport costs respectively contribute 42% and 58% to the trade barriers. (3) Labor and transport-related taxes are the two largest proportions of total transport costs, and respectively account for 35% and 30%. (4) Artificial trade barriers created by the government are not sizable as we perceived. (5) Road quality is crucial for reducing transport costs within China: increasing transport speed by 1 km per hour, the total transport costs for Chinese agricultural traders would decrease by 0.6%, mainly due to improved fuel-burning efficiency and reduced labor requirement.     

The importance of the development banks for the financial infrastructure

In literature and practice the term “development bank” is commonly applied to investment banks for the financing of private projects which deserve to be promoted on general economic grounds. Their salient task is usually to provide medium- and long-term funds. Complementary consultative functions are occasionally performed as well while other bank transactions, especially of a short-term nature, and debit business were, as a rule, not considered. This concept of the purpose of a development bank has proved too narrow, too normative and too general.     

Cooperation with take-off countries

In consequence of the growing economic differences between the developing countries themselves, the Government of the Federal Republic of Germany has developed, alongside plans to combat absolute poverty, a concept for cooperation with relatively advanced developing countries. Rainer Offergeld, Federal Minister for Economic Cooperation, explains this concept.     

The role of the private and public sector in human capital formation

While there are strong equity and efficiency reasons for subsidizing education in developing countries, the prevailing dominance of governments in the financing and provision of educational services can be questioned. There is some evidence supporting the conclusion that a partial cost recovery through user fees may reduce the rationing of services which is still a pressing problem in many low-income countries, and that private providers tend to be more cost-efficient than their public counterparts.