- Last month the country’s leadership produced its first report on the issue in 23 years as the trade war with the US and other issues prompted a fresh look at how it can continue to feed its population
- While the situation is “very sound” at present, policymakers are looking for ways to counter a series of environmental and political risks
Global trade conflicts and the increasing trend towards unilateral trade agreements have raised alarm bells in Beijing about how China can continue to feed its 1.4 billion people.
Last month the State Council, the country's cabinet, published a policy paper on food security " the first in 23 years. It said that while the current food supply situation was "very sound" it also flagged concerns about potential disruptions due to trade friction with the US. Climate change is another worry for future food production.
China's devastating experiences with hunger and famine mean that the prospect of food shortages touches a raw nerve.
"In the medium to long term, China's grain production and demand will remain closely aligned, which means China must not slacken its efforts to ensure food security," the paper said, adding that the "international food trade is being disrupted by protectionism and unilateralism and showing increasing instability."
Analysts say the "instability" word is the one that causes consternation in Beijing, but it is not just a concern in China.
The worst outcome is that trade wars will raise uncertainty and delay investment, including in new farming technologies, said David Laborde, a senior research fellow with the International Food Policy Research Institute.
He said the economic and demographic pressures that would result from climate change meant the world needed more technological innovation, but if trade conflicts undermined research and investment, then the world could face food shortages and higher prices in 10 or 20 years' time.
A recent report from the United Nations said that climate change was causing loss of arable land and poses a threat to global crops. It added that the stability of food supply is also threatened by the expected increase in extreme weather.
The topic is part of the discussions at the COP25 climate summit in Madrid starting on December 2, which brings together governments from around the world, including China, to come up with means to tackle what is increasingly being termed a climate emergency.
"High food prices are not a problem for the rich, but it is a big problem for the poor, and this could trigger political instability," Laborde said.
Beijing's paper on food security comes as agricultural products are at the forefront of trade disputes with Washington, which has thrown a spotlight on China's heavy reliance on imports of animal-feed grains, especially soybeans.
"Food security will be a paramount priority for China," said Cheng Guoqiang, food security adviser to the Ministry of Commerce and a professor at Tongji University in Shanghai.
"It doesn't mean China will pursue self-reliance in every aspect. While strictly sticking to the principle of being self-sufficient in rice and wheat, China will try hard to ensure overseas supplies of feed grains."
The white paper was followed by a directive from the State Council to ensure supply of "high-standard farmland" to improve food security.
High food prices are not a problem for the rich, but it is for the poorDavid Laborde
The directive set a target of having 67 million hectares of such farmland by 2022 " up from 43 million last year " to produce a yearly harvest of 500 billion kilograms of grain.
China is confident it can meet its rice and wheat demands for the next three decades, but supplying animal feed to meet the growing demand for meat will pose a "severe challenge" amid unfolding economic and geopolitical rivalries, Cheng said.
The last food policy paper 23 years ago was published to counter the argument that China's growth as a massive importer would cause food shortages elsewhere in the world " an idea promoted in the 1995 book Who Will Feed China? by Lester Brown, a former analyst in the US Department of Agriculture.
Since 2014, China's food security strategy has revolved around maintaining 95 per cent self-sufficiency in grains and 100 per cent in cereals.
But its soybean self-sufficiency was just 15 per cent in 2018 because more land was earmarked for rice and wheat and the country's farmers struggle to compete with high-yield producers abroad.
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Soybeans account for over 70 per cent of China's total grain imports, and grew at a compound annual rate of 11.5 per cent during 2001-18, according to a September report by Fitch Ratings.
Brazil and the US are China's two biggest soybean suppliers, accounting for 90 per cent of the country's supply in 2018. However, the trade war reduced supplies from the US, giving Brazil 75 per cent of the US market last year.
The tiny soybean became a focus of the trade dispute because in value terms the bean makes up 57.8 per cent of China's agricultural imports from the US and more than 60 per cent of the US soybean crop ships to China. Add to that the fact US farmers make up a significant voting bloc for US President Donald Trump and soybeans make for an obvious target in the trade argument.
