Struggling with a slowing economy, China is making a bid to encourage investment in the ailing agrarian sector.
Chinas agricultural sector employs one-third of citizens in the labor market and is responsible for close to 9% of the nations GDP. Unfortunately for the industry, the sector is also responsible for 28% of the nations outstanding bank loans. This discrepancy may be due n part to the continuing lack of productIt is crucial to the nations economic future to keep its agricultural industry afloat.
Recently, the sector has been described as unproductive, despite the growing investment that has been put into the industry. This trend of unproductive investment is akin to larger problems China has been facing. The nation has not realized that continued stimulus is ineffective at this point.
Nevertheless, large and small banks have been expanding their loans to agrarian sources with the hopes of increasing output and decreasing the sectors vulnerability.
The agricultural sector may be representative of larger trends in the Chinese economy, but even if it isn’t, problems with agriculture will have many repercussions. Feeding Chinas massive populace is a tremendous feat, and this effort will be made harder by a population that demands larger amounts of food to compliment its growing wealth. A failure in the agricultural sector could have massive repercussions on public health and the Chinese economy as a whole.