7 Reasons Why Chinese Agricultural Exports Are Booming
China is one of the world’s largest exporters of agricultural products, with a total value of $77.4 billion in 2020. But what are the factors behind this impressive performance? Here are seven reasons why Chinese agricultural exports are booming.
1. Diversified products and markets
China exports a wide range of agricultural products, from cereals and oilseeds to fruits and vegetables, from meat and dairy to seafood and honey. China also has a diversified market portfolio, with more than 200 countries and regions as its destinations. This reduces the risk of overdependence on a single product or market.
2. Improved quality and standards
China has invested heavily in improving the quality and safety of its agricultural products, by implementing stricter regulations, enhancing supervision, upgrading infrastructure, and promoting traceability systems. China has also aligned its standards with international norms, and obtained recognition and certification from many countries and organizations.
3. Increased innovation and competitiveness
China has fostered innovation and competitiveness in its agricultural sector, by supporting research and development, encouraging technological adoption, enhancing branding and marketing, and fostering e-commerce and cross-border trade platforms. China has also leveraged its advantages in digitalization, artificial intelligence, and big data to create new opportunities and value chains.
4. Strong domestic demand and consumption
China has a huge domestic market for agricultural products, with a population of 1.4 billion and a growing middle class. The domestic demand and consumption of agricultural products have increased steadily, driven by income growth, urbanization, dietary diversification, and health awareness. This creates a solid foundation and a driving force for China’s agricultural exports.
5. Favorable trade policies and agreements
China has pursued an open and win-win trade policy for its agricultural sector, by reducing tariffs, eliminating barriers, expanding access, and enhancing cooperation. China has also signed free trade agreements (FTAs) with 26 countries and regions, covering more than 40% of its agricultural exports. These FTAs have created preferential conditions and mutual benefits for China and its trading partners.
6. Active participation in global governance
China has actively participated in global governance and multilateral cooperation for its agricultural sector, by supporting the rules-based multilateral trading system, upholding the principles of fairness and justice, promoting the reform of the World Trade Organization (WTO), and contributing to the achievement of the Sustainable Development Goals (SDGs). China has also played a constructive role in addressing global challenges such as food security, climate change, and pandemic prevention.
7. Long-term vision and strategy
China has a long-term vision and strategy for its agricultural sector, by adhering to the concept of green development, pursuing high-quality growth, building a modern agricultural system, and advancing rural revitalization. China has also formulated the 14th Five-Year Plan (2021-2025) and the Long-Range Objectives Through the Year 2035 for its agricultural sector, which outline the goals, priorities, and measures for its future development.
Chinese Agricultural Exports: Trends and Prospects
China is one of the largest exporters of agricultural products in the world, with a total export value of 64.83 billion U.S. dollars in 2019 . China’s share of global agricultural exports has increased from 2.19% in 2001 to 4.33% in 2019 , reflecting its growing competitiveness and integration in the world market. In this blog post, we will examine the main trends and drivers of China’s agricultural exports, as well as the challenges and opportunities for the future.
Major Export Products and Destinations
China exports a wide range of agricultural products, including crops, livestock, aquatic products, processed foods, and beverages. According to the statistics from Statista , the top five export categories in 2019 were:
- Fruits and nuts: 16.8 billion U.S. dollars
- Fish and crustaceans: 13.5 billion U.S. dollars
- Beverages: 7.8 billion U.S. dollars
- Vegetables: 6.6 billion U.S. dollars
- Cereals: 4.7 billion U.S. dollars
These five categories accounted for about 75% of China’s total agricultural export value in 2019. Among them, fruits and nuts showed the highest growth rate, increasing by 17% from 2018 to 2019.
China’s main export destinations for agricultural products are Asia, Europe, and North America. According to Statista , the top five export markets in 2019 were:
- Japan: 10.4 billion U.S. dollars
- United States: 9.2 billion U.S. dollars
- Hong Kong: 8.7 billion U.S. dollars
- Vietnam: 6 billion U.S. dollars
- South Korea: 4.6 billion U.S. dollars
These five markets accounted for about 60% of China’s total agricultural export value in 2019. Among them, Vietnam showed the highest growth rate, increasing by 25% from 2018 to 2019.
Factors Affecting China’s Agricultural Exports
China’s agricultural exports are influenced by various factors, both domestic and international. Some of the key factors are:
Supply capacity
China has a large and diverse agricultural sector, with abundant natural resources, labor force, and technological innovation. China has improved its agricultural productivity and quality through investments in infrastructure, research and development, mechanization, and modernization . China has also expanded its irrigated area, organic farming area, and greenhouse cultivation area to increase its supply capacity .
