Views on China s Food Security and Trade Jikun Huang Center for Chinese Agricultural Policy Chinese Academy of Sciences
China has 1.34 billion population, but its growth has been declining 3 2. 5 5 45 Economic growth will be a key driver of food demand 198=1 1 8% 7% 4 6% 2 1. 5 1. 5 197 198 199 2 21 22 23 35 3 25 2 15 1 5 1 9 8 1 9 85 199 1 9 95 2 2 5 2 1 2 15 2 2
Food consumption: fall in food grain but rise in other food consumption since mid-199s; Overall annual growth: +4% 12 Per capita food consumption (kg/person) 7 1 8 6 4 Rice 6 Wheat 5 4 3 2 Fruits Red meat and poultry Milk Fish 2 Other grains 1 Edible oil 198 1985 199 1995 2 25 29 198 1985 199 1995 2 25 29
4.5% of annual growth rate of agri GDP in past 3 years 8 Annual growth rate of agri GDP in 1978-21 7 6 5 4 3 2 1 1979-84 1985-95 1996-21- 5 26-1 About 4 times of population growth rate
Agricultural and food Trade: export and import (billion US$) 6 5 Agriculture Agri export Agri import 6 5 Food export Food Food import 4 4 3 3 2 2 1 1 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 1986 1988 199 1992 1994 1996 1998 2 22 24 26 28 21 China has been a net agri exporter in the past tdecades d except in recent years. Food self-sufficiency in 21: 98%
China s agricultural import and export 3 in 21 (million US$) 2 1-1 -2-3 Source: Calculated based on UNCOMTRADE data
China s agricultural import and export by destinations in 21 Import Export VIETNAM 2% AUSTRALIA 3% INDONESIA 4% MALAYSIA A A 4% INDIA 2% CANADA 5% ROW 1% USA 31% ROW 35% Japan 18% United States 12% THAILAND 6% ARGENTI NA 12% Brazil 21% Thailand 3% Vietnam Russian 3% Federation 3% Malaysia 3% Indonesia 3% Hong Kong, China 9% Korea, Rep. 7% Germany 4% Calculated based on WTO agri. Classification
CCAP s projection: China s net export of cereals (1 tons) under baseline in 21-2222 4-4 Rice Wheat Maize -8-12 21 22-16 -2 Source: Simulation by CAPSiM model based on policy until 28 Import maize: about 2 million tons
China s net export of agricultural commodities (1 tons) under baseline in 21-22 1-1 -2-3 -4-5 21 22-6 -7-8 Ric ice Wheat Maize Soy oybean Sug ugar Cot otton Veg egetable Fru ruit Por ork Pou oultry Bee eef Milk Fish Source: Simulation by CAPSiM model based on policy until 28
China s net export of agriculture and food (billion USD) under baseline in 21-22 Self-sufficiency in 22: Grain 87%; Food 96% 15 1 5-5 -1-15 -2-25 21 21 22 Proces ssed food Fish Milk Pork and poultry Beef and mutton Horticu culture Fibre Sugar Oilseed eds Coarse grains Wheat Rice
National goals and policies Grain: 95% self-sufficiency Increase agri productivity (given constraints of land and water): Invest in land/water Invest in technology
Policy responses: Invest in water China s #1 policy document in 211: Water Conservancy Reform and Development - Double investment in water conservancy: invest 4 billion yuan (63 billion US$) in next 1 years - Enhance water saving technology -
National Policy: Promoting Agriculture by Applying Scientific and Technological Advances Annual growth rate in agri. R&D (public): 2-29: 16% in real term 21-211: 2% In 28, China also initiated new agri GMO program with 3.8 billion US$. China s #1 policy document in 212: - New political commitment to invest in R&D, including agribiotech
Scenario: Impacts of biotech maize Maize self-sufficiency ffi i (%) in 29 and 225 1 9 GMO maize Baseline 8 29 225 Huang et al., 211
Major goals and policies Grain: 95% self-sufficiency Increase agri productivity: Invest in water/land Invest in R&D Subsidy (income transfer, 4% agri GDP) Price stability: Reserve/stock and minimal price Trade and FDI/Tech (e.g., in Africa) Export: vegetable; fruits; processed foods Import: soybean; maize; cotton; milk
China s import in 21-22 8 Soybean (million tons) 2 Maize (Million tons) 1 Cotton (Million tons) 7 18 9 16 8 6 14 7 ROW 5 ROW 12 6 Argentina 4 Brazil 1 5 USA 3 Argentina 4 8 USA 3 2 6 2 4 1 1 2 21 22 21 22 21 22 Source: Simulation by CAPSiM model based on policy until 28 ROW Inida USA
Implications for China s free trade in agriculture: in APEC and other regions Major gainers: USA, Canada, South America, and daustralia/new Zealand Other gainers: ASEAN countries, India, and African countries Likely major loser: East-Asia (e.g., Japan and Korea)
Views on TPP Official views: - Support multilateral FTA (WTO), and also any effort toward FTAs, including TPP - Examining pros and cons of TPP; no clear statement so far Personal views: - Could gains significantly from TPP in the long run - Depend on path of domestic reforms (e.g., STEs, investment policy in sensitive sector biotech )