China’s food trade deficit

News agen­cies are mul­ti­ply­ing “reports”: of a $5bn food trade deficit this year for Chi­na. Most of the wire copy­ists are, appar­ent­ly, not smart engough to ask them­selves the obvi­ous ques­tion. “So what?”. Chi­na is vir­tu­al­ly self-suf­fi­cient in food pro­duc­tion and is easly able to han­dle food imports on such a small scale rel­a­tive to pro­duc­tion or to income. Chi­na’s Novem­ber 2004 month­ly mer­chan­dise trade sur­plus was “larger”: than this pro­ject­ed annu­al food trade deficit. Chi­na’s share of glob­al pro­duc­tion in many essen­tial food items is a mul­ti­ple of their huge share of glob­al pop­u­la­tion. It’s a big coun­try, with more mouths to feed than any oth­er, but it is not a hun­gry coun­try.

In fact, the “Peo­ple’s Daily”: report quotes a clar­i­fi­ca­tion from the Chi­nese Min­istry of Agri­cul­ture that there is noth­ing in the cur­rent deficit to cause con­cern and that grains imports could be dou­bled with­out imports rep­re­sent­ing a threat to domes­tic self-suf­fi­cien­cy. I “agree”: I sus­pect, how­ev­er, that some of Chi­na’s agri­cul­tur­al indus­tries are hav­ing more dif­fi­cul­ty adjust­ing to unfa­mil­iar import com­pe­ti­tion than the reas­sur­ing tone of the Min­istry of Agri­cul­ture indi­cates. I would not be sur­prised to find that agri­cul­tur­al trade becomes a point of con­tention in this year’s Aus­tralia-Chi­na FTA negotiations.

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