Published 10 October 2023
The Hinrich Foundation will launch its Sustainable Trade Index 2023 on October 24. Among the themes that the index explores is the sustainability of global food trade. In the first of a series of articles exploring STI themes, we explore China's approach to safeguarding food security and its impact on global trade. Seared by the experience of famine, Beijing had for decades stressed the importance of self-sufficiency in grain production. After a period of greater openness toward food imports, the government appears to have reversed course.
Amid a historic global food crisis driven by geopolitical tensions, war, and climate shocks, China’s trade policy on agriculture and food has become pivotal to global macroeconomics due to its position as the world’s second-most populous country, second largest economy, biggest food producer, top food importer, and a major food exporter.
Seared by the experience of famine, Beijing had for decades stressed the importance of self-sufficiency in grain production as an overriding goal of its agricultural development and food security policy. As China became more integrated with global markets, it has mixed this policy with greater openness toward international markets for food imports.
But now, the government appears to have reversed course, and is renewing and amplifying its policy emphasis on achieving high degree of grain self-sufficiency. These twists and turns of China's agricultural policy and its approach to safeguarding food security inevitably have major impacts on the global food trade as well as the sustainability of both domestic and international food production systems.
China’s agricultural production and trade policies are among the factors measured by the Hinrich-IMD Sustainable Trade Index. The Index measures the relative capacity of 30 key economies across Asia, Europe, and the Americas to achieve sustainable growth through global trade.
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Among other indicators, the index measures and ranks economies on import and export balance, wastewater treatment, and energy intensity. These indicators are part of the economic and environmental "pillars" that the index use to evaluate how governments manage trade-related externalities.
Given China's outsized role in the global food trade, even a slight change in its import policy has large ripple effects across international markets and the environment. Take China's soybean imports as an example: As China moved to reduce its reliance on the US in recent years, its surging soybean imports from Brazil1 is considered a key contributing factor to deforestation in the Amazon rainforest.
Origins of China's self-sufficiency policy
China's grain self-sufficiency policy is a result of a complex interplay of historical imperatives, cultural beliefs, perceptions of the global food market, and geopolitical considerations.
Grain self-sufficiency has long been a matter of political legitimacy for Chinese leaders. For millennia, Chinese rulers prioritized grain production as a matter of regime security. In Chinese political ideology, the emperor's "Mandate of Heaven" could be revoked if they failed to protect their citizens from famine. This belief has had a lasting impact, as China has a long history of famines that led to political upheaval.
China's strong emphasis on grain self-sufficiency has also been influenced by its skepticism toward the global food trading system. On the one hand, as China was reeling from its 1959-1961 famine, the contemporaneous US trade (including food) embargo against China contributed to a strong sense of distrust in Beijing of international markets. To this day, China remains concerned that food supplies could be weaponized by other nations, affecting its national security. Such skepticism is amplified by the limited capacity of the global market to meet China's massive demand as the world’s biggest food consumer, raising doubt among policy makers about the wisdom of relying on international markets for food.
Therefore, on multiple occasions, Chinese President Xi Jinping has stated, "Historical experience has taught us that money is useless in the event of a famine. To solve the problem of feeding 1.3 billion people, we must rely on domestic food production"2.
China's grain self-sufficiency policy has served to counter a foreign narrative of a 'China threat' to global food supply. In the mid-1990s, the environmental analyst Lester Brown, in his well-known book, Who Will Feed China?: Wake-up Call for a Small Planet, fueled fears that China’s resource scarcity would drive global food shortages3. In response to the international and domestic concerns about China's ability to feed itself after Brown's paper, China in 1996 issued the country's first-ever food security white paper, in which China outlined that the fundamental principle for solving the country's food security was to rely on its domestic resources and achieve self-sufficiency in grain supply. Subsequently, its 95% grain self-sufficiency target became the bottom line of China's food security strategy.
Strategy re-direction in 2013
With 95% self-sufficiency as the overriding objective of its agricultural policy and food security strategy, China devoted enormous resources to boosting its grain production. Nevertheless, while the country was able to achieve tremendous grain production increases over the years, its domestic consumption, led by explosive growth in demand for animal feed, has been growing at a much faster rate. As a result, the demand-and-supply gap for grain kept widening, and the country had to import ever more feed grains – soybean in particular – from international markets. Furthermore, China's self-sufficiency policy meant grain output focused more on quantity rather than quality. However, dietary changes and growing demand for food quality led to the widening structural imbalances between domestic food production and consumer demand.
