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Lumpkin, T.A. 1996. Agricultural opportunities and challenges in China. p. 52-59. In: J. Janick (ed.), Progress in new crops. ASHS Press, Alexandria, VA.

Agricultural Opportunities and Challenges in China

Thomas A. Lumpkin*

  1. CONSUMPTION TRENDS
  2. FOOD PRODUCTION
  3. TRADE
  4. SUMMARY
  5. REFERENCES
  6. Table 1
  7. Table 2
  8. Table 3
  9. Table 4
  10. Fig. 1
  11. Fig. 2
  12. Fig. 3
  13. Fig. 4
  14. Fig. 5
  15. Fig. 6
  16. Fig. 7
  17. Fig. 8
  18. Fig. 9
China has only 7% of the world's cultivated land to feed 22% of the world's population. During the 45 years since the foundation of modern China, its population has more than doubled to 1.2 billion. While China has the world's third largest and most rapidly growing economy, per capita income is low; various estimates range between $1000 and $2600 for 1990. Food is thought to consume 50% of urban wages. This rate is high, not only because of low income but also because of China's food-centered culture, which places a high value on diversity and balance in eating. Thus, increasing affluence and the cultural importance of food in China are raising enormous opportunities and challenges for global production.

CONSUMPTION TRENDS

As a result of economic reforms starting in 1978 (Anon. 1989, 1994), agricultural production and consumption have changed considerably (Coyle 1995). Average daily food consumption has increased over 1000 calories since the famine years of 1961-62 (Fig. 1). Rising affluence has pushed the use of grain as feed for animals from only 8% in 1978 to 20% in 1990. The demand for feed grains is increasing at twice the rate of population growth. This trend will probably continue, using an increasing share of China's grains. Meat consumption, primarily pork, averages over 35 kg (Fig. 2, Table 1) and is increasing by about 15% per year, about 40% of Taiwanese consumption. Consumption in Taiwan and Hong Kong, is now 60 and 90 kg of meat per capita per year, respectively. China has closer culinary affinity to Taiwan and Hong Kong than Korea or Japan. Similarly, edible oil consumption is about 6 kg per capita, only 22% of Taiwanese consumption (Fig. 3), and is expected to continue increasing rapidly, partially through imports (Fig. 4). Milk consumption is low at about 4 kg per capita, but will never approach the 271 kg consumed per capita in the U.S.

FOOD PRODUCTION

China will follow, but to a lesser degree, the agricultural trends of Japan, Korea, Taiwan, and other more developed East Asian neighbors. The most notable of these trends is reduced self-sufficiency in food production. For example, according to the Food Balance Sheet released by the Ministry of Agriculture, Forestry, and Fisheries, Japan's self-sufficiency rate for food on a caloric basis was 46% in 1992 vs. 79% in 1960. This rate compares to 251% in Australia, 113% in the U.S., and 65% in Switzerland. More worrisome in regard to the future is the possibility of China following the trend of Japan's, S. Korea's, and Taiwan's low self-sufficiency in the production of grains; these countries are only 28%, 34% and 24% self-sufficient, respectively. Changing tastes for imported food forced reductions in rice production since consumption dropped from 118 kg per capita in 1962 to 69 kg in 1993 (Matsuoka 1995). If China follows a similar East Asian development path, including a westernization of its tastes, it will become a major importer of food on a scale that will dramatically affect world food trade patterns. The size of China's expected needs could push food prices back toward the record prices of 1973-74 (Fig. 5) and have devastating effects of the world's poor.

Japan's 1992 self-sufficiency rate for fruit was 59% and 90% for vegetables. Increased production of these high value crops is beginning to occur in China, where the area devoted to vegetable production increased from 2.7 million ha in 1970 to 8.7 million by 1994. China has the world's largest production of vegetables and is emerging as a major vegetable exporter. For example in 1991, China was the fifth largest vegetable exporting country ($1.9 billion), after the U.S. ($5.2), Spain ($4.8), Italy ($4.3), and France ($1.9).

China produces and consumes a different mix of the world's major food grains than western nations such as the U.S., the countries of the Former Soviet Union (Fig. 6), and developed Far Eastern nations such as Japan and Korea (Table 1). If the countries of the Former Soviet Union can successfully reconfigure their inefficient agriculture, they may be able to meet a large portion of China's expanding need for wheat, barley, and feed grains.

