Maria Bruna Zolin and Matilde Cassin The Chinese Food Industry: development, constraints and policies - ISSN: 1827-3580 No. 29/WP/2016
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Maria Bruna Zolin and
Matilde Cassin
The Chinese Food Industry:
development, constraints
and policies
ISSN: 1827-3580
No. 29/WP/2016Working Papers
Depa rtme nt o f Ec o no mics
Ca’ Fos ca ri U nive rs it y o f V e nic e
No. 29/WP/2016
ISSN 1827-3580
The Chinese Food Industry: development, constraints and policies
Maria Bruna Zolin
Ca’ Foscari University of Venice, Department of Economics
and
Matilde Cassin
Ca’ Foscari University of Venice, Department of Economics
Abstract
Give n t he p he no me n o n of gr o wi n g u r b an i za ti o n, t he pr e ss u r e o n f o od
d e ma nd for a r i si n g p o p u lat i o n as we ll a s c ha n gi n g d ie t s, C h in a ha s h ad to
r e s or t t o im p or ts , be c o m in g a ne t i mp or te r of f o od . I n ab se nc e of e x te r n al
fl ow s , t h is sc e na r i o i s se t t o c o nt i nu e a nd c ou ld t he n m a te r ia l i ze i n a f u tu r e
Mal t hu sia n sc e nar i o . I m pr ove d e f fic ie nc y a nd pr od u c ti vi ty , r e f or m of la nd
u se r ig h ts , bu t a ls o t he p ol ic y of " g oi n g ou t " or la nd g r a bb i ng a r e s ome of
th e pla u s i ble s tr a te g ie s t ha t th e c ou nt r y c ou ld i m pr ove t o a v oid a n
ine x or a ble s ta bil i za ti o n or , a t w or st , a d e c l ine i n d ome s tic pr od u c t i o n, a s
we l l ta k i ng i n to a c c ou nt the i m pa c t of c li ma te c ha nge o n a gr ic u l tu r al
c om m od i tie s .
Star ti n g fr o m t he se pr e mi se s, t he p ap e r ai m s to an aly ze t he e x is ti n g
sc e na r i o id e nt ify i n g c o n str a i n s a nd po lic ie s th a t c ou ld pr e ve n t th e
d e ve l o pme n t of t he C hi n e se f o od ind u s tr y .
Keywords
Food demand, Food supply, China, Food industry, Food security, Food safety
JEL Codes
Q11, Q15, Q18, Q31, O13, R14
Address for correspondence:
Maria Bruna Zolin
Department of Economics
Ca’ Foscari University of Venice
Cannaregio 873, Fondamenta S.Giobbe
30121 Venezia - Italy
Phone: (++39) 041 2349132
Fax: (++39) 041 2349176
e-mail: zolin@unive.it
This Working Paper is published under the auspices of the Department of Economics of the Ca’ Foscari University of Venice. Opinions
expressed herein are those of the authors and not those of the Department. The Working Paper series is designed to divulge preliminary or
incomplete work, circulated to favour discussion and comments. Citation of this paper should consider its provisional character.
11. The context
China recently became the second world largest economy and its role in the global economy is
increasing and becoming more and more important and influential. In the years China, thanks
to a gradual transition from a centrally planned to a market based economy, has experienced a
rapid economic development with strong social changes.
Figure 1. GDP per capita and GDP annual growth per capita
Source: Authors’ elaboration on China Statistical Yearbook data, 2014
A s s h o w n in F i gu r e 1 , afte r y e ar s of c o n st an t e c o n om ic gr ow t h , r e c e n tly
C h in a se e m s t o be fa c i n g a ne w p ha se , c h a r a c te r ize d by d e c e le ra ti o n: G DP
in 20 12 a nd 20 13 h a s gr o w n a t t he l o we st r a te a c h ie ve d in t he p a s t 14 y e a r s.
M or e ove r , 201 5 i s t he y e ar of t he C hi ne se s t oc k mar ke t c r a s h, s tar te d o n
12 t h J u ne , a nd st il l n o t s ol ve d . C hi na se e m s t o ha ve e nte r e d a ne w e r a , a s it
se e k s t he tr a n si ti o n fr o m a n i nve st me n t a nd e xp or t- le d e c o no my to a
c o ns u m p ti o n- le d g r o w t h . De s pi te t he i ne v it ab le bu m ps a nd b a c k tr a c k i n g
a lo n g t hi s pa t h, t h is tr a n sf or ma t i o n i s e x pe c te d t o r e su lt i n e c o n o mi c
gr o wt h t hat c ou ld be m o r e su s tai na b le i n t he l o n g te r m ( US DA , 2 01 5) .
Be s id e t he gr o w th of G D P pe r c a p it a ( t ha t h a s q u i nt u p le d i t s va lu e be twe e n
200 0 a nd 20 13 , w it h a n an nu a l gr o w th r ate t ha t r e ac he s 1 0 % o n a ve r a g e ,
se e F i gu r e 1) , i m p or t a n t s oc io -d e mo gr a p hi c c h a n ge s ha ve oc c u r r e d . T h e
C h ine se p o pu la ti o n , w h il e c o nt i nu i n g t o g r o w ( pa ss i ng f r o m 5 00 mil li o n i n
195 9 t o 1 ,3 70 mi lli o n in 201 4, e q u al t o 19 .4 8 % o f the wo r ld ´ s p op u la ti o n ) ,
ha s sl o we d it s gr o wt h r a t e si nc e t he 197 0 s ( fr om a n a ve r a ge of 6 c hi ld r e n t o
1.4 c hi ld r e n pe r wo ma n in 2 013 a nd t he b ir t h r a te f r o m a n a ve r a ge of 4 4
bir t h s pe r 1 ,0 00 i n ha bi ta nt s i n 1 2 bi r t h ) d u e t o t he o ne -c hild p ol ic y 1 (
, y īt āi z hì ) ad o pt e d by th e C hi ne se go ve r nme n t (F i gur e 2) . Th e
pr og r e s s ive a gi n g of t he p o pu l a t io n i s o ne of t h e sid e e ffe c t s of t he o n e -
c hi ld p olic y , a s we ll a s t he i m bala nc e o f t he c ou ntr y ’ s ove r a l l se x r a t i o
to w a r d ma l e s ( r o u g h ly be t we e n 3 a nd 4 % m or e m a le s t ha n fe ma le s ). A t hir d
c o ns e q u e nc e w as i n s ta nc e s i n w h ic h t he b ir t h s of sub se q u e n t c hild r e n aft e r
th e fir st we n t u nr e p or te d or we r e hid d e n fr om a u t hor i tie s. Th o se c h ild r e n,
1 China began promoting the use of birth control and family planning with the establishment of the People’s Republic
in 1949, though such efforts remained sporadic and voluntary until after the death of Mao Zedong in 1976. A
voluntary program was announced in late 1978 that encouraged families to have no more than two children, one child
being preferable. On September 25, 1980, a public letter—published by the Central Committee of the Chinese
Communist Party to the party membership—called upon all to adhere to the one-child policy, and that date has often
been cited as the policy’s “official” start date. Since 2013, there has been a gradual relaxation of China’s family
planning laws that already allowed minority ethnic families and rural couples whose firstborn was a girl to have more
than one child and in 2015 China announced the intention of scrap its one-child policy, allowing all couples to have
two children for the first time since draconian family planning rules were introduced more than three decades ago.
