Emerging Markets / February 22, 2017

Agricultural and Economic Development in China

Since 1953, the People’s Republic of China has structured its economy into a consecutive series of five-year plans that are designed and implemented by the central government in Beijing. Currently, China is on the second year of its 13th five-year plan (2016-2020). This article focuses on the most recent proposals of the Chinese government relating to agricultural and economic policy.

Agricultural and Economic Development in China

Some of the key issues and goals outlined as part of China’s 13th five-year plan include the enhancement of government institutions throughout the country as it relates to the judicial system and the rule of law as well as the improvement of government-held service industries, notably electricity, transportation, and telecommunications. Similarly, the most recent five-year plan emphasizes the need to further transition into a cyber-economy that allows for more efficient supply chains as well as the expansion of internet access nationwide. Within the realm of agriculture, the 13th five-year plan proposes the reform of the rural land system in order to facilitate operational rights as well as the further professionalizing of the farming sector. Likewise, the plan promotes a greater formalization of farmland ownership not only in the countryside, but also throughout urban settings.

Furthermore, early in 2017, the Central Committee of the Communist Party of China published its No. 1 Policy Document for the year, which focuses on agricultural and economic goals for the upcoming year. Many of the central features of this document surround the need for national food security and promote the medium-term goal of agricultural self-sufficiency, particularly in relation to commodity crops. Today, China imports a large amount of commodity grains, such as soybeans, from Africa and Latin America. Therefore, it is no surprise that the No. 1 Policy Document for 2017 highlights the need to boost staple grain production, particularly rice and wheat, as well as secure the commodity crop reserves of the national food safety system.

In terms of commodity output, the documents mentioned above name specific crops in which China wishes to achieve self-sufficiency and increase the amount of land harvested, these include wheat, rice, soybeans, natural rubber, sugarcane, cotton, rapeseed, alfalfa, and corn. Similarly, in terms of animal production, China seeks to maximize the size of its grass-fed cattle and sheep herds as well as its swine and fishery operations. The increase in animal farms will also increase the country’s demand for some of the grain commodities mentioned above to be used as animal feed.

All of these policy aims declared by the Chinese government are becoming increasingly important given the fact that throughout the last several years the national population has transitioned from mostly rural to mostly urban. Likewise, the ever-expanding Chinese middle class, which drives domestic consumption, demands larger amounts of higher quality foodstuffs. Therefore, China seeks to maximize its agricultural output through increased technological integration in farm operations, while also increasing product quality. For example, the government currently encourages farmers to plant rice and wheat varieties with different degrees of gluten content in order to cater to the tastes of different clients.

(Read more about the 2016 Asia Pacific Economic Cooperation Summit)

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