China’s Corny Problem

Published on Author Brian Lawler

China has had difficulties with international agriculture trade as it has opened its markets in the past decades.  The story of the Chinese soybean is one such problem.  In the early 2000s, China mostly grew its own soybeans.  However, as markets opened further and trade restrictions were removed, China succumbed to increasing domestic demand and low international prices.  China was importing more soybeans than they were producing by 2004 and now they are the world’s leading soybean importer, importing a staggering 63.4 million metric tons a year.

It is this fast paced move from self sufficiency to total dependency on imports that has Chinese officials concerned with the growing domestic demand for corn.  China was a net exporter of corn until 2010.  Now the question is whether China will promote their domestic growth of corn or if they will follow their historical precedent of the soybean.  GMOs may provide a boost to domestic output, but much of the country is still hesitant to adopt any genetically modified crops.

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2 Responses to China’s Corny Problem

  1. This post is a good example of the challenges China will face as it deregulates markets that have been protected for decades. In the long term deregulation should force Chinese markets to be more competitive and productive, but in the meantime global competition can be overwhelming and necessitate government protection of key industries.

  2. How big is the global soybean market? Is China so big as to affect international prices? And the other side is who are the exporters? What crops are substitutes for soybeans, which might thereby be affected indirectly? [Hint: my brother-in-law in Hermann, MO has a 3-crop rotation of corn, winter wheat and soybeans.] You might follow up with a post or two on the global perspective and then on corn. Go to the International Food Policy Research Institute (IFPRI), a member of the global CGIAR consortium that includes the International Rice Research Institute and similar centers. The US Dept of Agriculture also has a lot of economists and plenty of work on international issues such as this that are of immediate interest to American [and Argentinian and Canadian] farmers.