2mo s t of w h o m we r e u nd oc u me nte d , fa c e d har d s h ip s i n o bta i ni n g e d u c a ti o n
a nd e m pl oy me nt .
I n 2 015 , C h i na a n n ou nc e d it s in te n ti o n to a b ol is h t he o ne -c hi ld p ol ic y :
C h ine se f a m ili e s c ou ld h a ve t w o c hi ld r e n wi th o u t inc u r r i n g t he pay me nt o f
pe na l tie s .
Figure 2. Population growth rate (1979-2014)
Source: Authors’ elaboration on World Bank data, 2014
F u r t he r m or e , the r e ha s be e n a pr o gr e ss ive p op u lat i on s hif t fr om r u r a l t o
u rba n a re a s (F i gu re 3 ); i n par tic u lar , t he p o pu l at io n liv i ng i n u r ba n ar e as ,
w hic h ha s s te ad ily c o n ti nu e d t o r i se ove r t ime , e xce e d e d t h o se l iv i ng i n
r u r a l a r e a s ( i n ma r ke d d e c li ne fr o m the m id 9 0s ) .
I n 201 4 t he C h i ne se a u t h or it ie s a d o pte d th e Na t i on a l Ne w- ty p e
Ur b a n i za ti o n P la n ( 20 14- 202 0) a i mi n g a t m ov i ng 250 mi ll io n r u r al r e sid e n ts
to ne wly bu il t c it ie s ove r t he ne xt t we lve y e a r s to se t o ff a ne w wa ve o f
gr o wt h , t he e ffe c ts of w hic h c ou ld we i g h o n ge ne r a ti o ns t o c o me . T he
u lt ima te g oa l of the go v e rn me nt' s m od e r ni z at io n pla n i s t o in te gr a te 70 %
of t he C h ine se p o pu l a t i o n i n t o c i tie s by 20 25 a nd , a s a c o n se q u e nc e , la nd
d is pu te s by f ar me r s w h o d o n o t ac c e p t t he t r a n sfe r c ou ld e x p one n ti all y
inc r e a se .
Fi gur e 3. P op ul at i on tr end (1 94 9- 2 013 ): t ot al pop ul a ti on (dx ) a n d
ur ban /r ur al p opul at io n (s x )
Source: Authors’ elaboration on China Statistical Yearbook data, 2014
3Ur b a n i za ti o n i s o nly o ne of t he c ha l le n ge s th a t t he C hi ne se r a p id e c o no m ic
a sc e nd a nc e ha s br ou g h t, t og e t he r w it h na tu r a l r e s our c e s e x pl oi ta ti o n a n d
c o ns e q u e nt e n vir o n me nt al i s su e s, s oc i al ine q u al it y a nd e x te r na l im b a la nc e s.
Fi gur e 4 Ch i na ine qual it y tr e nd: G IN I ind ex
S o urc e: A uth o rs ’ el ab orat i o n o n W o rld B a n k – P ov er t y a nd E q u it y d a ta b a n k, 20 1 4
Fi gur e 5 Pe opl e l iv in g on l es s t han $3. 10 a da y in C hi na
S o urc e: A uth o rs ’ el ab orat i o n o n W o rld B a n k – P ov er t y a nd E q u it y d a ta b a n k, 20 1 4
De s p ite t he r a pid e c o n om ic g r o w t h, C h i na s ti ll r e m ai n s a d e ve l o p in g
c ou n tr y , wi th a pe r c a pi ta i nc ome t ha t i s st il l a fr a c ti o n of t h o se i n
a d va nc e d c ou n tr ie s a nd wi t h a h ig h ly a nd i nc r e a si n gly u ne q u a l d i str i bu t i o n
of t hi s a m on g t he p op u la t i on . Al t h ou g h t he nu mbe r of p o or i s ste a d il y
d e c li ni n g - bu t s ti ll h ig h (F igu r e 5 ), s oc ial d i s pa r it ie s a r e r i si n g, a s s h o w n
by GI N I i nd e x 2 tr e nd ( F i gu r e 4 ) a nd by t he d is tr i bu ti o n of inc o me a m o ng
p o pu la ti o n : i n 20 10 , t he r ic he s t h e ld 4 7% of t he to ta l i nc ome c o mp a r e d t o
40. 7 % i n 199 0.
1.1 F o od sup ply
C h in a is t he t hir d w or ld ’s l a r ge s t c o u n tr y by t o t a l la nd a r e a be h i nd Ru ss ia
a nd C a na d a , w it h a la nd a r e a e q u a l t o 9. 4 mi lli o n km 2 , bu t ju st 10 % of t h e
w or ld ’ s a gr ic u l tu r a l l and and 7 % o f t he w or ld ’ s fr es h wa te r ( A N Z, 2 013 ) .
Se ve r e p ol lu t i o n i s su e s e xac e r ba te t h is sc ar c i ty , pa r tic u la r ly i n N or th C hi n a .
2 The Gini index measures the extent to which the distribution of income (or, in some cases, consumption
expenditure) among individuals or households within an economy deviates from a perfectly equal distribution. A
Lorenz curve plots the cumulative percentages of total income received against the cumulative number of recipients,
starting with the poorest individual or household. The Gini index measures the area between the Lorenz curve and a
hypothetical line of absolute equality, expressed as a percentage of the maximum area under the line. Thus a Gini index
of 0 represents perfect equality, while an index of 100 implies perfect inequality.
4A naly z i ng C h i ne se ar a ble land i s c om pl ic a te d be c au se of d a ta ac c u r ac y a n d
be c a u se of t he d i sc r e pa nc y a m o ng d a t a pr ov id e d by d iffe r e n t s ou r c e s . I n
th i s C ha pte r , we r e fe r r e d t o F A OS TA T d a ta , be c a u se we a r e i nte r e s t e d
mo r e , th an in t he ab s ol u t e figu r e s , i n t he tr e nd ov e r the ti me . I t is w or th t o
n ote t ha t F AO s ta ti st ic o n ar a b le la nd h ig h li gh t s a lo we r d i me n s io n t ha n
th a t r e p or te d by t he C hi ne se g ove r n me n t, (e q u a l to 1 21 .7 mil li o n he c t ar e s
in la te 2 012 ) , a nd i n t he s o-c a l le d “r e d l i ne ” ( , gēng dìh ó ngx ià n )
e q u al t o 1 20 mil li o n h e c tar e s (O EC D F AO , 2 013 ), e n su r i ng f ood se l f-
su ff ic ie nc y .
Be y ond t he a b s ol u te va l u e of t he d a ta , t he tr e n d , fr o m 1 990 t o 201 0 o f
a r a b le la nd i n C hi na (F i g u r e 6) i s s te a d y d e c r e a si ng, wh ile a gr ic u l tu r a l ar e a
is ove r a ll st a ble . Ar a b le l a nd r e pr e se nt s 1 0% of t he t o tal la nd and le s s th an
0.1 h a pe r c a pi ta (l e s s t h an 40 % of t he w or ld a ve r age ).