When the US raised tariffs on Chinese steel and aluminium imports, Beijing retaliated with 25 per cent tariffs on US soybean imports in April 2018 before halting purchases completely later in the year
A temporary truce earlier this year saw imports climb back to 1.8 million tonnes in April " a long way from the 5.8 million tonnes imported at the start of 2018.
Trump is hoping Beijing will commit to substantial purchases of US agricultural products as part of any trade deal, but the targeting of soybeans has prompted some criticism because of China's reliance on overseas suppliers.
Last November Long Yongtu, the former trade negotiator who headed the talks for China's entry into the World Trade Organisation, publicly criticised the strategy as "unwise" because the country was "in dire need" of soybean imports.
The trade conflict had exposed the danger of China's dependence on US imports, said Zhang Wendong, an assistant economics professor at Iowa State University.
"China has redefined its food security goals and focused its attention mainly on food crops such as rice and wheat and pork. Meanwhile, it felt it was taken hostage on US soybeans, so will accelerate its push to be more diversified in the purchases of feed grains," he said.
"China will definitely aggressively expand farm product suppliers, and probably will examine the US share for each agricultural product," he said. "The most important strategic investments would probably be in Brazilian agriculture and infrastructure."
China's overseas agricultural investments have grown steadily over the past decade, rising to US$3.3 billion in 2016 from US$300 million in 2009.
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Chinese investors tend to enter less-developed countries where there are few competitors and the potential to raise productivity using Chinese technology, according to a US Department of Agriculture report last year.
This investment has focused on nearby areas, especially Southeast Asia and Russia's Far East " regions that are geographically accessible and have abundant land.
China's commerce ministry said Asia received half of China's outbound investment in agriculture in 2014.
According to the USDA, Europe received 15 per cent, but much of this was near China's northeastern border in Russia's Far East, with a further 15 per cent going to Oceania.
Africa received about 12 per cent and Latin America 6 per cent, with just 2 per cent going to North America.
Cheng from Tongji University said China's current global soybean supply structure needs to be diversified. He listed several areas as targets, such as the Black Sea, the Caucasus, Ukraine and Western Asia.
But Laborde warned that expanding production overseas also carried environmental risks.
A study he co-authored in May with Carin Smaller " an adviser at the International Institute for Sustainable Development " highlighted the link between soybean farming and deforestation. He argued that the major challenge was ensuring that China did not endanger other countries' food security to protect its own.
"China needs to rely on an external source of food. This is not an issue in itself," he said. "Depending on only one or two suppliers will represent a political and economic risk. So having more partners is important.
Opening up its own agricultural markets " from wine to dairy products " may also play an important role.
"Akin to its laboured industrial policy transition from high-speed to high-quality growth, the plan is to transition from being a large grain producer to becoming a food industry power where higher quality produce is sold at higher prices," said Sourabh Gupta, a policy specialist at the Institute for China-America Studies in Washington.
"For an arable land-scarce country, this move up the food value chain is essential, and foreign capital will be an important part of this equation," he said.
Whether China can satisfy a wealthier population's demands is crucial for the partyCheng Guoqiang
Back in the trade war trenches, however, rising protectionism remains a significant threat to food security.
Loss of market access triggers loss of income for farmers, and then policymakers turn to subsidies, which cause overproduction in some places and then dumping on other markets, said Laborde. "We may have this nasty domino effect," he said.
That is the tricky balancing act for China as it deals with trade conflicts on one hand, while ensuring it can provide the food supply for a nation of consumers that are demanding more and better quality. It has set itself a deadline, of sorts.
"Whether China can satisfy a wealthier population's demands is crucial for the party as it has promised the country will be a moderately prosperous society by 2021, the centenary of the party's founding," said food security adviser Cheng.
"A tomorrow without meat is not what most Chinese will see as a better future," he said.
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