Household Expenditure Of Western Fast Food In China

3218 words - 13 pages

AbstractThis study is to examine the effects of income and sociodemograhic factors on the household expenditure of western fast food in China. The data will be from urban household surveys conducted by the State Statistical Bureau of the People's Republic of China. Ordinary Least Square (OLS) is adopted in the regression estimation of the modelDec 2003Table of Content1. Introduction2. Research Scope and Objective3. Literature Review4. Theoretical and empirical model5. Data6. Conclusion7. Reference1. INTRODUCTIONUntil 1980s, China's food sector and food away from home (FAFH) consumption have relatively little value added. Most Chinese prepared meals at home with grain, raw vegetables, and meat produced at home, or purchased from state-run food stores or directly from farmers. As China's rapid income growth in the last 20 years due to the reforms, Chinese consumers are eating more meals in restaurants, café and dining halls in the last two decades. As a result, the share of consumer expenditures for food away from home (FAFH) has been increasing rapidly in urban China. The FAFH share of total food expenditures has steadily increased from 5.03% in 1992 to 14.7% at 2000. In 2000 per capita annual FAFH expenditures reached 288 yuan with the total FAFH expenditure 132 billion yuan in urban China. The FAFH expenditure growth in China is expected to continue because of the rising middle class and rapid urbanization and also due to its relatively low FAFH share compared with the USA (36.5% in 1992), Canada (32% in 1992), and other developed countires (Jensen and Yen (1996))After long period's negotiations, China officially became the 143rd member of the World Trade Organization (WTO) in December 2001. China's accession of WTO has been a significant trade issue to the many large trade countries. China are required to eliminate all non-tariff trade barriers and significant reduction of tariffs according to the commitment of the WTO accession. Tariffs on agricultural products will drop from an average of 22% to 17% by January 2004. Besides, China has eliminated most foreign-equity and geographic restrictions in all major service categories. China's service sector contributes about one-third of its GDP, and the food processing and service is a major component of the service sector. With one fifth of the world's consumers and its new membership in the WTO, many observers believe that China has large potential to become a major force in world food and service market.2. RESEARCH SCOPE AND OBJECTIVEThe increase in FAFH expenditure implies the creation of demand for high-value and specialty food products and high demand for restaurant services. FAFH consumption is an important component of China's food demand and the demand for restaurants services. Therefore, a better understanding of the factors associated with FAFH has become significantly important to explain changes in the market,...

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