Intensive farming practices geared toward boosting domestic grain production was also not sustainable. China has been trying to feed a nearly 20% of the world’s population on 9% of the planet’s arable land. With such limited tillage, China's massive grain output has been sustained through heavy reliance on chemical fertilizers and pesticides. China further increased grain production by shifting grain production to less-developed areas within the country, mostly inland and northern regions, which exacerbated the country's water challenges as the country's northern provinces have very limited water resources and rely heavily on groundwater for irrigation.
Furthermore, there have been serious conflicts of interest over grain production in China. Local governments have very little interest in producing grain as grain cultivation offers very little economic returns compared to other crops, not to mention the opportunity cost of not converting land to commercial development. Even in the central government, there was open resistance towards the self-sufficiency policy4. For instance, then-Finance Minister Lou Jiwei once openly questioned the logic of the self-sufficiency policy5.
Against this backdrop, in late 2013 and early 2014, China introduced a new food security strategy, which stated that China's food security would be based on "domestic supply and moderate imports, ensuring production capacity and speeding up the development of agricultural science and technology". There were two major changes:
Firstly, though self-sufficiency would still be at the center of China's food security strategy, the language was deliberately kept vague: "basic self-sufficiency”6 in grain supply and “absolute security” in staples supply. No explicit standard for measuring "basic self-sufficiency and absolute self-sufficiency" was provided. Moreover, since 2014, a large area of marginal land and farmland contaminated by heavy metals across China had been withdrawn from grain production through crop rotation and fallow systems. In 2016, the government announced that China would not seek consecutive annual increases7 in grain output over the next five years. Instead, the country would focus on consolidating and improving grain production capacity.
Secondly, "moderate imports" officially formed part of the national food security strategy, which called for "more active utilization of international food market and agricultural resources to effectively coordinate and supplement domestic grain supply". To be sure, foreign imports had long been considered necessary to supplement domestic production, but such imports were limited to ensuring regular supply only in times of irregular domestic production, balancing regional production, and making up for supply shortages. Under the new strategy, a global agricultural policy sought to actively utilize international food markets and agricultural resources more effectively.8 As part of its Belt and Road Initiative, China aimed to guild a "Food Silk Road"9, through which China has been attempting to reconstruct global food supply chains through overseas agricultural investment, agricultural technology transfer, investment in infrastructure, and accelerated policy coordination (with more than 100 agricultural cooperation agreements with BRI partners).
Return to self-sufficiency
However, China's food security strategy reforms quickly met new challenges. These include the trade war with the US, the COVID-19 pandemic, the worsening geopolitical environment, and the growing possibility of military conflict in the Taiwan Strait and South China Sea.
In President Xi Jinping's speech during the Communist Party Congress last year, he stressed that China will make sure that the country's food supply remains firmly in its own hands. He promised “strict protection of the farmland, strong support in agricultural research and development, particularly seed technology”, in addition to other measures10. In addition, Xi called food security a "guozhi dazhe", meaning a top national priority, and the Chinese government swiftly introduced new policies emphasizing China's need to grow more of its own crops. In February 2023, China unveiled its "No. 1 Central Document" for the year, its annual manifesto on state agricultural policy. For the first time, a grand new goal – striving to become an agricultural power – was set down in the document.
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Chinese officials11 and scholars12 say the core idea of accelerating the building of “agricultural power” is about once again boosting grain self-sufficiency. It was widely reported across the country that, to boost grain production, meant a reversal13 of the "return farmland to forest" policy. Chinese authorities have reclaimed more than 170,000 hectares of land for grain production since 2021, a Financial Times report said14.
Impact on global trade and sustainability
With Russia's withdrawal from the Black Sea Grain Initiative, which sought to ensure safe passage of grain shipments from war-torn Ukraine, and after a recent ban by India on rice exports, the ongoing global food crisis is projected to get worse15. The number of people facing or at risk of acute food insecurity has increased from 135 million in 2019 to 345 million across 79 countries in 2023. As warned by various UN organizations16, if these trends remain as they are, the UN’s Sustainable Development Goal of "end(ing) hunger, achiev(ing) food security and improv(ing) nutrition " by 2030 will not be reached.
