Study on the Spatial Evolution of China’s Pulp and Paper Product Import Trade and Its Influencing Factors

Round 1

Reviewer 1 Report

This paper is more of a descriptive study, rather than a scientific contribution, and, as such, its originality and overall merit are relatively limited. Having said that, it could be rewritten so as to highlight its innovations, however small. 

So, my suggestion is to rewrite the abstract and intro throughly: place the researrch questions at the beginning, explain why they are relevant and analyse how the add to the literature. Move on to results. Explain whether they are intuitive/ interesting and whether they could help make prredictions for other sectors/countries/ future shocks. 

The related literature should also be extended.

There is a number of typos (eg lines 17, 35) and a number of sloppy/ badly phrased arguments (eg lines 77-80). Make sure you go through the paper and correct them. 

Finaly, I have question for the model. Have you tested for endogeneity? Is the inclusion of prices not risky in that sense?

Author Response

Response to Reviewer 1 Comments

Dear editor:

Thank you for your kind letters of “Manuscript ID: forests- 2274049” on 10- March-2023, and for the reviewers' comments concerning our manuscript entitled “Study on the Spatial Evolution of China's Pulp and Paper Product Import Trade and Its Influencing Factors”. We revised the manuscript in accordance with the editor's and reviewers' comments, and carefully proof-read the manuscript to minimize typographical, grammatical, and bibliographical errors.

Here below is our description on revision according to the reviewers' comments.

Comments and Suggestions for Authors

This paper is more of a descriptive study, rather than a scientific contribution, and, as such, its originality and overall merit are relatively limited. Having said that, it could be rewritten so as to highlight its innovations, however small.

Point 1: So, my suggestion is to rewrite the abstract and intro thoroughly: place the research questions at the beginning, explain why they are relevant and analysis how the add to the literature. Move on to results. Explain whether they are intuitive/ interesting and whether they could help make predictions for other sectors/countries/ future shocks.

Response 1:  Thank you for your kind comment. Adding a map and some additional data will look more intuitive and more clearly. some additional information that helps to understand the area under review have been given in detail in the paper. Due to the limitations of external factors such as tools and time, we have described the Area part of the paper in more detail, which we hope will be easier to understand.

The added part is as follows:

Abstract: The purpose of this research is to study the changes in the market structure of China's pulp and paper products imports. In particular, the import trade environment and market layout of Chinese pulp and paper products will change under the international context of the new crown virus epidemic, the Sino-US trade dispute and the domestic policy context of zero import of Chinese waste paper. This study attempts to fill the gap regarding the influencing factors of market structure, while contributing new ideas on China's trade in pulp and paper products. Based on the import and export trade of pulp and paper products data from 2005 to 2021, a trade gravity model was used to explore the changes in the share of China's trade partners of pulp and paper product imports and their factors. The results indicated that the outbreak of COVID-19 led to a significant increase in China's imports of packaging paper products, bringing about an increase in Indonesia's status as a partner in China's pulp and paper products trade. The U.S.-China trade dispute had an impact on pulp and paper products trade between the two countries, with China's tax countermeasures causing the U.S. to lose its status as a trading partner in China for pulp and paper products imports. The center of gravity for paper product imports has dispersed from the U.S. and Japan to Indonesia and Russia. The restrictions on waste paper imports have shifted the focus of China's paper raw material imports, with the U.S. no longer being the main importer of China's paper raw materials. Specifically, the main importers of wood pulp are Brazil and Chile, while the main importers of waste paper pulp are Thailand and Malaysia. In the future, China needs to continuously strengthen dialogue with the United States to resolve trade disputes and create a favorable environment for trade in pulp and paper products. At the same time, China's paper enterprises should strengthen the expansion of the Southeast Asian market, reduce dependence on the U.S. market, while China should continue to improve the wastepaper recycling system and improve the utilization rate of domestic wastepaper.

1. Introduction

As an in-depth participant in the global trade of pulp and paper products, China's trade market structure is affected by both the international environment and domestic policies. With the COVID-19 pandemic in 2019, the global economic downturn has led to a shock to the paper industry chain in various countries [1] and a disruption in the supply chain of pulp and paper products [2]. At the same time, the popularity of domestic online shopping under the epidemic has led to a significant increase in domestic demand for packaging paper products. The U.S. has always been an important pulp and paper products trade partner of China, but in September 2018, the U.S. government announced a 10% tariff on 22.2 billion worth of Chinese imports of pulp and paper products. As a negative external impact, the tariff policy is not conducive to the normal conduct of trade in pulp and paper products between China and the United States, and then affect China's pulp and paper products import trade market structure. For a long time, waste paper has been imported in large quantities as an important raw material for paper making in China. Moreover, the import of waste paper shows a high degree of market concentration and high market share in the United States. In this objective fact, the ever-tightening solid waste import restriction policy and trade friction between China and the United States has become the important factors affecting the import market structure of China's pulp and paper products. Coupled with the global supply chain crisis under the epidemic exacerbated trade protectionism, the international trade environment for raw materials and products of China's paper industry has changed. Therefore, within the new trade environment, the study of different factors on the impact of China's pulp and paper products import market structure is not only important for China's paper industry adapt to the new international trade environment, promoting industrial development, but also beneficial to promote the sustainable development of the world's forestry and provide reference for forestry industry decision-making.