Fi gur e 6 A gr icul tur al l a nd* an d ar a bl e l and * * i n C hi na, tr en d
* Agricultural land refers to the share of land area that is arable, under permanent crops,
and under permanent pastures. Land under permanent crops is land cultivated with crops
that occupy the land for long periods and need not be replanted after each harvest, such
as cocoa, coffee, and rubber. This category includes land under flowering shrubs, fruit
trees, nut trees, and vines, but excludes land under trees grown for wood or timber.
Permanent pasture is land used for five or more years for forage, including natural and
cultivated crops.
** Arable land includes land defined by the FAO as land under temporary crops (double-
cropped areas are counted once), temporary meadows for mowing or for pasture, land
under market or kitchen gardens, and land temporarily fallow. Land abandoned because of
shifting cultivation is excluded.
S o urc e: A uth o rs ’ el ab orat i o n o n F A OS TA T data , 2 01 5
Ac c or d i n g t o th e C hi n e se C o ns ti tu ti o n la nd i s c o llec ti ve ly o w ne d b y
fa r me r s b u t c o ntr a c te d a t ind iv id u a l h ou se ho ld s ( C he n X iwe n , 20 06 ) and , as
c o ns e q u e nc e , t he C hi ne s e agr ic u l tu r a l se c t or i s c har a c te r i ze d by a n e x tr e me
fr a g me nt a t io n . Ac c or d i n g to t he a g r ic u ltu r a l c e n su s i n 19 97 (F igu r e 7 ) i n
C h in a t he r e we r e a l mo s t 20 0 m il li o n fa r m s (F AO , 2 013 ) , m o st of t he m
(93 % ) s i ze d le ss t h a n 1 ha , 5 % ha d a d i me n s io n be t we e n 1 a nd 2 ha , 2 %
be twe e n 5 a nd 10 ha , o nl y 0.4 % of t he fa r ms we r e la r ge r . F a r m in g i n C h i na
ha s a lw a y s be e n ve r y la b or in te n si ve .
5Fi gur e 7: Far ms b y l a n d s i ze cl as s (1 99 7)
2-5 Ha 5-1 0 Ha
2% 0,1 6%
1-2 Ha 10-20 Ha
5% 0,20%
less than 1 Ha
93%
S o urc e: A uth o r’ s el ab orat i o n o n F A Ost at dat a
De s p ite the s h or t age of ac tu al ly u sa b le na tu r al r e s ou r c e s, a gr i c u l tu r e ha s
pla y e d a ve r y i mp or ta n t r ol e i n C hi n a ’ s r e c or d of e c o n om ic gr ow t h si n c e
e c o n om ic r e f or m s be ga n i n 1 978 . I n t he f ir st r e for m pe r iod ( 19 78- 19 8 4)
a gr ic u l tu r a l G DP gr e w v e r y fa st a nd a l s o y ie ld s a nd la b or pr od u c ti vi ty i n
a gr ic u l tu r e gr e w by 5- 10 % pe r y e a r (P a r k, 2 009 ) , s o C h i na be c a me o ne o f
th e w or ld ’s la r ge st pr od u c e r s ; d e s pi te the d e c l i ne of su r fa c e , to ta l c e r e a l
pr od u c ti o n i s st e a d i ly gr o wi n g (F i gu r e 8 ) - i n pa r tic u la r c o r n pr od u c ti o n i s
r e c or d in g t he h ig he s t gr o w th ( F i gu r e 9 ) - a nd C h i na i s st il l se l f- su ff ic ie n t i n
a n u m be r o f ba sic s tr a te gic c r o p s a nd f o od s ou r c e s, pr ovid i ng f o od se c u r i ty
a nd e n su r in g s oc ia l st a b il ity .
Fi gur e 8 Ar abl e l and an d cer eal pr o duc t io n, tr e nd (19 80- 20 13 )
S o urc e: A uth o r’ s el ab orat i o n o n F A Ost at dat a
Fi gur e 9 Ma in cer eal s p r odu ct i on (1 0, 0 00 to ns )
S o urc e: A uth o r’ s el ab orat i o n o n F A Ost at dat a
6Du e t o r a p id u r b a ni z ati o n a nd i nd u st r ia li za ti o n, t he i mp or ta nc e of
a gr ic u l tu r e d e c li ne d ove r time , pa s si n g fr om 7 0 % of e m pl oy me nt a nd 30 %
of ou t pu t i n 19 80 t o l it tl e mor e th a n 3 0 % of e m pl oym e n t a nd le ss t h a n 1 0 %
of t ot a l ou t pu t i n 201 4. P ol lu ti o n ( of wa te r a nd s oi l) h as c o n tr i bu te d t o th i s
tr e nd , t o o. T hi s ha s le d t o hi g he r f o od i n fla ti o n i nc r e a s i ng i mp or t s of a
nu mb e r of so ft c o m mod iti e s . D e s p ite im pr o vi ng q u a li ty a nd sa f e ty a t a l l
le ve l s , C hi na ha s be e n (a nd i s) fa c i n g a nu m be r of c r it ic i s ms ab ou t t h e
q u ali ty a nd sa fe ty o f i ts d ome s tic a nd e x p or t f o o d mar k e t s.
Eve n if m od e r n f or m s of r e tai li n g ar e gr o w in g, C hi ne se agr ic u l tu r al
pr od u c ti o n i s pr e d o mi n a n tly pu r c ha se d d ir e c tly fr o m far me r s , o fte n ju st
a fte r ha r ve s t a nd o n th e r oa d sid e , by hu nd r e d s of t h ou sa nd s of pr iva t e
tr a d e r s w ho c r u i se v il la g e s a nd t he su r r o u nd i ng c ou nt r y s id e i n sm a l l tr u c k s.
Sta te - o w ne d e n te r pr i s e s no l on ge r m o n o p oli ze t he who le s a le
(p r o c e s si n g/ ma r ke ti n g/ d is tr i bu ti o n ) pa r t of t he su p ply c ha i n ( F i gu r e 10 ).
Th i s ha s r e su l te d i n a d i ve r s ifie d ow ne r s h ip s tr u c tu re of t he ma nu fac t u ri n g
ind u s tr y a nd c o mp e t it io n. P r i va t e e n te r pr ise s i n 201 1 no w c o n st i tu te 63 %
of the nu m be r of m a n u f a c tu r in g e nt e r p r i se s, bu t o nly 4 1 % o f an nu al sale s.
The p o pu lar i ty of pr i va te sma ll -s i ze d m an u fac tu r e r s i n t he i nd u str y i s li ke l y
to c on s tr a in fu r t he r d e ve lo p me nt .
Fi gur e 10 O wn er s h ip s tr uc tur e o f f o od a nd bev er ag e m anu fa ctur in g
ind us tr y in 201 1
S o urc e: A NZ , Ch i n es e N ati o na l B ur ea u o f S tat is tic s
De ve l o p me nt of t he fo o d man u fac tu r i n g i nd u st r y is u ne ve n be t we e n c oa s t a l
a nd in la nd r e gi o n s.
