China adjusts its food security strategy amid new trends in agricultural trade
After joining the WTO, China became the country with the most open and fastest-growing agricultural product market in the world, so today's food and food security issues are particularly important.
In 2015, the national food security strategy was moderately adjusted, establishing the principle of moderate imports, but with two guarantees as the precondition——ensuring the basic self-sufficiency of grain and cereals, and ensuring absolute security of staple foods. Under these two guarantees, everything else can be negotiated, but that does not mean negotiation without conditions.
Food security strategy adjustment stems from new development
Over the past 15 years, China has imported large quantities of grain, mainly soybeans, and China's agricultural product trade deficit has reached nearly 40 billion US dollars, which represents a major market opportunity for the world. Although national grain production achieved eleven consecutive years of growth over the same period, and the share of value added from the primary industry has reached 20.7%, the most important opportunity now is not a production opportunity but a market opportunity.
Although global warming presents more challenges than opportunities for the world, current and future grain supplies at home and abroad are generally sufficient for some time to come.
68%-70% of China's arable land is inland. Global warming brings increased pests and diseases and more extreme weather, but it also has benefits, such as increased rainfall. This is very notable in Northeast and Northwest China, where rainfall has increased substantially in recent years. The reasons are, first, the contribution of science and technology, and second, the favorable side of climate change. So we must look at problems dialectically.
Another notable feature of agricultural production is the large-scale application of science and technology and the improvement of agricultural production conditions in developing countries. For example, production conditions in Southeast Asia have improved, and rice production efficiency has increased. In addition, thanks to the joint efforts of international organizations and the Chinese government in carrying out “South-South cooperation”, Africa's actual production capacity has greatly increased. Relevant institutions predict that it may increase further in the future.
With global grain supplies sufficient, China's grain gap will also operate above the warning line for a long time. Apart from corn, China's self-sufficiency rates for the other two major grains are also relatively high. From 1957 to 2014, the world food price index generally declined. This is the result of scientific and technological progress and management innovation across all humanity, the result of international organizations helping developing countries, and also the result of cooperation between China and other major developing countries——such as India and Brazil.
The ability to respond to risks is most important
During China's “13th Five-Year Plan” period, China will continue to strengthen agricultural modernization. The Fifth Plenary Session of the 18th CPC Central Committee proposed “vigorously advancing the pace of agricultural modernization”, which will further consolidate the foundation of agricultural trade. Raising the level of modernization naturally includes improving agricultural production capacity and the ability to respond to risks. For a country as large as China, agriculture cannot be without risks, so the ability to respond to risks is most important.
One challenge is finding a good trade balance point. China's agricultural development has entered a new normal, with challenges and opportunities coexisting. Price differences already exist, and the pressure of excessive imports always exists. Businesses engaged in trade will certainly choose high-quality and low-priced products. But as a government, especially the central government, it must take into account the interests involved in trade, the interests of consumers, and the interests of farmers. It must find a balance point among them, although this balance point is not easy to find.
The second challenge is weak growth in agricultural product exports. China's vegetables and fruits once had an export advantage in the world, but in 2015 the fruit trade showed a deficit, and the surplus advantage in vegetable trade is also declining. China appears to have a large population, but the Lewis turning point has now appeared. The Fifth Plenary Session of the 18th CPC Central Committee relaxed family planning; the so-called national policy of family planning has not changed, but the pace and intensity of relaxation have increased somewhat. This is because China faces enormous pressure from significantly rising production costs, especially a sharp rise in labor costs.
Another issue is that the difficulty of China's agricultural production is constantly increasing. When China joined the WTO, the requirements for agriculture were relatively harsh, especially the very high demands placed on us by developed economies such as the European Union and the United States, which have a strong restraining effect on us. Now, even if we had money, we could not adjust, let alone when we do not have money. So the limitations of policy have already become apparent.
New opportunities
Facing many challenges, I still remain optimistic, and China needs to continue advancing opening-up. For a country as large as China, doing agriculture now cannot be like the past, shutting the door and working in isolation; it must pursue cooperative opening with agriculturally developed countries around the world such as the United States, Australia, and Brazil. So opening up is unavoidable. China must also transform its development model and attach importance to the internal driving force for structural adjustment. External pressure for structural adjustment is increasing, and the internal driving force is also increasing; the whole society, from top to bottom, is aware that agriculture must transform its development model. In addition, as environmental pressure becomes increasingly severe, development that pays a high price is unsustainable, and agriculture should rely even more on internal driving forces for development. The Chinese government's execution capacity is still very strong, and I believe that within a few years, the results of transforming agricultural development models and adjusting structures will be fully demonstrated.
At the same time, we hope China will have large domestic seed enterprises. With such a large market, China will surely produce large seed companies that people look forward to.
In addition, China's agricultural going global will accelerate, and whether it is the central government, enterprises, or society, integration with international production capacity will increase. In 2014, China achieved a basic balance between attracting foreign investment and outward investment for the first time. As time goes on, China's capital export and technology export are unavoidable.
In response to the above opportunities and challenges, we must implement the following three measures: first, achieve green development and sustainable development; second, achieve shared development and improve agriculture's competitiveness; third, continue opening up and improve the quality of opening up. China cannot always be a place for processing materials supplied by clients; it must be a research and development center for technology- and capital-intensive products.
In accordance with the requirements of the Fifth Plenary Session of the 18th CPC Central Committee, China must promote innovative development. This is not only technological innovation, but also institutional innovation, market innovation, and business format innovation. “Double Eleven” is a festival created by China; it is not only very popular in China, but this Chinese-style “Singles' Day” is also very popular in Vietnam, Africa, and Latin America. With business format innovation, coordination, sharing, and opening up, the world will become a true global village. By 2050, the additional 2 billion people globally will certainly not mainly come from China, but China has the obligation and responsibility to work with the international community to safeguard food and food security and to safeguard farmers' food security and income growth.