A great deal of research has been done on the spatial evolution of the market structure of forest products in international trade. Some research shows that there is huge scope for future growth in forest product exports to China, with a significant increase in pulp and paper product imports from developing countries such as Chile, Indonesia, and Malaysia, with an increase in the importance of forest-rich countries in the Asia-Pacific region in supplying China's expanding demand for pulp and paper products [3, 4]. The tariff and non-tariff barriers will trigger a shift in the trade pattern of Chinese pulp and paper products, resulting in a decrease in the share of imports from countries with trade barriers and an increase in domestic production to achieve self-sufficiency [5-8]. The Natural Forest Conservation Program in China will increase the share of Russia in China's timber product imports [9]. The accession of China to the World Trade Organization has increased forest products imports, of which the share of the Association of Southeast Asian Nations has grown significantly, in addition to China's accession to the WTO and the combination of Uruguay will strengthen the competitiveness of North America and the EU in the Chinese forest products market [10]. As the largest importer of paper products and the fourth largest importer of pulp in China, the U.S. and China trade conflict will make the U.S. share decline, causing a negative impact on China's trade in pulp and paper products. Meanwhile, rising tariff costs have prompted Chinese companies to accelerate the development of emerging markets, bringing development opportunities for Russia, Europe, and countries along the Belt and Road [11, 12]. Indonesia is not only rich in forest resources with Sumatran rainforest [13], but also has a relatively stable political situation [14] which makes it a large importer of pulp and paper products for China [11]. As one of the emerging markets, the trade friction between China and the United States will provide an opportunity for Indonesia to increase its share [12, 15].

Studies on the factors influencing the import trade of pulp and paper products have focused on exploring the time variation of trade volumes, including supply and demand, price, environmental regulations and trade barriers. Among the supply and demand factors, the level of economic development of trade bilateral [16-22], bilateral distance [16,17,23], population [16], price [18,20,24], exchange rate [17,25], paper industry development [26], raw material supply [21,22], and product demand and supply [27-29] will affect the import of pulp and paper products. Among the environmental regulatory factors [30], forest resource restriction policies [25], waste paper import restriction policies [31-35], environmental information disclosure policies [36], carbon emission reduction [37], and environmental regulations [38-40] will affect the import of pulp and paper products in a country to varying degrees. Notably, China has been increasing its waste paper import control since 2017, which will have an impact on the trade pattern of the paper raw material market in China and globally [18], and the global waste paper import center will experience a shift from Europe to East Asia and then to Southeast Asia [32]. In addition, trade barriers [51] such as tariffs [19], Sino-US trade frictions [41-45], forest certification [46-48], and anti-dumping [49,50] are also influencing factors for the import of pulp and paper products. Meanwhile, the COVID-19 has ravaged the world since 2019, hitting almost all industries including the pulp and paper industry [52], with a decline in global demand for paper, supply chain disruptions, and price fluctuations of pulp and paper products [53], bringing negative impacts on the trade of pulp and paper products [54]. Most of the studies on factors influencing trade evolution have used qualitative analysis [34], multiple regression [22,24], trade gravity models [19,55], seemingly uncorrelated regression models [30], and neural network analysis [56,57].

In general, the research related to the factors influencing the trade of pulp and paper products includes three aspects: supply, demand and price, environmental regulation and trade barriers, however, there are fewer studies that include all three factors as variables in the model at the same time. In addition, most studies have explored the factors influencing the temporal variation of pulp and paper product trade volumes, and fewer studies have focused on explaining the spatial evolution of pulp and paper product trade. Therefore, under the background of the continuous deepening of the globalization pattern of pulp and paper product trade, this study takes the comprehensive background of COVID-19, Sino-US trade frictions, and wastepaper import restrictions as an entry point to study the factors influencing the spatial evolution of China's pulp and paper product imports, which is important for promoting the healthy development of China's paper industry.

Point 2: The related literature should also be extended.

Response 2: Thank you for your kind comment. We think your suggestion is reasonable and we have added some literature as reference of the paper as suggested.

The added reference is as follows:

3. TIAN, G. Study on China's Import Trade and Market in Main Forest Products. Chinese Forestry Science and Technology, 2005, 4(2):5.
4. White X. Meeting China's demand for forest products: an overview of import trends, ports of entry, and supplying countries, with emphasis on the Asia-Pacific region. The International Forestry Review, 2004, 6(3a4).
5. Muhammad A. The end of the trade war? Effects of tariff exclusions on US forest products in China. Forest Policy and Economics, 2021, 122(1).
6. Turner J, Maplesden F , Walford B , et al. Tariff and non-tariff barriers to New Zealand's exports of wood-based products to China. New Zealand Journal of Forestry, 2005, 50(1):27-33.
7. Robbins A S T, Perezgarcia J. Impacts of Illegal Logging Restrictions on China's Forest Products Trade. 2014.
8. Zhang, J.; Li, F.; Liu, Y.; Cheng, B. An Assessment of Trade Facilitation’s Impacts on China’s Forest Product Exports to Countries Along the “Belt and Road” Based on the Perspective of Ternary Margins. Sustainability ,2019, 11, 1298.
9. Yang H, Nie Y, Ji C. Study on China's timber resource shortage and import structure: Natural Forest Protection Program outlook, 1998 to 2008. Forest Products Journal, 2010(5):60.
10. Gan J B. Effects of China's WTO accession on global forest product trade. Forest Policy and Economics, 2004(6):6.
11. Jiang H, Guo H, Li J. Analysis on Market Characteristics of China's Forest Products Top Trade Partners. Forestry Economics, 2019.
12. Chen Y, Wang D, Haiying S U, et al. The Impact of Sino-US Trade War on Forest Products Trade and Its Countermeasures. Issues of Forestry Economics, 2019.
13. Bank T W. Indonesia - production forestry: achieving sustainability and competitiveness. 2015.
14. Sharma R. Indonesian Pulp and Paper Industry. Paper Asia, 2006, 22(3):9-11.
15. Bajpai P. Future Trends. Pulp and Paper Industry, 2015:315-320.
16. Nasrullah M, Liu C, Khan K, et al. Determinants of forest product group trade by gravity model approach: A case study of China. Forest Policy and Economics,2020, 113.
17. Guan Z, Sheong J. Determinants of bilateral trade between China and Africa: a gravity model approach. Journal of Economic Studies, 2020, ahead-of-print(ahead-of-print).
18. Tae-Young, Kim, Kyung-Ae, et al. The Effects of WTO Trade Facilitation on Bilateral Trade Flows: Spatial Gravity Model Approach. Korea trade review, 2014, 39(5):161-183.
19. Zhang H. A Review of Extensions and Applications of Trade Gravity Models. Business & Economy, 2010(2):3.
20. Bakouan M, Ouedraogo I M. Intra-African Trade and Spatial Dependence: Revisiting Africa Intra-Trade Determinants with a Spatial Structural Gravity Model. Theoretical Economics Letters, 2022.
21. Yue Y, Xie D. Study of Factors Influencing China-ASEAN Agricultural Product Trade Development in the Context of "the Belt and Road". Asian Agricultural Research, 2021, 12.
22. Joseph B . Gravity models of forest products trade: applications to forecasting and policy analysis. Forestry, 2016(2):117-126.