Certainly, boosting self-sufficiency does not mean China will stop importing food from international markets. With limited resources and a diversifying diet, China will remain a major food importer. However, as far as the future orientation of its agricultural and food trade policy is concerned, political and strategic concerns will be prioritized over economic considerations. In particular, the bottom-line thinking17 would be to prepare for the worst-case scenario in which China might not be able to buy food from abroad, particularly Western exporters.
This will be the guiding principle for China’s food supply resilience18, rather than buying from the most efficient supplier. What it means is that while China will continue to adopt a pragmatic approach toward food imports from the United States and other Western exporters, it will confer strategic priority on forging closer agricultural ties with its allies, particularly Brazil and the BRI countries.
As China shifts toward more domestic production, the global food supply chain and the sustainability of agricultural production and trade will inevitably be affected. Domestically, fixation on grain production through all means necessary would not only be economically but also environmentally unsustainable.
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[1] Massive soybean expansion in South America since 2000 and implications for conservation, NCBI: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC8350977/
[2] Xin Jinping: Your job must be in your own hands, Xinhuanet: https://www.xinhuanet.com/politics/2015-08/25/c_128164006.htm
[3] How China could starve the world, Washington Post: https://www.washingtonpost.com/archive/opinions/1994/08/28/how-china-could-starve-the-world/555ed096-4247-4ff4-a185-1d7cdd2aa2d9/
[4] Lou Jiwei and He Lifeng debate the price of food protection, Caixin.com: https://topics.caixin.com/2018-03-13/101220924.html
[5] Lou Jiwei talks about agricultural reform: reducing all-round subsidies for grain, CNR: https://news.cnr.cn/dj/20150430/t20150430_518430646.shtml
[6] China scythes grain self-sufficiency policy, Financial Times: https://www.ft.com/content/6025b7c8-92ff-11e3-8ea7-00144feab7de
[7] China’s new five-year plan adjusts food policy: no longer pursues continuous increase in production, http://www.ce.cn/cysc/sp/info/201603/07/t20160307_9337392.shtml
[8] China’s Global Agricultural Strategy: An Open System to Safeguard the Country’s Food Security https://www.rsis.edu.sg/rsis-publication/idss/wp282/
[9] When food meets BRI: China's emerging Food Silk Road, ScienceDirect: https://www.sciencedirect.com/science/article/abs/pii/S2211912421000286
[10] China expands farmland in bid to cut foreign food reliance, Financial Times: https://www.ft.com/content/6702e861-24c1-4383-be1c-bb0ba3b09c8a
[11] People's Political Consultative Conference: http://www.cppcc.gov.cn/zxww/2023/01/06/ARTI1672991032016313.shtml
[12] Firmly grasp the basic direction of building an agricultural power, CRN: http://www.crnews.net/pl/bwtg/953707_20230317065052.html
[13] Han Heyuan: China’s policy of returning forests to farmland should be slowed down, Xaobao: https://www.zaobao.com.sg/forum/views/story20230426-1387377
[14] Ibid.
[15] The world food crisis is about to get worse, Politico: https://www.politico.eu/article/world-food-crisis-ukraine-russia-war-global-warming-united-nations/
[16] 122 million more people pushed into hunger since 2019 due to multiple crises, reveals UN report, WHO: https://www.who.int/news/item/12-07-2023-122-million-more-people-pushed-into-hunger-since-2019-due-to-multiple-crises--reveals-un-report
[17] Deeply study and implement the spirit of General Secretary Xi Jinping’s important expositions on national food security, NDRC: https://www.ndrc.gov.cn/xwdt/ztzl/srxxgcxjpjjsx/xjpjjsxjyqk/202308/t20230804_1359201.html
[18] Strengthen the foundation of food security in an all-round way (Economic Daily, August 29, 10th edition), http://www.moa.gov.cn/ztzl/ymksn/jjrbbd/202308/t20230829_6435335.htm
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Author
Hongzhou Zhang
Dr. Zhang Hongzhou is a Research Fellow with the China Programme at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University, Singapore. He received his Ph.D. in Public Policy from the Lee Kuan Yew School of Public Policy, National University of Singapore.
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