A su b st a nt ial po r t io n of manu fac t u r e d fo od i s p r od uc e d a nd c o n su me d i n
c oa st al ar e a s . T hi s is d u e to u r ba ni za t io n a nd h i g he r c o n su me r pu r c h as i n g
p o we r in t he se r e g io n s , w he r e p o pu la ti o n d e n s ity i s hi g he r t ha n th at in
in la nd a r e a s . I n in la n d a r e a s, w he r e t he r e is le ss u r ba ni za ti o n a nd
c om p ar at ive ly lo we r le v e ls o f d i s p o sa ble i nc om e , hi g h- valu e d pr oc e s se d
fo od s a r e c o ns u me d ma in ly in bi g c it ie s. A r u le of t hu mb i s t ha t t h e
maj or ity of fo od i s pr od u c e d i n t he N or t h (a b ov e S ha ng ha i) a nd c o n su m e d
in t he S ou t h.
The f ood i nd u str y s tr u c t u r e is d u al is tic : a hu ge a mo u n t of s mal l b u s i ne s s is
matc he d by l ar ge c o m pa nie s wi t h p r e d o mi na n tly Ch ine se c a p ita l a nd w h o se
mar ke t i s d om in ate d by d ome s tic d e ma nd . T he t o p 10 f o od a nd be ve r a g e
c om p an ie s ar e a s be ll o w r e p or te d .
No 1 COFCO Group
COFCO Group is the largest supplier of diversified products and services in the
agricultural products and food industry in China. It is devoted to utilizing renewable
natural resources to provide healthy and nutritious food, high quality lifestyle and
7services, as well as contributing to improve people’s living standards, social prosperity
and stability.
No 2 Inner Mongolia Yili Industrial Group Co Ltd
Inner Mongolia Yili Industrial Group Co Ltd is a dairy company. It is engaged in
processing and manufacturing of milk products, including ice cream, milk powder,
milk tea powder, sterilized milk and fresh milk under “Yili” brand. It is headquartered
in Hohhot. The company was an official sponsor of the 2008 Beijing Olympics.
No 3 Shuanghui Group
Shuanghui Group is a privately owned meat processing company headquartered in
Luohe, Henan, China. The company's businesses include hog raising, consumer meat
products, flavoring products, and logistics. It is the largest meat producer in China.
On May 29, 2013, Shuanghui announced it would purchase American pork producer
Smithfield Foods Inc.
No 4 China Mengniu Dairy Co Ltd
China Mengniu Dairy Co Ltd is a manufacturing and distribution company of dairy
products and ice cream in China. The company is based in Inner Mongolia and
manufactures dairy products under the Mengniu brand.
No 5 Bright Food (Group) Corp Ltd
Bright Food (Group) Co Ltd is a multinational food and beverages company
headquartered in Shanghai. Bright Food has four listed subsidiaries, Bright Dairy &
Food Co Ltd Shanghai First Provisions Store Co Ltd, Shanghai Maling Aquarius Co
Ltd and Shanghai Haibo Co Ltd
The company acquired a 60 per cent stake in the British breakfast cereals
manufacturer Weetabix Ltd in 2012 and agreed to acquire a 56 per cent stake in the
Israeli Dairy producer Tnuva in 2014.
No 6 Hangzhou Wahaha Group Co Ltd
Hangzhou Wahaha Group Co Ltd is a private company, and the largest non-alcoholic
beverage producer in China. The company is headquartered in Hangzhou, Zhejiang
province. Wahaha has roughly 150 subsidiary companies and 60 manufacturing bases
scattered throughout China. It employs about 60,000 staff.
No 7 Wuliangye Yibin Co Ltd
Wuliangye Yibin Co Ltd is a Chinese alcoholic beverage company. It specializes in
manufacturing baijiu, and best known for Wuliangye, made from five organic grains:
Proso millet, corn, glutinous rice, long grain rice and wheat. Headquartered in Yibin,
Sichuan Province, the company distributes its products all over the domestic market,
and exports to overseas markets. The company has eight major subsidiaries.
Wuliangye reportedly ranks first in terms of market share compared with other baijiu
brands.
No 8 Tsingtao Breweries Co Ltd
Tsingtao Brewery Co Ltd is China's largest brewery. Founded in 1903 by a German,
now claims about 15% of domestic market share. The beer is produced in Qingdao in
Shandong province and it gets its name from the old transliteration of the city's name.
The beer's present-day logo displays an image of Zhan Qiao, a famous pier on
Qingdao's southern shore.
No 9 Kweichow Moutai Co Ltd
Kweichow Moutai Co Ltd is a State-owned company in China, specializing in the
production and sales of Maotai liquor, together with the production and sale of other
beverages, food and packaging material. Its A shares were listed on the Shanghai
Stock Exchange in 2001. It is one of the stocks listed in Shanghai whose share price is
over 100 yuan.
No 10 Yurun Group Ltd
Yurun Group Ltd is the second-largest meat supplier in China. It is headquartered in
Nanjing, Jiangsu. It operates in two sectors, chilled and frozen meat, and processed
meat products, which are marketed under the brand names of Yurun, Furun,
Wangrun, and Popular Meat Packing.
C o nc e r ni n g f o od r e ta il i n g, t he r e a r e a nu mbe r of d iffe r e n t f or m a t s i n
C h in a :
8Hypermarkets (major hypermarket players are Carrefour, Wal-Mart, Metro, Lotus,
Auchan, and Tesco); Supermarkets (Major supermarket players are Lianhua,
Wellcome, ParknShop, China Resources Vanguard and Suguo);
Specialty Supermarket Stores and Boutique Stores (Major specialty supermarket
players are City Shop Supermarket (Shanghai), City-Super, CRV Ole, BHG (Beijing
Hualian Supermarket), Hisense Plaza in Qingdao, and Jin Bou Da in Zhengzhou);
Convenience Stores (such as 7-Eleven, Family Mart (Japan ItoYokado), Sincere
(Hong Kong), C-Store (Taiwan), and Lawson’s (Sino-Japan JV); Online Sales (one
company Taobao reportedly has a 75% market share at the moment; Traditional
Markets (Figure 11).
Eu r o m on i tor ( 20 14 ) a nd off ic ia l s ta t is t ic s s h o w s u pe r mar k e t s/ hy pe r m ar ke ts
a r e n o w d om i na t i ng t he r e ta i l la nd sc a pe , w it h a ma rke t s har e of ar ou nd
50 %.