Point 3: There is a number of typos (eg lines 17, 35) and a number of sloppy/ badly phrased arguments (eg lines 77-80). Make sure you go through the paper and correct them.

Response 3: Thank you for your kind comment. Thank you for your kind comment. As a result of your comments, we have reviewed the language usage and grammar and made the necessary modifications. We revised the manuscript in accordance with the editor’s and reviewers’ comments, and carefully proof-read the manuscript to minimize typographical, grammatical, and bibliographical errors. We have invited a native speaker to fully polish the language and added the citations and references in the weakest sections.

Point 4: Finally, I have question for the model. Have you tested for endogeneity? Is the inclusion of prices not risky in that sense?

Response 4: Thank you for your kind comment. According to your suggestion, for the possible two-way causality problem of price variables and thus endogeneity, this paper uses the systematic GMM approach to test prices as endogenous variables, and finds that each model passes the overidentification test, and AR (1) rejects the original hypothesis of no autocorrelation, AR (2) accepts the original hypothesis of no autocorrelation, so the constructed dynamic panel model is reasonable. In addition, since the systematic GMM model and the previous fixed-effects panel model remain largely consistent in terms of positive and negative coefficients and significance of the explanatory variables. Therefore, it can be shown that the results of the econometric tests are still plausible after considering the endogeneity problem of the model.

The added part is as follows:

The static fixed effects panel model does not take into account the effect of pulp and paper product imports in the previous period on the current period, and the possible two-way causality between some explanatory variables and the explanatory variables. As a result, endogeneity problems occur in the model measurement estimation, resulting in biased and non-consistent model estimation results. Therefore, this study adds a one-period lagged term of the explanatory variables to the static panel model and uses the System Generalized Method of Moments (GMM) proposed by Blundell and Bond to estimate the dynamic panel model. Adding the explanatory variables with a one-period lag to the model as explanatory variables can improve the credibility of the estimation results and more accurately reflect the dynamic adjustment process of each economic variable. Based on the analysis above, the following dynamic panel regression model is developed.

where is the first-order lagged term of the trade volume share, and the other indicators are as before.

The table shows the estimation results for wood pulp, waste pulp, waste paper, newsprint and printing paper, packaging paper products, and industrial paper products. Firstly, the Sargan test of this study accepts the original hypothesis of "all instrumental variables are exogenous", i.e., the instrumental variables selected in this study are considered valid. Secondly, the autocorrelation (AR test) of the system GMM perturbation terms, the p-values of the AR (1) test are <0.1, rejecting the original hypothesis that there is no significant autocorrelation in the random perturbation terms of the model, and concluding that there is significant autocorrelation in the first-order autoregression. The p-values of AR (2) tests are all > 0.1, accepting the original hypothesis that the random disturbance terms of the model are not significantly autocorrelated. Therefore, the dynamic panel model constructed in this study is reasonable and the estimation results are reliable.

As shown in Table 6, the coefficients of the first-order lagged pulp and paper product trade volume shares are all significant, which indicates that the market share of pulp and paper product imports in the current period is closely related to the market share of that partner in the previous period, and the evolution of the market structure of pulp and paper product imports is a dynamic adjustment process. Meanwhile, the positive and negative coefficients of each explanatory variable, the significance and the findings of the previous fixed effects panel model remain largely consistent. It can be shown that the results of the econometric tests are still plausible after taking into account the endogeneity problem of the model.

Table 6 Results of systematic GMM estimation

Note: ***, **, and* represent significance levels of 1%, 5%, and 10%, respectively

Sincerely yours,

Huiying Cheng

Mingxing Hu

Author Response File: Author Response.docx

Reviewer 2 Report

The paper has been well prepared, and the following comments help make it more interesting for discussion by many interested parties.

·         The abstract does not include research methods and inappropriate use of keywords.

·         The phenomena of the Spatial Evolution of Pulp and Paper Products in international trade have yet to be disclosed in the introduction. The trade dispute between China and the United States and its impact on Indonesia as a partner in the trading of pulp products have yet to be disclosed in the background.

·         Articles need to add a separate section discussing the literature review, which forms the basis for developing the hypotheses tested in the Trade Gravity Model and Econometric model.

·         The discussion section on research results is strengthened by empirical support by disclosing the pros and cons of the findings.

·         Limitations and Prospects of the Paper are part of the conclusion.

Author Response

Response to Reviewer 2 Comments

Dear editor:

Thank you for your kind letters of “Manuscript ID: forests- 2274049” on 10- March-2023, and for the reviewers' comments concerning our manuscript entitled “Study on the Spatial Evolution of China's Pulp and Paper Product Import Trade and Its Influencing Factors”. We revised the manuscript in accordance with the editor's and reviewers' comments, and carefully proof-read the manuscript to minimize typographical, grammatical, and bibliographical errors.

Here below is our description on revision according to the reviewers' comments.

Comments and Suggestions for Authors

The paper has been well prepared, and the following comments help make it more interesting for discussion by many interested parties.

Point 1: The abstract does not include research methods and inappropriate use of keywords.

Response 1:  Thank you for your kind comment. We have revised the abstract and keywords as suggested.

