China’s food trade deficit

News agencies are multiplying “reports”:http://english1.peopledaily.com.cn:80/200412/31/eng20041231_169301.html 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”:http://www.cnn.com/2003/BUSINESS/11/13/china.trade.reut/ 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”:http://english1.peopledaily.com.cn:80/200412/31/eng20041231_169301.html 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”:http://www.inquit.com/article/323/chinas-food-imports-in-perspective. 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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