Fi gur e 11 S tr u ctur e of Ch in a’s f o od d is tr ibu t i on ne t w or k
S o urc e: EU S M E , Th e F o od & B ev era ge Ma r ke t i n Ch i na , 2 015
C h in a i s t he w or ld ’ s l a r ge st c o nsu me r ma r ke t f or f o od a nd be ve r a g e
pr od u c ts ( Ta ble 1 ) s u r pa ss i ng t he U ni te d S ta te s f r o m 2 011 a nd t he se c o n d -
fa s te st gr o w i ng F & B ma r ke t i n As ia w i th a n a ve r a ge a n nu a l gr o wt h r a te o f
30 % be t we e n 200 9 a nd 2 014 . Mod e r n r e t ail f or m at s are pr ofi t in g fr o m th i s
d e ve l o pme n t
Tabl e 1 T op 10 F o ods er vi ce Mar k ets W or l d wi d e in 201 3, (s al es v ol um e,
U S$ B il l i o ns )
C oun tr y Ret ail
s al es
C h in a 510 .8
Un ite d S t a te s 492 .5
Japa n 214 .7
Br a zi l 141 .3
It a ly 100 .2
I nd ia 96. 1
Spa i n 96. 0
Un ite d K i ngd o m 86. 9
Sou t h K or e a 67. 3
F r anc e 62. 7
S o urc e: E u r om o nit o r I nt er n ati o nal , 2 01 4
9Tabl e 2 T op 5 F o ods er v i ce Co m pan ies Wor l dw i de, U S $ M il l io ns
C om pan y Inter nat i on al Fo ods er v i ce
Fo ods er v i ce Sal es in
Sal es Ch in a
1. Mc Do na ld ’ s Co r p 89, 12 6. 0 3,1 97 .2
2. Yu m! Br and s I nc 44, 14 0. 0 8,3 16 .5
3. D oc t or ’ s A s s oc ia te s I n c 20, 13 7. 0 106 .4
4. Se ve n & I H old in g s C o L td 18, 02 6. 2 21. 0
5. Bu r ge r Ki n g W or ld w id e I nc 17, 88 5. 8 169 .4
S o urc e: E u r om o nit o r I nt er n ati o nal , 2 01 4
A s we l l k n o wn , e x pa nd i n g fo od s e r vi c e e x pe nd i tu r e i s a r e su lt of gr e a t e r
d is p o sal i nc ome and o f ne w and m od e r n wa y s of life . Ac c ord i n g to
Eu r o m on i tor ( 20 14 ), t he C h i ne se f ood se r vi c e se c t or i s t he l a r ge st
w or ld w id e wi th 7. 3 mil li o n ou t le t s a nd sa le s va l u e d a t US$ 51 0 bil li o n i n
201 3. In f o od se r v ic e s se c t or t w o i nte r na ti o na l c om pa n ie s a r e a t t he t o p or
th e l i st ( Ta ble 2 ): Mc D o na ld ’ s a nd Yu m ! . The f i r st i s t he lar ge st c hai n of
ha mb u r ge r fa st f ood r e s t a u r a nt s i n t he w or ld , f ou nd e d i n t he U n ite d Sta te s
in 1 940 . T he A me r ic a n c om pa ny i s a d op ti n g a ne w bu si ne s s m od e l i n A si an
c ou n tr ie s u si n g lar ge r fr anc hi s in g m e t h od s. Yu m! Br a nd s , I nc . ( pr e v io u sly
Tr ic o n Gl o bal Re s tau r a n ts , I nc . ) i s a US A f as t f o od c om p any . I t ha s ve r y
we l l k no w n br a nd s su c h a s KF C , P i z za Hu t a nd i n Ma y 2 01 1, Yu m! a gre e d
to pu r c ha se m a i nla nd C h ine se ho t po t c ha i n L i tt l e She e p. T hi s , e ve n w it h
sa le s o n t he i n te r na ti o na l ma r ke t of a b ou t ha l f th o se of Mc Do na ld ' s, i n t h e
C h ine se ma r ke t h o ld s fir st p la c e w it h a tu r n o ve r of m or e t ha n t w ic e
1.2 Co nsu mp tion
Un ti l t he 19 80 s t he a ve r a ge C hi ne se h ou se h old d e vo te d m or e th an 50 % o f
th e ir i nc o me t o f o od (T a ble s 4 a nd 5 ), r e f le c ti n g it s i mp or ta nc e i n C hi ne s e
c u ltu r e and t he ir hi s to r i c vu l ne r a bi li ty t o f o od i nse c u r i ty . F o od ’ s s ha r e of
s pe nd i ng r e ma i ns t he si n gle la r ge s t ite m f or b ot h ur ba n a nd r u r a l
h ou se ho ld s, bu t ha s s h r u n k a s a pr o p or ti o n o f b u d ge t s. I n 19 90 f o o d
e xpe nd it u r e (C o n su m p ti o n e x pe nd i tu r e i nd e x = 1 00) wa s 54 .2 of t he t ot al
pe r c a pi ta c o n su m p ti o n i n u r ba n a r e a s a nd 58. 8 i n ru ra l are a s . T he i nd ic e s
ha ve be e n d e c r e a s i ng o v e r t he t ime a nd d i s p o sa ble i nc om e sp e n t o n f o od
c u r r e n tly a v e r ag e s ar ou nd 35 f or u r ba n ho u s e h old s and 3 8 f or r u r a l
h ou se ho ld s ( F i gu r e 1 2 ) i n 2 01 3.
Fi gur e 12 F o od C ons ump t io n Ex pen di tur e per c a p ita ( in dex =1 00 ).
Ur ba n an d r ur al h ous eh ol ds
S o urc e: A uth o rs ’ el ab orat i o n o n C h i na S t ati stic al Y ea r b o o k, 20 14
10A s th e E n ge l la w su g ge s ts , t he r e i s a wid e r a ng e , de pe nd i ng on t he i nc o m e
le ve l s of d if fe r e nt ho u s e h old s. T he w e a l t hie st 20 % of u r ba n h ou se h o l d s,
w hic h ac c ou nt f or 10 % of al l Ch i ne se h ou s e h o ld s, spe nd le s s t ha n 22 % of
th e ir d i s po sa b le i nc o me o n f o od . A t t he o t he r ha nd of t he spe c tr u m t he
p o or e s t 1 0 % of u r ba n ho u se h o ld s (ac c ou nt i n g fo r 5 % of a ll C hi ne se
h ou se ho ld s) s pe nd m or e th a n 40 % of t he ir d i s p os abl e i nc ome o n f oo d , a n d
66 % f or t he ir r u r a l c ou nt e r par t s (A N Z, 20 13 ).