The revised part is as follows:

Abstract: The purpose of this research is to study the changes in the market structure of China's pulp and paper products imports. In particular, the import trade environment and market layout of Chinese pulp and paper products will change under the international context of the new crown virus epidemic, the Sino-US trade dispute and the domestic policy context of zero import of Chinese waste paper. This study attempts to fill the gap regarding the influencing factors of market structure, while contributing new ideas on China's trade in pulp and paper products. Based on the import and export trade of pulp and paper products data from 2005 to 2021, a trade gravity model was used to explore the changes in the share of China's trade partners of pulp and paper product imports and their factors. The results indicated that the outbreak of COVID-19 led to a significant increase in China's imports of packaging paper products, bringing about an increase in Indonesia's status as a partner in China's pulp and paper products trade. The U.S.-China trade dispute had an impact on pulp and paper products trade between the two countries, with China's tax countermeasures causing the U.S. to lose its status as a trading partner in China for pulp and paper products imports. The center of gravity for paper product imports has dispersed from the U.S. and Japan to Indonesia and Russia. The restrictions on waste paper imports have shifted the focus of China's paper raw material imports, with the U.S. no longer being the main importer of China's paper raw materials. Specifically, the main importers of wood pulp are Brazil and Chile, while the main importers of waste paper pulp are Thailand and Malaysia. In the future, China needs to continuously strengthen dialogue with the United States to resolve trade disputes and create a favorable environment for trade in pulp and paper products. At the same time, China's paper enterprises should strengthen the expansion of the Southeast Asian market, reduce dependence on the U.S. market, while China should continue to improve the wastepaper recycling system and improve the utilization rate of domestic wastepaper.

Point 2: The phenomena of the Spatial Evolution of Pulp and Paper Products in international trade have yet to be disclosed in the introduction. The trade dispute between China and the United States and its impact on Indonesia as a partner in the trading of pulp products have yet to be disclosed in the background.

Response 2: Thank you for your kind comment. We have added the phenomena of the Spatial Evolution of Pulp and Paper Products in international trade in the introduction. Meanwhile, the trade dispute between China and the United States and its impact on Indonesia as a partner in the trading of pulp products have been added in the background as suggested.

The added part is as follows:

1. Introduction

As an in-depth participant in the global trade of pulp and paper products, China's trade market structure is affected by both the international environment and domestic policies. With the COVID-19 pandemic in 2019, the global economic downturn has led to a shock to the paper industry chain in various countries [1] and a disruption in the supply chain of pulp and paper products [2]. At the same time, the popularity of domestic online shopping under the epidemic has led to a significant increase in domestic demand for packaging paper products. The U.S. has always been an important pulp and paper products trade partner of China, but in September 2018, the U.S. government announced a 10% tariff on 22.2 billion worth of Chinese imports of pulp and paper products. As a negative external impact, the tariff policy is not conducive to the normal conduct of trade in pulp and paper products between China and the United States, and then affect China's pulp and paper products import trade market structure. For a long time, waste paper has been imported in large quantities as an important raw material for paper making in China. Moreover, the import of waste paper shows a high degree of market concentration and high market share in the United States. In this objective fact, the ever-tightening solid waste import restriction policy and trade friction between China and the United States has become the important factors affecting the import market structure of China's pulp and paper products. Coupled with the global supply chain crisis under the epidemic exacerbated trade protectionism, the international trade environment for raw materials and products of China's paper industry has changed. Therefore, within the new trade environment, the study of different factors on the impact of China's pulp and paper products import market structure is not only important for China's paper industry adapt to the new international trade environment, promoting industrial development, but also beneficial to promote the sustainable development of the world's forestry and provide reference for forestry industry decision-making.

A great deal of research has been done on the spatial evolution of the market structure of forest products in international trade. Some research shows that there is huge scope for future growth in forest product exports to China, with a significant increase in pulp and paper product imports from developing countries such as Chile, Indonesia, and Malaysia, with an increase in the importance of forest-rich countries in the Asia-Pacific region in supplying China's expanding demand for pulp and paper products [3, 4]. The tariff and non-tariff barriers will trigger a shift in the trade pattern of Chinese pulp and paper products, resulting in a decrease in the share of imports from countries with trade barriers and an increase in domestic production to achieve self-sufficiency [5-8]. The Natural Forest Conservation Program in China will increase the share of Russia in China's timber product imports [9]. The accession of China to the World Trade Organization has increased forest products imports, of which the share of the Association of Southeast Asian Nations has grown significantly, in addition to China's accession to the WTO and the combination of Uruguay will strengthen the competitiveness of North America and the EU in the Chinese forest products market [10]. As the largest importer of paper products and the fourth largest importer of pulp in China, the U.S. and China trade conflict will make the U.S. share decline, causing a negative impact on China's trade in pulp and paper products. Meanwhile, rising tariff costs have prompted Chinese companies to accelerate the development of emerging markets, bringing development opportunities for Russia, Europe, and countries along the Belt and Road [11, 12]. Indonesia is not only rich in forest resources with Sumatran rainforest [13], but also has a relatively stable political situation [14] which makes it a large importer of pulp and paper products for China [11]. As one of the emerging markets, the trade friction between China and the United States will provide an opportunity for Indonesia to increase its share [12, 15].

Studies on the factors influencing the import trade of pulp and paper products have focused on exploring the time variation of trade volumes, including supply and demand, price, environmental regulations and trade barriers. Among the supply and demand factors, the level of economic development of trade bilateral [16-22], bilateral distance [16,17,23], population [16], price [18,20,24], exchange rate [17,25], paper industry development [26], raw material supply [21,22], and product demand and supply [27-29] will affect the import of pulp and paper products. Among the environmental regulatory factors [30], forest resource restriction policies [25], waste paper import restriction policies [31-35], environmental information disclosure policies [36], carbon emission reduction [37], and environmental regulations [38-40] will affect the import of pulp and paper products in a country to varying degrees. Notably, China has been increasing its waste paper import control since 2017, which will have an impact on the trade pattern of the paper raw material market in China and globally [18], and the global waste paper import center will experience a shift from Europe to East Asia and then to Southeast Asia [32]. In addition, trade barriers [51] such as tariffs [19], Sino-US trade frictions [41-45], forest certification [46-48], and anti-dumping [49,50] are also influencing factors for the import of pulp and paper products. Meanwhile, the COVID-19 has ravaged the world since 2019, hitting almost all industries including the pulp and paper industry [52], with a decline in global demand for paper, supply chain disruptions, and price fluctuations of pulp and paper products [53], bringing negative impacts on the trade of pulp and paper products [54]. Most of the studies on factors influencing trade evolution have used qualitative analysis [34], multiple regression [22,24], trade gravity models [19,55], seemingly uncorrelated regression models [30], and neural network analysis [56,57].