Lester Brown's 1995 book, Who Will Feed China, has raised considerable controversy in China among the highest levels of government officials and agricultural scientists. According to Brown, China will have a population of 1.6 billion by 2030 and will probably need to import 200 to 365 million t of grain. Most estimates for 2030 are higher than the total current world trade in grains at about 225 million t. Chinese scientists debated with Lester Brown about this issue while he was a guest of the World Development Institute of China's State Council's Development and Research Centre (Gao 1995). China already imports more than 20 million t of grain (Fig. 4) and will likely be importing 40 million t by the year 2000 (S. Rozelle unpubl.). The government of China has failed to keep investments in agriculture in line with increasing demand. As a result, grain production has plateaued in recent years (Fig. 7), while cultivated area per capita continues to fall alarmingly (Fig. 8).

However there are opportunities for increasing production. For example, Mei Fangquan, Chinese Academy of Agricultural Sciences, found from a satellite survey that China actually has 132 million ha of cropland not the 95.3 million ha officially reported. Thus China has an extra 36.7 million ha in production therefore the reported average yields of 4125 kg/ha is actually about 3000. Politics created an artificial situation where cultivated area was under-reported. This situation continued with central government demands that yields be increased. Production increases were easier to attain across more cultivated land than was actually reported.

In a 3-year analysis of world fertilizer consumption, average fertilizer use was thought to be at about 100% in China and 120%-150% in Japan, Korea, and Taiwan (Saleen Ahmed of the East West Center). However this discrepancy in reporting land leaves room for increased profitable application of fertilizer.

TRADE

The U.S. absorbs about 18.5% of China's exports and supplies about 10% of its imports. The U.S. currently runs a trade deficit of over $30 billion with China, second only to Japan, and the deficit is increasing at about 25% annually (Fig. 9). China exports to the world about twice the value of agricultural products ($15.9 billion, 1993) as it imports ($7.7 billion) and even has an agricultural trade surplus with the U.S. (Tuan 1994). Thus China can expect considerable political pressure from the U.S. to open agricultural markets and to purchase U.S. farm products in order to improve the trade imbalance.

China's leading agricultural exports to the world, in declining value are corn, sugar, pork, cotton yarn, tea, and silk. China exported $451 million worth of agricultural products to the U.S. in 1993 and imported about $376 million. Leading Chinese agricultural exports to the U.S., in declining value, are vegetables (Table 2), feathers and down, cocoa products, tea, and sugar products.

In 1993, China exported about $103 million in vegetables to the U.S. (Table 3) while importing only about $1.5 million worth (Table 4), though U.S. export of high value vegetable products to China is increasing rapidly (Crook 1994). China will be a major competitor with the U.S. for foreign vegetable markets in the coming years. Increased food exports from China to other countries have often come at the expense of U.S. market share--especially in Japan (Matsuoka 1995). About 65% of China's vegetable exports go to developed Asian countries. In 1992, $500 million worth of vegetable products were sold to Japan, $163 million to Hong Kong, $40 million to Singapore, and $26 million to Korea. Among the exported products were mushrooms, bean products, canned bamboo shoots, ferns, fungi, and asparagus.

U.S. garlic producers have taken a beating from China, even domestically. Garlic exports to the U.S. from China increased from 3273 tons in 1992 to 24,461 tons in 1993. The largest U.S. vegetable export item to China is frozen potatoes; 343,000 t in 1993 (Crook 1994).

SUMMARY

China is developing a taste for western-style foods, especially those associated with the fast-food industry, e.g. potatoes, beef, chicken, wheat products, fruit juices, dairy products. As supermarkets develop and spread, China will also become a larger market for high value exotic foods and for high quality traditional Chinese foods. China may export lower quality types of foods while importing higher quality versions of the same foods. China will also expand production and consumption of medicinal plants, especially those enhancing vigor or stamina (chi).

In the short run major agricultural opportunities in China will develop as expressed by members of the Illinois Farm Bureau who made an autumn 1994 visit to China. They concluded that China will be a strong market for U.S. corn, soybeans, wheat, and meat. On the other hand, the U.S. will continue to develop as a major market for the export of Chinese vegetable and fruit products as health issues and the impact of China's growing economy and cultural influence affect American tastes. The developing U.S. market for Chinese foods will offer opportunities for U.S. farmers who understand how to produce Chinese crops (Larkcom 1991; Lumpkin et al. 1993a, b; Konovsky et al. 1994; Lumpkin and McClary 1994).

REFERENCES

*Research supported by WSU IMPACT Program.
Table 1. Per capita food consumption from various sources in four countries.

