Can Domestic Animal Husbandry Develop Independently? An Empirical Study of China's Beef Cattle Industry

Animal husbandry is an important industry for human survival. International trade not only affects the production, but also the consumption, of animal products in the domestic market. The question of whether domestic animal husbandry can develop independently in an open country is an interesting one. Through an empirical study of China's beef cattle industry, this paper answers a common question in academia, political circles, and business circles from the perspective of animal husbandry, namely, what kind of international relations are appropriate? The stable development of animal husbandry and the win-win result of openness may be two contradictory concepts in some cases. Therefore, a country's open-door policy should be considered in the same manner as the issue of national security. This study explores how China's beef cattle industry will react to the international impact of soybean and beef trade. In contrast to previous studies, we put beef and soybean imports into the same model and studied them simultaneously, which is more in line with actual industrial development. Based on the Error Correction Model (ECM) and Vector Autoregression Model (VAR), we found that: (1) soybean and beef import is impacting the domestic beef price in both the long- and short-term, but the short-term effects can be corrected to coincide with the long-term effects. (2) there is a long-term equilibrium relationship between import price (soybean and beef) and domestic beef price. (3) The price fluctuations of imported soybean and beef will affect domestic beef price in different ways. China's beef cattle breeding is mainly managed by smallholders, who lack modern management and cannot scientifically measure short-term and long-term interests.