In general, the research related to the factors influencing the trade of pulp and paper products includes three aspects: supply, demand and price, environmental regulation and trade barriers, however, there are fewer studies that include all three factors as variables in the model at the same time. In addition, most studies have explored the factors influencing the temporal variation of pulp and paper product trade volumes, and fewer studies have focused on explaining the spatial evolution of pulp and paper product trade. Therefore, under the background of the continuous deepening of the globalization pattern of pulp and paper product trade, this study takes the comprehensive background of COVID-19, Sino-US trade frictions, and wastepaper import restrictions as an entry point to study the factors influencing the spatial evolution of China's pulp and paper product imports, which is important for promoting the healthy development of China's paper industry.

Point 3: Articles need to add a separate section discussing the literature review, which forms the basis for developing the hypotheses tested in the Trade Gravity Model and Econometric model.

Response 3: Thank you for your kind comment. We have added a separate section of the article discussing the literature review as suggested, which forms the basis for developing the hypotheses tested in the Trade Gravity Model and Econometric model.

The added part is as follows:

2.1 Methods

The gravitational model originated from Newton's law of gravitation, which states that the gravitational force between two objects is positively related to the mass of the two objects and negatively related to the distances. Tinbergen and Poyhonen were the first who introduced the gravity model to the field of international trade [3], and subsequent studies have continued to expand the applicability of the models by adding new variables [58-60]. Due to the availability and high credibility of the data required by the gravity model, the trade gravity model has become more and more widely used and has become a major empirical research tool for international trade flows [58, 61]. Based on which, this study uses an extended trade gravity model to investigate the panel data of China's pulp and paper product imports. Panel data can be regarded as a mixture of time series and cross-sectional data, and therefore it is two-dimensional data. By introducing the panel data, it is possible for a study of the pattern of China's pulp and paper product import market over time as well as to obtain the pattern of trade changes of different trading partners. In addition, many previous studies on trade influencing factors have used ordinary least squares (OLS) to construct models [22-24], however, this approach ignores the problem of heterogeneity of different trade subjects, which can lead to biased results [58]. The extended trade gravity model can be flexibly applied to study the trade influencing factors of different agricultural and forestry products, taking into account heterogeneity and time evolution [58-65]. Also in this study, the F-test, LM-test, and Hausman test are conducted on the panel data to determine whether the model chooses mixed-effects regression, fixed-effects regression, or random-effects regression to ensure the optimality of model selection.

2.2.1. Theoretical analysis

According to international trade theory, the factors affecting the structure of a country's import trade usually involves demand side, supply side, price and cost, in-ternal and external environment. Considering the import trade characteristics of pulp and paper products, the following variables are selected in this paper.

(1) Demand side factors

Pulp and paper are an important basic raw material that can be used to produce a variety of cellulose products in addition to paper, which is widely used in food, textile, construction, pesticide, pharmaceutical, cigarette, daily chemical, petroleum, chemical, military and other industries. In addition, some construction materials are also directly mixed with the pulp to improve the performance of building materials. Therefore, the pulp and paper demand are highly correlated with the regional development level, specifically, the higher the level of economic development of a country or region, the higher its demand for pulp and paper products [18,19]. At present, China's wood re-sources are far from meeting the needs of the growing pulp and paper industry, and the more robust its import demand in the case of limited local pulp and paper. Therefore, GDP per capita on both sides of the trade is chosen as the influencing factor to charac-terize the demand side of the paper. In this article, the GDP per capita on both sides of the trade is used as a factor affecting the spatial and temporal evolution of China's import trade in pulp and paper products.

(2) Supply side factors

Pulp is processed from certain plants as raw materials, according to the different types of plants usually used for pulp raw materials can be classified into four categories: stem fibers, bast fibers, seed hair fibers and wood fibers. In particular, the wood fiber class is the most important. To make up for the shortage of raw materials, China has to import a considerable amount of pulp from external sources every year, and mainly wood fiber-based pulp products. From the perspective of supply, the forest resource endowment on the supply side is crucial, that is, China's imports of pulp and paper products will be influenced by the forest resource endowment of the trading partner [20]. In general, the richer the forest endowment on the supply side, the higher the quality of pulpwood, the greater the supply of pulp and paper products, and the greater the quantity of pulp and paper products China may import from those countries. In this article, the per capita pulpwood production of trading partners is chosen to measure the forest resource endowment, which is used as a factor affecting the spatial and temporal evolution of China's import trade in pulp and paper products for analysis.

(3) Price and cost factors

In microeconomics, price is one of the important variables in the process of re-source reallocation between demand and supply. Prices have the role of adjusting economic relations and regulating economic activity. In general, the higher the price of a good in the market, the lower the consumer demand for the good at a given level of consumption. Therefore, the change in the price plays the role of changing the quantity, direction, and structure of consumer demand. In the pulp product market, price as an indicator of pulp and paper product supply and demand will directly affect the import volume of pulp and paper products [18]. Therefore, this paper adds the import prices of various pulp and paper products to the model to qualitatively study the impact of price factors on import volumes.

The cost of import trade is one of the three main factors affecting trade growth. For pulp and paper import trade, the growth of China's pulp and paper trade will be in-fluenced by the import trade cost [16,25], which will then affect the dynamic evolution of China's overall pulp and paper trade imports. In this article, the import trade costs is used as a factor affecting the spatial and temporal evolution of China's import trade in pulp and paper products for analysis. Specifically, the economic distance between the two sides of trade is chosen to characterize China's import trade costs in this paper. The absolute difference in GDP per capita between the two sides of trade is used as a weight and multiplied by the capital distance to finally obtain the economic distance between the two sides of trade.