Demand conditions
China’s agricultural exports are driven by the growing demand from both developed and developing countries, especially in Asia. China’s exports benefit from its geographical proximity, cultural affinity, and trade agreements with its neighboring countries . China’s exports also cater to the changing consumption patterns of consumers worldwide, who demand more diverse, nutritious, safe, and convenient food products .
Trade policies
China’s agricultural exports are affected by the trade policies of both China and its trading partners. China has liberalized its trade regime since joining the World Trade Organization (WTO) in 2001, reducing its tariffs and non-tariff barriers on agricultural products . China has also signed free trade agreements (FTAs) with several countries and regions, such as ASEAN, Australia, New Zealand, Chile, Peru, Switzerland, and Pakistan . However, China’s exports also face trade barriers from some of its major markets, such as the United States, European Union, Japan, and South Korea, who impose sanitary and phytosanitary (SPS) measures, anti-dumping duties, countervailing duties, and safeguard measures on some of China’s products .
Exchange rate
China’s agricultural exports are influenced by the exchange rate of the Chinese yuan (CNY) against other currencies, especially the U.S. dollar (USD). A depreciation of the CNY makes China’s exports cheaper and more competitive in foreign markets, while an appreciation of the CNY makes China’s exports more expensive and less competitive . The CNY has fluctuated against the USD over the years, depending on China’s macroeconomic conditions and monetary policies.
Challenges and Opportunities for China’s Agricultural Exports
China’s agricultural exports face several challenges in the current and future context, such as:
Environmental constraints
China’s agricultural sector faces serious environmental problems, such as land degradation, water scarcity, soil pollution, biodiversity loss, and climate change . These problems threaten China’s agricultural production capacity and quality, as well as its ecological security and public health. China needs to adopt more sustainable and resilient agricultural practices, such as improving water use efficiency, reducing chemical inputs, enhancing soil fertility, and promoting low-carbon development .
Food safety issues
China’s agricultural sector suffers from frequent food safety incidents, such as pesticide residues, heavy metals, veterinary drug residues, food additives, and food fraud . These incidents damage China’s reputation and consumer confidence, as well as its export competitiveness and market access. China needs to strengthen its food safety regulation and supervision, such as improving food standards, testing, certification, traceability, and recall systems .
Trade disputes
China’s agricultural sector faces increasing trade disputes with some of its trading partners, especially the United States, who accuse China of unfair trade practices, such as subsidies, dumping, market access restrictions, intellectual property rights violations, and currency manipulation . These disputes result in trade tensions and conflicts, such as tariffs, quotas, sanctions, and retaliations, which disrupt China’s trade flows and relations. China needs to resolve its trade disputes through dialogue and negotiation, based on the rules and principles of the WTO .
China’s agricultural exports also have several opportunities in the current and future context, such as:
New markets
China’s agricultural sector has the potential to explore new markets for its products, especially in emerging economies, such as Africa, Latin America, Middle East, and Central Asia . These markets have large populations, growing incomes, and rising food demand. China can leverage its comparative advantages, such as low costs, high quality, and product diversity, to increase its market share and penetration in these regions .
New products
China’s agricultural sector has the opportunity to develop new products for its exports, especially in high-value segments, such as organic products, functional foods, health foods, ethnic foods, and specialty foods . These products have higher profit margins and growth potential than traditional products. China can capitalize on its rich biodiversity, cultural heritage, and technological innovation to create unique and differentiated products that meet the needs and preferences of consumers worldwide .
New modes
China’s agricultural sector has the possibility to adopt new modes for its exports, especially in digital platforms, such as e-commerce, online platforms, social media, and mobile applications . These platforms offer more convenience, efficiency, transparency, and interaction for both exporters and importers. China can utilize its advanced information and communication technology (ICT) infrastructure and large internet user base to expand its online presence and influence in the global market .
China is a major player in the global agricultural trade. Its exports have grown significantly over the years due to various factors. However, its exports also face many challenges that need to be addressed. At the same time,
its exports also have many opportunities that can be exploited. China needs to adopt a balanced and proactive strategy to enhance its agricultural export performance and competitiveness in the future.
References:
http://www.thehandthatfeedsus.org/handbook/CHINA.pdf
https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0274187
https://www.statista.com/topics/9277/agricultural-trade-in-china/
https://www.statista.com/topics/7439/agriculture-in-china/
http://www.fao.org/3/i8429en/i8429en.pdf
https://www.wto.org/english/tratop_e/tpr_e/s403_e.pdf
https://www.xe.com/currency/cny-chinese-yuan-renminbi
http://documents1.worldbank.org/curated/en/614891571530522496/pdf/Environmental
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