History of Agriculture in The People's Republic of China - Agricultural Trade

Agricultural Trade

Since 1949 agricultural exports for most years exceeded agricultural imports. China's officials used this export surplus as an important source for financing the importation of high-priority industrial items. Agricultural exports rose through the years but have not grown as fast as industrial exports. In 1970, for example, agricultural exports accounted for 45 percent of total exports, but in 1985 China's US$6.5 billion in agricultural exports was only 20 percent of the total exports.

In the 1970s agricultural imports accounted for about 30 percent of total imports. For example, of the US$7.1 billion worth of products imported in 1977, US$2.1 billion (30 percent) were agricultural products. In 1985 US$4.7 billion worth of agricultural products were imported, which was only 5 percent of the US$42.8 billion of total imports. The ratio of agricultural imports to other imports was expected to rise in the late 1980s and 1990s.

Wheat has been imported nearly every year since the early 1950s. These imports averaged about 5 million tons in the 1960s and 1970s but rose to a peak of more than 13 million tons in 1982. Wheat imports fell as wheat output expanded rapidly, so that by 1985 imports fell to just under 5.5 million tons. Argentina, Australia, Canada, France, and the United States have been major sources of China's wheat imports.

China has been one of the world's largest rice exporters, which had been annually shipping out about 1 million tons. Rice exports go primarily to Asian and East European countries and to Cuba.

China has been both an importer and an exporter of coarse grains. Up to 1984 sorghum, millet, and corn exports usually totaled only several hundred thousand tons but reached a peak of over 5 million tons in 1985. In the mid-1980s corn was shipped primarily to Japan, North Korea, and the Soviet Union. Barley is imported as a livestock feed and as a feedstock to brew beer. Corn is imported for human consumption and for livestock feed. Quantities imported varied considerably depending on internal supply conditions and prices in international markets. Large quantities of corn were imported during the Great Leap Forward (when grain production fell dramatically), in the early 1970s, and at the end of the 1970s, when corn imports hit a peak of 3.6 million tons. Major coarse grain suppliers include Argentina, Australia, Canada, France, Thailand, and the United States.

Soybeans have been a major foreign exchange earner for most of last century. Static production and rising domestic demand for soybeans and soybean products meant a decline in exports until the early 1980s. For example, in 1981 Argentina and the United States shipped more than 500,000 tons of soybeans to China; these two countries and Brazil also exported soybean oil to China. Domestic production expanded in the early 1980s, however, and by 1985 soybean imports fell and exports exceeded 1 million tons. Also in the early 1980s, China began to ship soybean meal to Asian markets.

Before 1983 China was one of the world's largest importers of raw cotton. These imports averaged around 100,000 tons annually but climbed to a peak of nearly 900,000 tons in 1980. A dramatic increase in domestic cotton production filled domestic demand, and exports exceeded imports in 1983. In 1985 China shipped nearly 500,000 tons of raw cotton to Asian and European markets.

Sugar imports to China came primarily from Australia, Cuba, the Philippines, and Thailand. Quantities imported climbed steadily from 100,000 tons in 1955 to 500,000 tons in the mid-1970s and continued to rise dramatically to a peak of more than 2 million tons in 1985.

In addition to the commodities just noted, China also exported a host of other products from its vast agricultural resources. Large quantities of live animals, meat, fish, vegetables, and fruits were shipped to Asian markets. Tea, spices, and essential oils were shipped to major international markets. China also exported animal products, such as hog bristles, fur, and other animal products.

Agricultural trade remained an important component of China's general agricultural modernization effort. China continued to import grain and other agricultural products. These imports were used to maintain or improve living standards, especially in urban areas. In rural areas, imports helped reduce the pressure for more procurement, freeing resources for increased consumption or investment in local agricultural programs.

In the long run, China reduced the expenditure of foreign exchange needed to finance agricultural imports. These expenditures reduced the amount of other imports that were used for modernization and investment in the nonagricultural sectors of the economy. Success in reducing agricultural imports depended on the development of domestic sources of supply, for which China hoped to rely in part on new production bases for marketable crops. Pressure for increased consumption continued. The increase in population and the need for more agricultural goods (including grain, industrial crops, and grain-consuming livestock) to support higher real incomes both in urban areas and in the new agricultural base areas continued to be factors creating this pressure.