As a measure of the relative value of a country's currency, changes in the exchange rate index can also show the changes in international trade costs. For pulp and paper imports, an increase in the exchange rate index means that the devaluation of the country's currency is smaller than the devaluation of the currencies of major trading partners, which is favorable to imports and unfavorable to exports, the trade balance is prone to surpluses, and vice versa. Therefore, the change of exchange rate index will directly affect the import and export situation of pulp products [17,25]. In this paper, the exchange rate index of U.S. dollar against the currency of each trading country is se-lected as the influencing factor of import trade of pulp and paper products.

(4) International environmental factors

In September 2018, the United States announced a 10% tariff on $22.3 billion in exports of various pulp and paper products to China and increased the rate to 25% in June 2019. As an important import trade partner of China for pulp and paper, the reg-ulation seriously affects the friendly trade partnership between China and the United States [44], which in turn triggers a change in the trade structure of China's pulp and paper product imports. The trade friction between China and the U.S. will have a huge negative impact on the import volume of wood forest products in China, and the market structure of wood forest products imports will also change [45,66]. Therefore, this paper selects the trade friction between China and the U.S. as a dummy variable to join the model.

The global outbreak of COVID-19 pandemic in 2019 has had a significant impact on various industries, and the impact on wood forest products is mainly reflected in the global supply chain disruption it caused, which is profoundly affecting the international trade pattern [67]. On the one hand, the slow development or even suspension of na-tional economies under the impact of the epidemic and the inability of the paper in-dustry to operate normally make the global supply capacity of pulp and paper products decrease, resulting in inadequate supply. On the other hand, the surge in demand re-garding pulp and paper is mainly manifested by the prevalence of online shopping under the epidemic stimulating the growth of paper demand [68]. The resulting im-balance between global supply and demand of paper products will have certain impact on the import trade pattern of pulp and paper products in China, Therefore, this article selects COVID-19 epidemic as a dummy variable to join the model.

(5) Domestic policy factors

General Office of the State Council of the People's Republic of China first issued the "ban on the entry of foreign garbage to promote the implementation of the reform of solid waste import management system" in 2017. Afterwards, China's import restriction policy on waste paper has been upgraded and increased [69], opening a new era of zero import of waste paper. It will directly affect the import structure of paper raw materials and the import volume of paper products in China [31-33]. Therefore, in this study, the import restriction on waste paper is selected as a dummy variable.

In April 2016, the Ministry of Commerce of the People's Republic arbitration results showed that unbleached paper bag paper originating from the U.S., Europe and Japan was dumped in the Chinese market [70], the domestic unbleached paper bag paper industry in China was materially injured, and there was a causal relationship between dumping and material injury. Therefore, it was decided to impose a five-year an-ti-dumping duty on the unbleached paper bag paper imported from the United States, the European Union and Japan. Therefore, in this paper, anti-dumping duties are added as a dummy variable in the imports of packaging paper products and industrial paper products. According to the time of the policy enactment and implementation, this dummy variable BAN takes a value of 0 in 2005-2015 and 1 in 2016-2020 for the US, Japan and EU countries.

Point 4:  The discussion section on research results is strengthened by empirical support by disclosing the pros and cons of the findings.

Response 4: Thank you for your kind comment. We have revised the discussion section of the research results as suggested. The results of the research are strengthened by disclosing both positive and negative empirical support for the findings.

The revised part is as follows:

4. Discussion

4.1 Supply and demand factors

The results show that the economic development level of the trade bilateral affects the import market structure of some Chinese pulp and paper products. The increase in the level of economic development of both trading sides leads to an increase in the proportion of pulp and paper products imported by China from the trading partner country, which extends the findings of previous studies that the economic level of both trading sides affects the trade volume [16-22]. Also, the study found that the level of economic development of trade bilateral will affect the import market layout of importing countries as well. Trade partners of China's paper product imports with a cumulative proportion of imports in the top 70% include developed countries such as the United States, Japan, South Korea, Sweden, Canada and emerging market countries such as Brazil, Chile, Indonesia, etc. It also supports that China prefers to import paper raw materials and paper products from the trading partner with a higher level of economic development. Larger the economic distance between the two sides of trade, the smaller the comparative advantage of both parties will be. According to the theory of comparative advantage in international trade, the share of pulp and paper products imported by China from that trading partner becomes smaller. Compared to the geographical distance used in previous studies [16, 17, 23], this study finds that economic distance can more accurately explain the impact of bilateral trade gaps on the layout of import markets. China imports from these countries to make up for the raw material gap in paper production, since Canada, Brazil, Chile, and Indonesia have higher quality and richer wood pulp resources compared to China.

From the empirical analysis, this study finds that although the exchange rate will affect the quantity of Chinese pulp and paper products imported [17,25], it does not have a significant effect on the spatial market structure of pulp and paper products. Only the structure of the import market for wood pulp among Chinese pulp and paper products is significantly positively correlated with the per capita wood pulp production of the exporting countries, which indicates that China prefers to import wood pulp as raw material for paper production from countries with abundant wood pulp resources. The finding is consistent with the main view of factor endowment theory [20]. As for the price factor, it was found in this study that among all pulp and paper categories only the proportion on imports of wood pulp and packaging paper products is significantly negatively related to product prices [5], while the increase in prices of wood pulp and packaging paper products from trading partner countries will make China shift part of its import share to countries with lower prices [20].

4.2 COVID-19 epidemic, waste paper restrictions and US-China trade friction

The outbreak of the COVID-19 epidemic caused China to reduce imports of most pulp and paper products except packaging paper, while significantly boosting imports of paper products for packaging, which is consistent with the view of Juntao Fang [73]. The adverse impact of the global spread of COVID-19 will reduce China's GDP by 2.27-3.28% [1], and both domestic secondary and tertiary industries will suffer from the impact, with a pessimistic consumer expectation, a decrease in domestic demand for paper, and a decrease in the proportion of pulp and paper products imported [73]. However, the demand for packaging logistics stimulated the import demand for packaging paper products in China due to the rapid development of online shopping as people's travel was restricted under the virus epidemic [70,71]. The COVID-19 epidemic brought more changes in the import volume of pulp and paper products, with no significant impact on the changes in market structure.

