• Geoff Donald

The importance of agriculture to China


For all countries, the issue of food and agriculture is an important one. When looking at the global agriculture sector today, the impact of China as either consumers of food or agriculture producers cannot be ignored nor can the domestic importance of agriculture to China be overstated. With a population of 1.41 billion people, China accounts for more than one sixth of the world's population and all these people need to be fed. And that takes a lot of food.


First the good news, over the past 35 years, due to massive economic transformation, millions of Chinese have been lifted out of hunger with the number of hungry people in China being cut in half. Rising incomes and living standards along with increased urbanization have led to changes in diet and an increase in demand for the amount and varieties of food by Chinese consumers. Since 2001, the average Chinese diet changed to include more meat, dairy, and processed foods while grain consumption has declined. To use meat as an example, since 1978 the amount of meat that the average Chinese person eats rose by a factor of six. As a result, China is now the largest consumer of meat in the world.


Economically, according to the National Bureau of Statistics of China, the value of agriculture and related industries in China was over ¥16.6 billion yuan and accounted for 16.47% of China’s total gross domestic product in 2020. Agriculture plays in an important employment role with China as well. According to the latest statistics published by the World Bank, the agricultural industry employs 24.73% of the workforce or a total of 185 million people.


From a production side, according to the Food and Agriculture Organization (FAO), China is the world's leading agricultural producer. Statistics show that as a country, China leads the globe in production of cereals, cotton, fruit, vegetables, meat, poultry, eggs, and fishery products, and produces 25% of the world’s grain output. This most produced crop in China in 2020 was rice at 353.1 million tons.

Now the challenging news for China. Despite having almost one sixth of the world’s population, China only has 10% of the world's arable land. This means that China must continue increase its agricultural efficiency to feed its own people. At that is a major challenge because both the amount of arable land available is shrinking due to increased urbanization and the quality of the arable land is decreasing due to a variety of issues such as climate change, use of herbicides and pesticides, and pollution.


The second challenge that China’s agriculture industry is going to face is a declining labour pool in the medium and long term. How is this an issue you ask? Because China population is about shrink. The timing and severity of a declining Chinese population is being debated by demographers with some arguing that it has already begun while others suggest it will start in another couple of years. Nevertheless, there is general agreement that China’s population will be smaller in the future. In fact, from a labour point of view, China’s working-age population peaked in 2014 and is projected by demographers to shrink to less than one third of that peak by 2100. A shrinking workforce means less available labor to work on farms. The agriculture labour issue is further exasperated by the continued flow of migrants from rural areas to larger cities as they look for higher wages and a better standard of living.

Finally, as noted above China has been extremely successful at lowering the number of people in the country who are hungry but large pockets of poverty still exist – especially in remote and rural areas. According to the UN’s World Food Programme, in 2020 almost 150.8 million people China are considered as malnourished. This vast number of malnourished citizens is an ongoing public policy challenge for China’s leaders.


China’s primary solution to solving the difference in the food demand of its citizens with its lack of supply has been to import food and agricultural products. In 2019, China became the world's leading importer of agricultural products surpassing both the United States and the European Union. The United States Department of Agriculture states in a 2020 report that “Imports growth has been driven by land-intensive crops like soybeans, sorghum, and cotton, as well as meat, dairy, fruit, and vegetables as a result of rising consumer demand.”

Yet this increased reliance on imports means that China is both competing with other countries for food imports thereby increasing foods costs for its own people (and others around the world) while at the same time it is becoming more dependent on other countries. Recent events such as the Russia - Ukraine war has seen energy and agriculture products weaponized. With the growing importance of food imports to China, the threat of food weaponization by other countries weighs heavily on the minds of Chinese leaders which has long been concerned about food security.


The importance of agriculture to China and China to agriculture is massive. Whether it is employing hundreds of million of people in the sector, or being the largest food and agriculture imported in the world, what China eats and how it gets that food impacts the rest of the world.


FUTURE POSTS

Over the upcoming few months, we are going to examine China’s agricultural industry from issues such as climate change, labour, use of fertilizers, key players in the agricultural industry, government policy relating to agriculture the role of agriculture in China’s history and development and many more issues.


The first issue we will look at is food security in China, how China defines this issue, and what steps in China taking to improve its food security position and what this all means for other countries. Stay tuned and check back soon.

2 views0 comments

Recent Posts

See All