| Submit your comments on this article |
| East Asia |
| China Facing Food Shortage, Price Hikes |
| 2003-11-21 |
| For the first time in six years, Chinese grain harvests are falling short of demand and reviving the question: Will China be forced to rely on imports to feed itself? Since late summer, wheat prices in the northeast have shot up by 32 percent; corn prices have doubled and rice prices are up by as much as 13 percent, according to official reports. Prices of edible oil, vegetables, meat and other food products have also jumped. Grain harvests this year are estimated to have fallen for the fifth year in a row — hit by a double whammy of bad weather and cutbacks in acreage. Too many toy factories and not enough wheat fields. "They’ve got a problem with their stocks and the crunch is hitting now, partly because of the weather," says Rich Herzfelder, executive vice president of the China Food and Agricultural Services, a Shanghai-based consultancy. Beijing was poised to sign agreements on importing American grain during Premier Wen Jiabao’s visit to Washington next month — part of a buying spree to ease trade friction that has also included luxury cars and Boeing aircraft. But a U.S. decision to limit Chinese textile exports is rankling trade relations, and China aborted a buying mission to the United States that was to seal deals on a range of U.S. farm products, including soybeans and cotton. We can store the grain. How long you fellas want to wait to eat? Given its history of famine, China has made self-sufficiency in grain a strategic priority, viewing a stable food supply as key to national security and stability. But because of rising demand, environmental limits and the opening up of markets, China may now be forced to loosen its policy of virtual self-reliance. In the early 1990s, Beijing boosted imports to alleviate potentially destabilizing inflationary pressures. Grain output peaked at 392 million tons in 1998 and has fallen ever since. With this year’s harvest just in, there are no signs of shortages yet. But China already has stopped signing contracts for future corn exports. Soy imports are forecast to hit a record 25 million tons this year, up from 21 million tons last year. China’s state-run media, seeking to calm worries over inflation and fears of shortages, insist there is ample grain. Older Chinese remember all too well the desperate years of famine during the early 1960s, when tens of millions starved to death due to ill-advised economic policies. Yeah, Great Leap ... ah, something, right? Rising prices tend to fan public resentment, particularly among consumers who spend about a third of their incomes on food and for most of the past decade have counted on paying a nearly steady price for their daily helpings of rice and steamed buns. "If the leaders can’t keep prices steady, then they’re doing a lousy job," said one irate shopper, who gave only his surname, Wang. Some economists argue China should stop trying to supply its own grain, given its huge population and relative lack of arable land. With $400 billion in foreign reserves, it can afford to import. More butter, fewer guns! |
| Posted by:Steve White |
| #13 dont forget that after every collapse China ALWAYS reunites But every single time, it's been different. The Chinese empire has both expanded AND shrunk during its long history. (During the Sung dynasty, the Chinese empire was at best a quarter of its present size). The inhabitants of Inner Mongolia, Manchuria, Tibet and East Turkistan (50% of China's territory) are not necessarily happy to be part of China, and were not part of historical China. Nationalism has not been part of the Chinese experience, but once Taiwan declares independence, people are going to start asking themselves why they have to be under Beijing's yoke. If the locals had their druthers, they'd prefer to be learning their own languages in the schools rather than Mandarin. Despite their diversity, they are much more of a genuine nation than former SU or Yugo. The minorities in the Soviet Union were pretty Russified, until they decided they wanted no part of the Soviet Union. Serbs, Bosnians and Croatians speak the same language and would have held together, if not for Milosevic's fascist gestures, and unfortunate American intervention. China is divided by language, customs and its vast geography. There's not a lot of national (i.e. ethnic) consciousness at this point, but that can certainly change in a heartbeat, just as, at the beginning of the 20th century, Arabs of the Ottoman caliphate decided they wanted no part of the Ottoman empire, and the Slavs in the Austro-Hungarian empire decided to opt out of an empire dominated by ethnic Germans and Magyars. |
| Posted by: Zhang Fei 2003-11-21 4:28:00 PM |
| #12 i didnt mean to say Taiwan didnt have efficient agriculture - im sure they do (and IIRC they had a very successful land reform program as well:) ) Just to point out that the 24% figure didnt necessarily match up with the land data. Re: china collapsing - yeah thats always possible, but dont forget that after every collapse China ALWAYS reunites. Despite their diversity, they are much more of a genuine nation than former SU or Yugo. |
| Posted by: liberalhawk 2003-11-21 4:02:49 PM |
| #11 The diversity of the United States only works because we are not a union of diverse regions, YET. Thet multiculturalists are no doubt hard at work on this "problem". |
| Posted by: Bomb-a-rama 2003-11-21 3:02:07 PM |