China's paper raw material structure has a high proportion of waste paper, while the market concentration of waste paper and paper product imports is high with a high market share of the United States. Under the objective fact, the ever-tightening solid waste import policy and the trade friction between China and the United States have become important factors affecting the trade of pulp and paper products in China [11, 12]. The United States is the first source of waste paper in China, however, under the restriction of zero solid waste import, China started to turn its attention to wood pulp and waste paper pulp. Since Brazil, Chile, and Indonesia have high quality wood pulp and the world's major recycled fiber pulp production lines are concentrated in Southeast Asia [72], the waste paper restriction has shifted China's raw material imports from the United States to South America and Southeast Asia, which coincides with Ma ZJ's view [32]. Meanwhile, the shortage of recycled fiber has also limited China's finished paper production, and under the trade friction between the U.S. and China, China is meeting domestic demand for paper by increasing imports of paper products from trading partners outside the U.S. As a result, the import of finished paper has also gradually shifted from the United States to forest endowed countries such as Indonesia and Russia.

Point 5:  Limitations and Prospects of the Paper are part of the conclusion.

Response 5: Thank you for your kind comment. We have moved the limitations and prospects of the paper to the conclusion section as suggested.

The added part is as follows:

5.1 Conclusion

In this paper, the factors affecting the spatial evolution of China's imports of pulp and paper products in the background of the COVID-19 epidemic, waste paper import restrictions and Trade disputes between China and the United Statess are analyzed according to the expanded trade gravity model and fixed effects model, the conclusion of the study shows that:

(1) The increase of bilateral economic development will significantly increase the proportion of wood pulp, waste pulp and packaging paper products in the import structure of China's pulp and paper products. The level of economic development on both the supply and demand sides of the trade is very significant. In this paper, the stable economic growth of both sides promotes the consumption of paper products, thus increasing the import of papermaking raw materials and packaging paper products in China.

(2) The import proportion of pulp and paper products is negatively related to the cost factors of trade prices (including import prices, economic distance and exchange rates). In particular, the increase in import prices will significantly reduce the proportion of China's imports of wood pulp and packaging paper products, while the increase in economic distance significantly reduces the proportion of China's imports of wood pulp, waste paper, newsprint and printing paper, and industrial paper products, The increase in the exchange rate index significantly reduces the proportion of China's imports of waste pulp, and China tends to import pulp and paper products with lower trade prices and costs.

(3) The COVID-19 epidemic outbreak significantly increased China's packaging paper product imports, while it showed a non-significant correlation with other pulp and paper product imports. The state of declining demand for packaging paper products at the beginning of the epidemic will improve with the coming of the post-epidemic era and the rapid development of the e-commerce logistics industry. The increase in demand for packaging paper imports has led to a rapid rise in the position of Indonesia as China's main trading partner for paper imports.

(4) The implementation of import restrictions on waste paper significantly promotes the import of wood pulp, waste pulp and various paper products in China. Due to the huge demand for paper products in China, the restriction on wastepaper has prompted China's paper companies to start increasing the import of wood pulp and waste pulp to replace wastepaper to meet China's demand for paper raw materials, The focus on raw material imports shifts from North America to South America and Asia Pacific. In addition, various types of paper products, especially newsprint and printing paper, packaging paper products, the proportion of imports will also increase accordingly. The Asia-Pacific region, such as India and Indonesia, is gaining ground as a trading partner with China.

(5) Trade disputes between China and the United States significantly reduce China's imports of wood pulp, wastepaper and packaging paper products. As the United States was China's main import trade countries of wood pulp, wastepaper and packaging paper products, China's response to trade frictions between China and the United States in the imposition of tariff measures, to a certain extent inhibit the normal import of pulp and paper products, especially the raw materials for paper. Showing a decline in U.S. partner status, the Southeast Asia region has gained in importance.

5.2 Limitations and Prospects

In terms of the influencing factors of pulp and paper products trade, although this paper has set common control variables for different pulp and paper products and their own specific control variables, trying to find the most suitable control variables for each variable so that the regression results are more reliable, the final selected control variables do not depart from the previous experience and lack innovation. In addition, due to the limitation of space and workload, this paper cannot study the influencing factors for all the trading partners of pulp and paper products in China, and can only try to make the trade data representative by using the top 70% of the trade volume. Finally, this paper is only a descriptive analysis of the market structure of pulp and paper products, and does not verify the spatial relevance of China's pulp and paper trade through spatially relevant indicators such as the Moran index, which will be the direction of future efforts in this study.

In future research, we try to quantitatively measure the spatial relevance of China's pulp and paper product trade through spatially correlated indicators, and predict the future spatial structure trend of pulp and paper trade through scenario analysis with the help of the empirical findings of this paper.

Sincerely yours,

Huiying Cheng

Mingxing Hu

Author Response File: Author Response.docx

Reviewer 3 Report

The article raises a relevant topic and reflects new findings that might have practical use. It was interesting to learn more about Chinese import structure of forest products and the impact of COVID-19 and US-China trade wars. However, this paper still needs some clarifications and improvements.

1) It is not clear enough how the authors obtain formula 2 from formula 1. The first four terms are obviously obtained by the properties of the logarithm. But why coefficients beta6-10 are without logarithms? What does alpha_i mean? Fixed effects?

2) lines 120, 253: It would be nice to write about the anti-dumping duty in more detail

3) Formula 3: I'd suggest to reformulate it as... Beta_k * Xk, where k= 1...8

4) There is a discrepancy between formula 3, where the authors present OLS model without any time index and the section 3.2.1 where they actually use fixed effects model.

5) line 127: what does the term "spatial evolution" mean? How is it measured?

6) Table 1. It would be very useful to supplement the table with the current shares of each country in Chinese import.

7) It would be nice to add a comment on Figure 2c, where the Thailand's share declined from 65% in 2006 to 15% in 2011. What was the reason of such change?

