Since joining the World Trade Organization (WTO) in 2001, China’s food imports have increased significantly. Between 2019 and 2021, annual and net food imports will reach $160 billion and $93 billion, respectively.
However, as rural incomes rise and China’s population declines, it is uncertain whether trade can bridge the gap between domestic food production and consumption in the future.
Soybeans for animal protein feed and soybean oil are China’s largest food imports. Imports will exceed 100 million tons in 2020, with an annual average of 95 million tons from 2019 to 2021. Corn will replace cooking oil as his second largest import commodity in China in 2021.
Other major imported foods are meat, dairy products and sugar. China is also the fifth largest food exporter after the United States, the Netherlands, Brazil and Germany, and the largest exporter of vegetables, fruits and fish.
Shortages of arable land and water are driving China’s growing food imports. China’s population (1.4 billion) is her 18% of the world’s population, but China has only her 8% of the world’s arable land.
Per capita water availability is only a quarter of the world average. Technological and institutional innovations, market reforms, and increased inputs and investments in agriculture have led the real value of China’s agricultural production to grow by more than 5% annually over the past 40 years. However, this production growth is still not enough to meet China’s growing food demand.
Rapid income growth and moderate population growth have increased the demand for Chinese food, especially meat. China’s GDP per capita increased from $1,053 in 2001 to $12,741 in 2022. China’s population increased from he 1.28 billion to he 1.41 billion during the same period.
China is the world’s largest food importer, but its average annual per capita net food import value ($64) from 2019 to 2021 was lower than countries with a larger population but less arable land. .
These countries include the UK ($457), Japan ($422), and South Korea ($535) for 2019-2021. The situation means that China is heavily examining its domestic production capacity and may import more food in the future.
International trade helps China balance food supply and demand. China’s accession to her WTO has resulted in full liberalization of soybean trade (with only 3% of her tariff remaining) and reduced tariffs on meat and other foods (about 10-12%). .
Strategic commodities such as rice, wheat and corn are subject to a 65% tariff above the defined import quota. Imported soybeans, corn and cooking oil have mostly met China’s growing demand for animal feed, cooking oil and other foodstuffs since 2001.
In China’s Food Security Law of 2020 (scheduled to be formally issued in 2023) and Food Waste Prevention Law of 2021, China has responded to increasing pressure on food imports by promoting food security. You have set goals and strategies.
The main goals are “to secure food grains (rice and wheat) domestically” and “to be basically self-sufficient in the production of grains (rice, wheat and corn)”. If “essentially self-sufficient” means that around 90% of these grains are produced domestically, there may be room to import more corn.
To achieve these goals, China will strengthen agricultural research and development capabilities and innovation, protect cultivated land and improve soil quality. China has also implemented a new green agriculture development strategy that focuses on promoting ecosystem diversity, resilience and sustainability in agriculture and low-carbon agriculture.
China’s future food imports will depend heavily on China’s efforts to increase domestic food production and the international trade environment, but two other factors are likely to play a role. First, China’s meat demand will continue to grow with income until at least 2035.
Rising incomes, especially in rural areas in less developed regions of western and central China, will further boost demand for livestock products and other high-value foods such as vegetables, fruits and fish.
China has a comparative advantage in the production of vegetables, fruits and fish and can meet the growing domestic demand, but demand for meat and animal protein feed will exceed domestic production.
Trade should bridge the gap between production and consumption. Importing soybeans and corn to increase livestock production (and meet demand for soybean oil) would be preferable to importing meat directly from potentially volatile international markets.
Still, it is likely that the United States, a major soybean exporter to China, will restrict soybean exports to China due to political conflict. China will likely seek to diversify its trading partners, replace soybeans with other protein feeds, and expand domestic production.
Second, food import growth is likely to slow over time. China’s food production strategy will help increase the domestic food supply. China’s population will also peak in 2021 and start declining in 2022.
Trade remains important to China’s food security and agricultural sustainability, helping Chinese consumers secure better and more nutritious diets as their incomes rise. Given China’s large size, its food imports have a significant impact on world trade and food exporters.
Increasing food production in China and improving the governance of the multilateral trading system on which agricultural trade depends (such as banning export restrictions and embargoes) would benefit all food importers and exporters.
Professor of Peking University Advanced Agricultural Sciences, Director of New Rural Development Research Institute, Honorary Director of China Agricultural Policy Center.
This article has been republished with permission and was originally published by the East Asia Forum, based at the Crawford School of Public Policy, College of Asia and the Pacific, Australian National University.