Global side effects of Chinese growth

Published on Author delucam17

As China’s population continues to grow and move from the village to the city, they are becoming increasingly reliant on food imports. This trend has the potential to negatively affect not only China, but also the countries that provide these imports. In China, grain production has increased fivefold, lifting many people out of poverty. However, its demand for meat and necessary inputs to meat production can no longer be met domestically. Sixty percent of the soy feed used to fatten Chinese cows must be imported from places like Brazil. There, landowners are incentivized to farm for soy in leu of preserving the Amazonian rainforest, which significantly diminishes both global air and water quality.

Screen Shot 2015-03-30 at 11.58.36 AMThe environmental impact of China’s increased food import demand are even worse domestically. Due to the Land Circulation reform policy, small farmers are able to rent out their land to larger combines. This increases productivity, but also destroys many local ecosystems. In some places, aquatic ecosystems have been driven past the point of no return and are now algae-dominated and lacking high-value fish. This rate of ecological deterioration will undoubtedly result in China’s continuing inability to feed its people in the long run. Further, reliance on imports will diminish China’s GDP, decrease the overall amount of farmable land, and leave city dwellers at the behest of foreign food exporters.

One Response to Global side effects of Chinese growth

  1. 1. China’s geography varies, so we have to be careful not to confuse the problems in one region (lack of water in the loess plateau of the north) with those of other areas.

    2. Water systems can flush out in a few years, if (if!) inflows of nitrogen and so on are cut — cf. the experience of Lake Erie and many US waterways. So the next few years may not go well, but the longer term need not be grim.

    3. Grain looks different from (say) soybeans. China may not import much wheat or rice, as per our analysis in class – with incomes already comparatively high and population growth near zero, most of the growth in demand has already taken place, but will still rise. There will be additional improvements in land productivity that will (partially) offset the impact of environmental degradation. So what you have is trade as the difference between two large numbers, both growing. We can try to place upper/lower bounds on demand and supply. Those suggest modest future shifts in trade (towards more imports), which is also commensurate with viewing the composition of trade through the lens of comparative advantage.