Author Response

Response to Reviewer 3 Comments

Dear editor:

Thank you for your kind letters of “Manuscript ID: forests- 2274049” on 10- March-2023, and for the reviewers' comments concerning our manuscript entitled “Study on the Spatial Evolution of China's Pulp and Paper Product Import Trade and Its Influencing Factors”. We revised the manuscript in accordance with the editor's and reviewers' comments, and carefully proof-read the manuscript to minimize typographical, grammatical, and bibliographical errors.

Here below is our description on revision according to the reviewers' comments.

Comments and Suggestions for Authors

The article raises a relevant topic and reflects new findings that might have practical use. It was interesting to learn more about Chinese import structure of forest products and the impact of COVID-19 and US-China trade wars. However, this paper still needs some clarifications and improvements.

Point 1: It is not clear enough how the authors obtain formula 2 from formula 1. The first four terms are obviously obtained by the properties of the logarithm. But why coefficients beta6-10 are without logarithms? What does alpha_i mean? Fixed effects?

Response 1:  Thank you for your kind comment. Firstly, Equation 2 is obtained from Equation 1 by taking the logarithm form. The logarithm of PRICE in front of the sixth variable should also be taken, and the logarithmic sign in front of PRICE was omitted in the original draft. However, the logarithm was taken for the variable PRICE in the calculation, so this did not adversely affect our results, and our results are still reliable. As for coefficients beta7-10 are without logarithms since variables 7-10 are dummy variables (0 or 1) and therefore cannot be logarithmic. Finally, alpha_i means fixed effects. We have explained the explanation of alpha_i in the manuscript.

Point 2: lines 120, 253: It would be nice to write about the anti-dumping duty in more detail.

Response 2: Thank you for your kind comment. We have added more details about the anti-dumping duty as suggested.

The added part is as follows:

Chinese anti-dumping duties are imposed mainly on the United States, Japan and Europe. Specifically, in April 2016, the Ministry of Commerce of the People's Republic arbitration results showed that unbleached paper bag paper originating from the U.S., Europe and Japan was dumped in the Chinese market, the domestic unbleached paper bag paper industry in China was materially injured, and there was a causal relationship between dumping and material injury. Therefore, it was decided to impose a five-year anti-dumping duty on the unbleached paper bag paper imported from the United States, the European Union and Japan.

Point 3: Formula 3: I'd suggest to reformulate it as... Beta_k * Xk, where k= 1...8

Response 3: Thank you for your kind comment. We have modified Formula 3 as you suggested.

, where k= 1...8.

.

Point 4:  There is a discrepancy between formula 3, where the authors present OLS model without any time index and the section 3.2.1 where they actually use fixed effects model.

Response 4: Thank you for your kind comment. We have realized that there is a discrepancy between formula 3, where we present OLS model without any time index and the section 3.2.1 where we actually use fixed effects model. Actually, we used a fixed effects model instead of OLS model without any time indications, so, based on your suggestion, we have modified the OLS model to a fixed effect model.

The modified part is as follows:

The fixed effect model is a panel data analysis method, which is characterized by the same slope coefficient but different intercept terms for different cross-sections or different time series. In this study, the individual fixed effects refer to the model in which only the intercept term differs for different time series (individuals). The marginal effects are the same for the explanatory variables of the panel data regression model on the explanatory variables, both in time and individually. Except for the explanatory variables of the model, the effects of all other certain variables that affect the explanatory variables vary only with individuals and not over time. The basic equation is as follow.

Where i denotes different trading partners of pulp and paper products and t denotes time,  is Trade share of China's main import trading partners for pulp and paper products,  is the intercept term， is the error term.

Point 5:  line 127: what does the term "spatial evolution" mean? How is it measured?

Response 5: Thank you for your kind comment. We have added an explanatory note on spatial evolution as suggested. Spatial evolution refers to the linear migration change of the research subject in space-time, which is the relative change of the subject's position at a time compared with the starting position. In this paper, spatial evolution mainly refers to the changes in market patterns. Specifically, the changes in the market patterns of China's pulp and paper products' import trading partners over time, and is measured by the change in the trade share of the trading partners.

Point 6:  Table 1. It would be very useful to supplement the table with the current shares of each country in Chinese import.

Response 6: Thank you for your kind comment. We have supplemented the current shares of each country in Chinese import in Table 1 as suggested.

The supplemented part is as follows:

Table 1. Major trading partners selected and Trade share in 2021.

Point 7:  It would be nice to add a comment on Figure 2c, where the Thailand's share declined from 65% in 2006 to 15% in 2011. What was the reason of such change?

Response 7: Thank you for your kind comment. I am very sorry for the mapping error here in the original draft. Since the implementation of China's waste paper restrictions in 2017, China's imports of waste pulp have only started to increase significantly, so this paper should plot the imports of waste pulp from 2017-2021, i.e., the horizontal coordinate should be 2017-2021 instead of the four years 2006, 2011, 2016, and 2021 in the original manuscript, and the bar chart 2(c) is now redrawn as follows.

So actually Thailand's share of waste pulp imports was down from 65% in 2017 to 15% in 2018. Regarding why the import volume of waste stop pulp declined from 65% in 2017 to 15% in 2018, this paper adds the following explanation:

After the implementation of waste paper import restrictions in 2017, China started to import a large amount of waste pulp, and Southeast Asian countries saw the huge potential of exporting waste pulp to China at this time, so they increased the import volume of waste paper and processed it into recycled fiber pulp for export to China, and China's waste pulp import concentration declined year by year, thus Thailand's share fell from 65% in 2017 to 15% in 2018, while the shares of other Southeast Asian countries outside Thailand began to rise since 2018.

Sincerely yours,

Huiying Cheng

Mingxing Hu

Author Response File: Author Response.docx

Round 2

Reviewer 1 Report

I have no further comments except thst maybe you could reduce the abstract.

Reviewer 2 Report

I appreciate that “Manuscript ID: forests- 2274049” with the title “Study on the Spatial Evolution of China's Pulp and Paper Product Import Trade and Its Influencing Factors” has been revised according to the comments given. Manuscripts that have been scientifically revised are of much higher quality and contribute to theory development. Congratulations for your hard work and I can receive the revised manuscript well