| #10 And, the Tom Clancy psychic vision is coming in to play here. In one of his novels he suggests that the huge cash reserves generated by the imbalance of trade with the United States are committed to military purchases (and I would suggest infrastructure, as well). Do they have the cash to buy food and oil if they need to? That is the key issue. As Old Patriot points out, China is a country in name only. The vast differences in economic situation, language, culture, etc. amount to the Central Governement juggling balls in the air. Whenever the Central Government has dropped a ball in Chinese history, it has meant chaos, warlords, civil war, and the breakup into smaller, regional states. Every nation in modern times that was a forced union of diverse people has broken apart. Soviet Union and Yugoslavia as examples. The diversity of the United States only works because we are not a union of diverse regions, YET. One could argue that China has collapsed. The technocrats of the southeast owe little but nominal allegiance to Peking, and the nature of the PLA being the largest industrial organization in China adds to the strength of that theory. Army units run regions, warlord-like, not the civil (and supposed legal) government. |
| Posted by: Chuck 2003-11-21 2:46:17 PM |
| #9 Sorry, LH, but you need to do a bit more research. Taiwan is virtually food-independent. Yes, agriculture, including forestry and fishing, "only" account for about 12% of their GDP, but they are a net food EXPORTER - quite a similar situation that the United States enjoys at present (agriculture a small portion of GDP, but most internal needs met by internal production, and food exports far exceed food imports). Percentage of GDP is unimportant, as long as you can still satisfy the needs of your population. Famines occur when you can't, and China has repeatedly suffered from famines. Quite a few of them have resulted in changes of governments. |
| Posted by: Old Patriot 2003-11-21 2:00:43 PM |
| #8 but thats mainly industrial productivity, not agriculture. |
| Posted by: liberalhawk 2003-11-21 12:51:50 PM |
| #7 The fact that Taiwan, ten percent China's size, with even LESS arable land, is almost China's equal in terms of economic productivity is especially galling to the mainlaid Taiwan - Population (22,603,001), Land Area (32,260 sq km), 2001 Nominal GDP ($0.282T) China - Population (1,286,975,468) Land Area (9,326,410 sq km), 2001 Nominal GDP ($1.159T) Taiwan has 1.8% of China's population, 0.34% of its land area, but 24% of China's GDP. Now that's galling. |
| Posted by: Zhang Fei 2003-11-21 12:28:08 PM |
| #6 China is strung about as tight as a nation can get without coming apart. I commented on China's economic problems yesterday - the food situation is only part of it. The recent industrialization is placed a huge strain on the infrastructure, especially the transportation and power grid. China has always been a marginal food producer, which is one reasons Chinese emperors have always wanted states such as those in Southeast Asia and the Pacific as suzeranities, paying tribute in food. The fact that Taiwan, ten percent China's size, with even LESS arable land, is almost China's equal in terms of economic productivity is especially galling to the mainlaid - but Taiwan, because of the threat from the mainland, did what was necessary to be as self-sufficient as possible. China is a huge country whose population is extremely diverse, both in education, ethnicity, and economic development. There are pockets that live in every century, developmentally, from the tenth to the 21st. The authoritarian, top-down management style that collapsed in the old Soviet Union is not being significantly more successful in China, where the problems are different, but no less demanding. |
| Posted by: Old Patriot 2003-11-21 12:08:09 PM |
| #5 liberalhawk - Good point. If things start to go downhill (I'm talking before famine type levels here) then families who once were able to afford better food and meat will see these things go up out of their price range. Since the government takes credit for everything, it seems to reason that it would also get the blame. They could get some level of unrest before things go out of hand. |
| Posted by: Laurence of the Rats 2003-11-21 9:09:22 AM |
| #4 IIUC this i parly a result of prosperity. As chinese incomes rise, people eat more meat - since animals are less than perfect converters of plant protein to animal protein, this increases demand for grain. |
| Posted by: liberalhawk 2003-11-21 8:28:52 AM |
| #3 How much of the Chineese governments legitamacy still rests on the Iron Ricebowl? Are they still subsidizing staples? |
| Posted by: Shipman 2003-11-21 7:45:28 AM |
| #2 Anyone want to start taking bets on whether we're seeing the beginnings of economic warfare between China and the US? I remember reading somewhere else that a lot of US companies and those in Japan and South Korea have just recently consolidated their arguments regarding patent violations in china, or in other words intellectual property rights violations. Apparently they're planning stick chinese companies with something around $21 billion worth of fines. |
| Posted by: Val 2003-11-21 5:34:09 AM |
| #1 One of these years we will see a climate event like the 'year without a summer' that occured around 1870. There were multi-year crop failures in temperate regions. I recall reading about mass starvation in Finland. It will be huge destablizing event and when it does it will pay to be in country like the USA or Australia that will be able to feed itself. |
| Posted by: Phil_B 2003-11-21 4:53:27 AM |