Quantity (kg/person)
Nations Cereals Soybean Beef Pork Poultry Milk Eggs Vegetables Fruit
U.S. 1375 267.8 43.1 30.9 51.4 268 16.8 140 111
China 328 13.5 1.9 30.0 5.4 5 8.3 106 31
Japan 126 0.8 4.8 11.2 5.0 32 9.9 111 37
S. Korea 168 3.5 4.5 18.9 8.4 44 10.2 233 45

Table 2. China's major vegetable exports in 1992 (Crook 1994).

Item Quantity (t) Value (million $)
Asparagus, canned 39,938 60.4
Adzuki beans 51,919 26.2
Bamboo shoots, canned 65,336 68.2
Bamboo shoots, preserved in salt water 23,166 26.9
Beans, frozen 21,978 19.7
Broad beans 367,594 74.2
Cassava, dried 316,425 40.4
Ferns, dried 4,290 15.0
Gan bian beans 46,033 13.2
Garlic 128,200 67.6
Ketchup, canned 37,433 21.7
Kidney beans 335,262 118.4
Lichens, dried 2,842 23.1
Mung beans 53,432 30.6
Mushrooms 9,168 30.8
Mushrooms, canned 120,092 147.9
Mushrooms, hei mu er (black wood ear) 2,538 13.8
Mushrooms, other dried 10,320 45.9
Mushrooms, preserved in salt water 54,194 61.7
Peas, dried 64,295 11.2
Roots, other starch 30,147 21.3
Sweet potatoz, dried 546,929 72.8
Vegetables, other dried 35,775 59.4
Vegetables, other fresh and chilled 178,576 49.7
Vegetables, other preserved 93,034 48.8
Vegetables, other frozen 37,752 35.9
Vegetables, other simply preserved 67,134 46.2
Water chestnuts, canned fresh 33,838 17.2
Weicai gan 3,069 21.3
zDried sweet potatoes and cassava used as animal feed.

Table 3. U.S. vegetable exports to China, 1992-93 (Crook 1994).

Quantity (t) Value (U.S.$000)
Item 1992 1993 1992 1993
Cabbage, fresh 134 0 32 0
Hops 22 11 139 73
Peppers, fresh 18 0 20 0
Potatoes, frozen 242 343 167 246
Sweet corn, frozen 35 0 32 0
Vegetables, other frozen 18 0 32 0
Vegetables, other prepared and preserved -- -- 1,193 1,104
Total -- -- 1,616 1,514

Table 4. U.S. vegetable imports from China, 1992-93 (Crook 1994).

Quantity (t) Value ($1,000)
Item 1992 1993 1992 1993
Asparagus, prepared 290 818 492 1,489
Bamboo shoots, preserved 2,395 2,429 2,513 2,513
Beans, fresh/frozen 36 232 54 307
Bean cake, miso 351 970 670 1,371
Beans and peas, dried 1,821 1,999 1,205 1,708
Cucumbers, preserved 2 12 2 10
Garlic 3,273 24,461 2,148 11,886
Garlic, dried 2,644 4,478 2,772 4,209
Hops 1,412 0 2,428 0
Mushrooms, canned 11,716 11,944 21,130 20,734
Mushrooms, dried 275 715 3,271 7,146
Mustard 12 6 26 7
Olives, prepared or preserved 8 13 25 46
Onions 37 25 36 15
Onions, preserved 33 620 84 880
Peas, including chick peas 3,724 5,169 5,871 7,434
Peppers 12 0 28 0
Peppers and pimentos, prepared 12 7 15 9
Potatoes, fresh or frozen 18 0 10 0
Water chestnuts 24,152 27,129 15,799 17,949
Total -- -- 78,592 102,726

Fig. 1. Average total intake of food calories from animal and vegetable sources in China.

Fig. 2. Chinese consumption of meat from various sources, in kilograms.

Fig. 3. Change in per capita Chinese consumption of edible vegetable oil.

Fig. 4. Chinese imports of agricultural commodities, in millions of tons. Statistical Yearbook of China, 1995; Press release of State Statistical Bureau, February 1996.

Fig. 5. Changes in the world price of a tonne of rice or wheat, in U.S. dollars.

Fig. 6. Production of the three major cereals in China, the U.S., countries of the Former Soviet Union, and Japan, in million of tonnes.

Fig. 7. Chinese production of major cereals and soybeans, in millions of tonnes (Anon. 1987 and FAO yearbooks).

Fig. 8. Hectares per person of cultivated land in China.

Fig. 9. China's trade surplus with the United States, in billions of dollars.

Last update August 15, 1997 aw