So me c ha n ge s h a ve be e n oc c u r r i n g i n p o pu l at io n ha b it s a nd c o n su m pt io n s :
in u r ba n a r e a s e x pe nd i t u r e f or c l o t hi n g, t he se c o nd m o s t i m p or t a n t ite m
a fte r f o od i n t he 19 90 s ( e q u a l t o 13 % ), ha s b e e n sur pa sse d i n r e c e nt y e a r s
by “tr a n s p or t a nd c om mu nic a ti o n s” (1 5. 2 % i n 201 3) a nd “e d u c a t io n ,
c u ltu r e and r e c r e at io n ” (12 .7 % i n 20 13 ) i te m s . I n ru ra l are a s, i n ste a d ,
e xpe nd it u r e f or r e sid e nc e i s c o nfi r me d i n t he y e ar s a s t he se c o nd h i ghe s t
e xpe nd it u r e af te r f o od ( wi t h a pe r c e n tag e be t we e n 1 5 % a nd 1 9% ) , f ol lo we d
by “ tr a ns p or t a nd c om m u nic a t i on s ” (1 2% i n 20 13 ) a nd “ he a lt h c ar e ” ( 7 % i n
201 3) . P e o ple ’ s ha bi t s c ha n ge s ar e mai n ly c o n n e c te d t o r i si n g d is p o sa b le
inc o me s: pe r c a pi ta i nc o me pa s se d i n u r ba n a r e a s fr o m 1, 500 y u a n i n 1 9 90
to q u i te 30 ,0 00 y u a n i n 201 3 a nd in r u r a l a r e a s fr om 70 0 y u a n i n 19 90 t o
9,0 00 y u an i n 2 013 (F igu r e s 1 3 a nd 1 4) . It is w or th n o ti n g t ha t in t he y e a r
th e r a t io be twe e n pe r c a pi ta i nc om e in r u r a l a r e a s a nd t ha t in u r ba n a r e a s
ha s e x pa nd e d , p a s si n g fr o m a b ou t a h a lf t o o ne t hird . A naly z in g d a ta
c o nc e r ni n g c o n su m p ti o n , we c a n se e a d i ffe r e nt tr e nd i n r u r al a nd u r b a n
h ou se ho ld s: i n t he fi r s t c ase t he sh ar e of c o n su mp ti o n o n t ota l i nc ome ha s
be e n i nc r e a si n g o ve r t h e y e a r s ( 54 .6 % i n 19 90 , 68 .7 % i n 20 13 ), in t h e
se c o nd c o n su m pt i on s ha r e ha s be e n d e c r e a si n g ( fr om 84 .3 % in 19 90 to 61 %
in 20 13 ).
Ur b a n i za ti o n, br a nd e xp o su r e a nd c o n su me r a fflu e nc e , f o od safe ty
c o nc e r n s, he al t h c o ns c iou s ne s s, d e ma nd f or c o nve nie nc e , i m pr ove d
in fr a str u c tu r e , d e ve l op m e n t of t he r e t a il i nd u s t r y a r e o t he r a s pe c t s t h a t
a ffe c t c o nsu m p ti o n pa tt e r n s. In pa r tic u la r , f o od c o n su m pt io n pat te r n s i n
C h in a ha ve c ha n ge d s ig n ific a n tly wi t h im pr ove d st a nd ar d s of l ivi n g. M or e
c o ns u me r s ar e e x p ose d to a gr e ate r d ive r si ty of c o ns u me r pr od u c t s, b o t h
loc a lly a nd w he n tr a ve l li ng a br oa d . C h ine se c o ns u me r s ar e i nc r e a si n g ly
d isc e r n i ng , a nd ma ny n o w se e k th e f ol lo w i n g q u a li tie s w he n ma ki n g
pu r c ha se s: c o nf id e n c e in f o od sa fe ty a nd i n gr e d ie n t s’ i n te gr i ty ; hi g h
q u ali ty ; e xc e lle n t nu tr it io nal va lu e ; be t te r li fe s ty le t hr ou gh a var ie ty o f f o o d
a nd be ve r a ge s ; mo d e r n p a c ka g i ng ; fr e s h ne s s; c o nv e nie nc e .
Fi gur e 13 F o od ex pe ndi tur e per ca p ita (y uan an d r ate ) in ur b an
hou s eh ol ds
S o urc e: A uth o rs ’ el ab orat i o n o n C h i na S t ati stic al Y ea r b o o k, 20 14
11Fi gur e 14 Fo od ex pe ndi tur e per c a p ita ( y uan an d r at e ) i n r ur al
hou s eh ol ds
S o urc e: A uth o rs ’ el ab orat i o n o n C h i na S t ati stic al Y ea r b o o k, 20 14
If t he r a te of i nc r e a se t e nd s t o d e c r e a se a s i nc o me r ise s , n ot s o the f o o d
e xpe nd it u r e i n ab s ol u te t e r ms t ha t pa s se s f or u r b an h ou se h old s fr o m ne ar ly
694 in 19 90 to 6, 31 1 y u an i n 201 3, and f or r u r a l h ou se h old s fr o m 15 6 i n
199 0 t o 20 54 y u an i n 2 01 3 (F ig u r e s 13 a nd 1 4) .
L o ok in g a t t he tr e nd t hr e e pe r i od s c ou ld be id e n tif ie d . I n the fir st (1 99 0 -
200 0) , f o od e x pe n se s i n a b s olu te v alu e s a nd gr o wt h r a te s m ove in t he
o p po s ite d ir e c t i o n, bu t wi t h e q u al ma g ni tu d e , m or e pr o no u n c e d i n
p o pu la ti o n s of u r ba n ar e as T he ind e x , w hic h i n 19 90 a m ou n te d to 5 4. 2 ,
s wi tc he s t o 39 .4 in 20 00 for u r ba n ho u se h o ld a nd , in r u r a l ar e a s , fr o m 5 9 t o
49 i n t he r e p or ti n g pe r i o d .
The y e a r s 2 00 0-2 01 0 r e pr e se nt th e pe r i od of gr e at gr o w t h of e x pe nd it u r e
o n f o od c o n su m p ti o n in ab s olu te te r m s . F or u r ba n h ou se ho ld s, fr om 1, 97 1
in 200 0 we m o ve t o 4 .8 a nd f or r u r a l f r o m 464 t o 1 ,31 3 y u a n wi t h,
h o we ve r , m or e and d e c r e asi n g i nd e x m ov e me n ts , bu t le s s c o n s pic u ou s ove r
th e pr e vi ou s pe r i od . In the la st pe r i od o f t ime (20 10 -20 13 ), t he i nd i c e s
s ho w a r e la t ive sta b il ity in u r ba n a r e a s , w h ile d e cr e a s in g m o s t si g ni fic a n t ly
in r u r a l p o pu la ti o n s a g a in s t, h o we ve r , a n e x p e n se , in a b s olu te v a lu e s ,
inc r e a s i ng a nd th a t e xc e e d s 6 .3 y u a n pe r c a pi ta be twe e n c ity r e sid e n t s a nd
2.0 i n r u r al o ne s.
1.3 Trad e
Un ti l t he mid d le o f t he fir s t d e c a d e of 2 00 0, C h in a is a f o od e x p or t e r
(Ta b le 3 ).
