China’s food imports in perspective

The only ‘cri­sis’ in China’s high­er grains import num­bers, wide­ly report­ed today, is in the minds of the media. The growth in imports is small and no cause for con­cern from a food secu­ri­ty per­spec­tive; it’s part of a long-term trend toward a high­er vol­ume of food imports that will be need­ed as Chin­abecomes a wealth­i­er coun­try. The Finan­cial Times reports on fears of a ‘food cri­sis’ fol­low­ing an appar­ent dou­bling of China’s grains imports: bq. The biggest changes were seen in grain imports as strate­gic stocks fell because of declin­ing annu­al har­vests every year since 1998. In the first half, Chi­na import­ed 4.1m tonnes of grain, or 1.8 times as much as in the same peri­od a year ago. The lev­el of China’s nation­al grain reserves is a state secret. But sev­er­al aca­d­e­mics said although the total har­vest this year is expect­ed to exceed last year’s by a small mar­gin, bur­geon­ing demand would ensure that grain reserves con­tin­ue to come under pres­sure this year and pos­si­bly in 2005. (“Finan­cial Times”:http://news.ft.com/cms/s/ed89a5ea-f465-11d8-9911–00000e2511c8.html) What this story—and many oth­ers like it—doesn’t tell you is that Chi­na has been vir­tu­al­ly self-suf­fi­cient in grain for many years with pro­duc­tion run­ning at 460 mil­lion tonnes last year. Even if it’s imports this year reached 8 mil­lion tonnes—three times last year’s imports of grains—they would rep­re­sent less than 2 per cent of China’s annu­al pro­duc­tion. In fact, China’s WTO-sched­uled import quo­tas for rice, corn and wheat add up to about 22 mil­lion tonnes this year. Chi­na is very unlik­ley to need to import that much; but even if it did so, imports would be less than 5 per­cent of con­sump­tion (pro­duc­tion + stocks + imports). The sto­ry is appar­ent­ly being pumped-up by China’s own media. “AFP”:http://www.channelnewsasia.com/stories/afp_asiapacific_business/view/102018/1/.html quotes Chi­nese sources as report­ing that the first half of the year saw China’s “first-ever agri­cul­tur­al trade deficit”. Even if this is true[1], the size of the report­ed deficit is tiny com­pared with China’s over­all trade: the agri­cul­tur­al short­fall rep­re­sents only three-quar­ters of one per­cent of China’s import bill last year. Chi­na remains almost self-suf­fi­cient in food pro­duc­tion as I explained in “my paper”:http://www.inquit.com/article/312/agriculture-in-an-fta-with-china for the recent con­fer­ence on the pro­posed free trade agree­ment in Syd­ney. It is cur­rent­ly the world’s ninth biggest food exporter and eighth biggest food importer. As it grows wealth­i­er, it will demand more of the foods that oth­er wealth­i­er coun­tries now con­sume in high­er vol­umes, par­tic­u­lar­ly high qual­i­ty grains, cere­al feeds for it’s own live­stock (pork, poul­try) and oth­er live­stock prod­ucts (beef, dairy). Chi­na does not have a com­par­a­tive advan­tage in this form of agri­cul­tur­al pro­duc­tion; in order to grow wealth­i­er, Chi­na must import more of these goods and export more of the goods for which it does have com­par­a­tive advan­tage (man­u­fac­tures). These trends are signs that Chi­na is becom­ing rich­er. They are not a mat­ter of food secu­ri­ty. Not even remote­ly. fn1. As far as I can see, it’s not: Chi­na record­ed a $2billion dol­lar deficit in 2003 accord­ing to “data(Excel spread­sheet: about 28k)”:http://www.ers.usda.gov/Briefing/China/Data/tbl-tradeworld.xls derived from China’s own sta­tis­tics by the US Agri­cul­ture Depart­ment

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