12Table 3 China food trade 1980-2014 (US Dollar, million)
China food trade
Trade balance
(exports-
Imports Exports imports)
1980 3.206,3 3,128,9 -77,4
1984 2,363,3 3,798,1 1,434,7
1985 1,755,6 4,274,7 2,519,1
1986 2,049,7 5,286,2 3,236,5
1987 3,178,3 5,761,0 2,582,7
1988 4,301,1 6,943,2 2,642,1
1989 5,396,5 7,316,9 1,920,4
1990 4,618,7 7,867,5 3,248,8
1991 3,904,9 8,821,2 4,916,3
1992 3,941,0 9,636,8 5,695,8
1993 2,982,2 9,940,4 6,958,2
1994 5,077,9 12,178,5 7,100,6
1995 9,236,4 12,299,1 3,062,7
1996 8,191,2 12,427,4 4,236,2
1997 7,182,4 13,050,4 5,868,0
1998 6,684,6 12,181,6 5,497,0
1999 6,725,8 11,733,6 5,007,8
2000 9,042,6 13,559,3 4,516,8
2001 9,366,2 14,222,1 4,855,9
2002 9,891,2 16,163,5 6,272,4
2003 14,970,5 19,241,8 4,271,3
2004 21,121,1 20,815,2 -306,0
2005 21,540,7 24,635,4 3,094,6
2006 22,917,3 27,862,6 4,945,4
2007 32,422,3 33,160,8 738,5
2008 49,521,7 35,887,5 -13,634,2
2009 45,248,4 35,318,6 -9,929,8
2010 59,556,2 44,152,5 -15,403,7
2011 75,455,2 54,167,8 -21,287,4
2012 90,650,4 56,311,9 -34,338,5
2013 98,646,3 59,977,6 -38,668,7
2014 105,263,6 63,490,9 -41,772,7
S o urc e: A uth o rs ’ el ab orat i o n o n W T O da ta , 20 14
F r o m t ha t t ime , pa r t ly b e c au se of t he i nc r e ase i n po pu la ti o n, i nc o me an d
u rba n i zat i on , d o me st ic p rod u c ti o n ha s n o t a l way s be e n c ap ab le of me e t i n g
d ome s tic d e ma nd .
The tr ad e d e fic it of t he agr ic u l tu r al ba la nc e c o n s olid a te d i n 20 08 a nd t h e
d e fic i t gr ad u ally wid e ne d u n t il it r e ac he d 4 1. 8 milli o n d o lla r s i n 20 14 . I n
pa r tic u la r , si nc e C hi na j oi ne d t he W or ld Tr a d e Or ga n i zat i o n i n la te 20 0 1,
a gr ic u l tu r a l e x p or t s t o t he c ou n tr y ha v e g r o w n e xp o ne n tia lly ( W TO , 2 01 5) .
I n r e c e nt y e a r s , C h i na ’ s im p or te d f o od s ou r c e ha s be c o me i nc r e a si n g ly
13in te r na ti o na l. I n 2 01 4, C h in a ’ s i m p or te d f o od pr od u c ts c ame fr om 19 2
c ou n tr ie s a nd r e gi o n s .
Figure 15 China food imports and exports (1980-2014)
Source: Authors’ elaboration on WTO data
The top 10 importing sources in terms of import value were the EU, ASEAN; New Zealand;
US; Australia; Brazil, Canada, Russia, Argentina, South Korea. In 2014, these areas accounted
for over 82% of China’s imported food trade.
The top 5 EU countries importing to China were France, the Netherlands, Germany, Ireland
and Italy.
Tabl e 4 T op 10 A gr i f oo d and s ea f oo d im por ter s W or l d wi de, 20 13*
C oun tr y Imp or t s To p s u ppl ier s and mar ket s har e
U S$ 1 2 3
bil l i ons
Un ite d S t a te s 127 ,4 Canada Me x ic o Ch in a
Ch in a 118 .0 Un ite d S t a te s Br a zi l Au str ali a
(22 .6 % ) (19 .1 % ) (7 .3 % )
Ge r m any 106 ,8 Ne t he r la nd s F r anc e It a ly
Japa n 76, 5 US Ch in a Canada
Ne t he r la nd s 71, 5 Ge r m any Be l giu m Br a zi l
Un ite d 68, 8 Ne t he r la nd s F r anc e Ir e l a nd
Ki n gd om
F r anc e 64, 9 Spa i n Ne t he r la nd s Be l giu m
It a ly 54, 8 Ge r m any F r anc e Spa i n
Be l giu m 42, 0 Ne t he r la nd s F r anc e Ge r m any
Ru s si a 39, 7 Br a zi l Ge r m any Ukr a ine
*F or t he EU c ou ntr ie s is t he pr o vi si o n of t he C om mu ni ty pr e fe r e n c e
pr i nc i ple
S o urc e: A uth o rs ’ el ab orat i o n o n E ur om o n it or In te r na t io na l, 20 14
Am o n g t he t o p te n l is t of i m p or te r s of ag r if o o d and se a f ood w or ld w id e ,
C h in a r a nk s se c o nd , a fte r t he U ni te d S ta te s a nd a he a d of Ge r ma ny .
A naly z i ng of T ab le 4 i t c an be se e n th at th e e x c ha n ge be t we e n Eu r o pe a n
c ou n tr ie s i s c ar r ie d ou t mai nl y be t we e n E U c ou n tr ie s (a c o n se q u e nc e o f t he
C o mmu n ity pr e fe r e nc e c l a u se ), w hi le t r a d e i n ot h e r c ou n tr ie s a p pe ar s m or e
d ive r sif ie d . As far a s i nt e r nat i on al tr ad e i s c o nc er ne d , Mar ke t Ec on o my
Sta tu s ( M ES ) h as , r e c e nt ly , c o me t o the t o p of i n ter nat i o nal Age n d a
be c a u se C h in a i s a s ki n g f or a n a u to ma tic a c q u is it i on of M ES a fte r 11
De c e m be r 2 016 . Ac h ie v in g M E S at t he W TO is o ne o f C h in a’ s c o r e
str a te gic go a l s. F or C hi n a , a m o ng ot he r be ne fi t s, it w ou ld ma ke i t fa r m or e
14d iffic u l t f or t he U S or E U t o im p o se ste e p ta r iff s o n C h i ne se c om pa ni e s f or
u nfa irly d u m pi n g l o w-c o st g o od s o n t he ir m arke ts . As o ne w ou ld e xp e c t ,
th e r e c og n it io n o f ma r ke t e c o n omy t o C h in a is ha m pe r e d by th e EU
(S ou the r n Eu r o pe c ou ntr ie s e sp e c ia lly ) a nd t he U S wor r ie d a b ou t ha vi n g t o
fa c e a n u nfa ir c o m pe t it i o n ba se d on lo w c os t of pr od u c ts . M or e , ac c or d i n g
to t he W TO , C hi na s ti ll a p pl ie s p r ic e c o nt r o l t o c om m od i tie s a nd se r vic e s
wi t h a d ir e c t im pa c t o n th e d o me st ic e c o no my a nd pe o ple ’s li ve li h o od s.
Ag r ic u ltu r al a nd f o od pr od u c ts ar e se n si tive f or a nu m be r of r e a s o ns . Tr a d e
c ou ld d r a mat ic al ly c ha n g e in t he ne xt y e ar s.
M or e ove r , c o nc e r n s in th e f o od tr ad e b e t we e n C hi na a nd t he EU , f o r
Eu r o pe a n c ou nt r ie s d e r i ve d fr o m r e c o gn it i o n of a ge o gr a p hic al i nd ic at i o n
pr od u c ts ( E u r ope a n C o mm is s io n , 201 3) , w h ose s pe c ifi c at i on s ar e
c o nt i nu ou sly s ou r c e of c o nfl ic t s .
Tabl e 5 a Te n r e n own ed E ur ope an pr o duc ts r eg is ter ed i n t he o ff ic i a l
AQ S IQ * Ch in es e G I r e gis ter
Designation Country Type of product
Comté France Cheese
Grana Padano Italy Cheese
Priego de Córdoba Spain olive oil
Prosciutto di Parma Italy Ham
Pruneaux d'Agen/Pruneaux d'Agen mi-cuits France dried fruit
Roquefort France Cheese
Scottish Farmed Salmon United Kingdom Salmon
Sierra Mágina Spain olive oil
West Country Farmhouse Cheddar United Kingdom Cheese
White Stilton Cheese/Blue Stilton Cheese United Kingdom Cheese
*General Administration of Quality Supervision, Inspection and Quarantine of the
People's Republic of China
S o urc e: E u r ope an C om mi ss i o n 2 01 3
To su p p or t be t te r pr o te c ti o n of t he se pr od u c t s, t he EU h as s ig ne d vari ou s
mu l ti late r al a nd b ila te r a l agr e e me nt s . A mo n g t h e se i ni tia ti ve s, we s h ou l d
p oi n t ou t t he pr oje c t “ 1 0 pl u s 1 0 ” ( Eu r o pe a n C om mi s si o n 2 012 ) sta r te d in
Ju ly 2 00 7 whe n b o t h th e E U ( E u r ope a n C om mi ss i o n) and C hi na fo r ma l ly
lod ge d ` a p p lic a ti o n s f or th e pr ote c ti o n of 10 a gr i c u ltu re G I s in e ac h o the r 's
te r r i t or ie s ( Ta ble s 5a a nd 5 b) . W it h r e g a r d t o Eu r o pe a n pr od u c ts a s
Ge o gr a p h ic al I nd ic at i o n s i n Ch i na a nd a s par t of t he s o-c a lle d “1 0 + 10
pr oje c t ”, t he l i st s h o ws 5 c he e se s, 2 oi ls , 1 ha m , 1 sa lm o n a nd 1 d r ie d fr u i t .
I n te r m s of c o u n tr ie s , F r a nc e a nd t he U K ha ve fe a tur e d w it h t hr e e pr od u c ts
e ac h , I taly a nd Sp ai n w i th tw o . I n p ar al le l , t he Eur o pe a n C om mi s si o n h as
e xam i ne d a nd r e gi s te r e d 10 C h ine se fo od na me s wi t h t he la st 2 C h ine se
na me s “P i n g gu d a Ta o ” (pe a c h ) a nd “ D o ng s ha n Ba i L u Su n ” (a s par a gu s)
r e c e iv in g pr o te c te d s ta tu s i n t he E U a s Ge o gr a p h ic a l I nd ic a t i on s ( Eu r o pe a n
C o mm is s io n , 2 01 3) .
15Tabl e 5 b Ten r en ow ne d C hi nes e pr od ucts pr o tec ted i n t he E U
De s ig na t io n L a ti n Tr a n sc r i p ti o n Ty p e of pr od u c t
P in g gu Da Ta o P e ac h
Ya nc he n g L on g Xia c r ay fi s h
Z he nj ia ng Xi a n g C u r ic e v in e ga r
Do n g s ha n B ai L u Su n as par a gu s
Jin xi an g Da S u a n Ga r l ic
L o ng ji n g c ha Te a
Gu a nx i Mi Y ou h o ne y p ome lo
Shaa n xi p i ng gu o A pp le
L ixi a n M a S ha n Ya o Ya m
L o ng k ou F e n Si ve r m ic e l li/ n o od le s
S o urc e: E u r ope an C om mi ss i o n 2 01 3
The se 10 C hi ne se na me s ha ve be e n ad d e d to t he m or e t ha n 100 0 na me s of
a gr ic u l tu r a l pr od u c ts a nd food s tu ff s , w hic h a r e pr ot e c te d i n t he EU (a m o n g
th e m 1 3 n o n- E U G Is ) . No t on ly d oe s t he GI sy ste m pro vid e a n i m po r ta nt
pr ot e c t io n a ga i ns t im it a ti o n s, bu t a ls o it i s a u se fu l ma r ke t i ng t o ol
( Eu r o pe a n c om mi s si o n 2 013 ).
2. Policies in a nutshell
The a na ly si s of th e hi st or ic al ove r vie w of C hi na hi g hl ig h ts t he gr e at
im p or t a nc e gi ve n t o a g r i c u ltu r e by C hi ne se p olic y si nc e t he pr oc la ma ti o n of
th e Re p u b lic of C hi na on Oc t o be r 1, 1 94 9. Me e t in g se lf- su ffic ie nt ly
d ome s tic d e ma nd fo r c e r e als a nd a v o id ha vi n g t o r e s or t t o ma s sive i m p or t s
ha s a lw a y s be e n t he ma i n c o nc e r n of t he g ove r n m e n t.
On 28 Ju ne 1 950 L iu S h aoq i ( ) i m ple me n te d t he f ir s t agr ic ul tur a l
r ef or m ( , t ǔ g ǎ i ), c al le d “la nd t o t he ti lle r ” (
g è n g z h ě y ǒ u q í t i á n ) ad d r e sse d to a ll t he pr o pe r ty le s s far me r s ( ab ou t 7 0 % of t h e
500 m il li o n pe o pl e i n t he c ou ntr y s id e ) . I t im p lie d t he i nc r e a s e d
fr a g me nt a t io n of a gr ic u ltu r a l la nd a nd t he c o n se q u e nt im p o s si bi li ty of
e xte n si ve c u lt iva ti o n . Ju st t hr e e y e ar s afte r the la nd r e f or m wa s la u nc he d
th e pla n fo r c ol le c t iv i za ti o n of t he la nd wi t h th e a i m of se tt in g u p a ne w
pr od u c ti o n s tr u c tu r e ba s e d on c ol le c t ive o w ne d c om pa n ie s: la nd o wne r s h i p
pa s se d t o t he c o mm u n it ie s a nd fa m il ie s we r e f or c e d t o se ll to the S ta te
su r plu s of w he a t pr od u c t io n a t pr ic e s a nd q u a n ti t ies se t by t he g o ve r nme n t
( Za nie r , 2 01 0) .
The ne w Ch i ne se c ou n t r y sid e ar r an ge me nt ( i n 195 6 90 % of t he fa r me r s
we r e e nr ol le d i n s oc i a li st c o o pe r a ti ve s ) se e me d to give ne w i m pe tu s t o
a gr ic u l tu r a l pr od u c t i o n w hic h r e c or d e d a n a n nu a l i nc r e ase o f 3 . 5%
(c om pa r e d w it h the le ve l of pr od u c ti o n 19 52 ) i n c e re al t ha n ks t o ad o pt i o n
th e Gr a i n f ir st p ol ic y ( , y ǐ l i á n g w è i g ā n g ) (Za ni e r , 20 10 ).
Af te r t he fir s t fi ve -y e ar pla n ( , w ǔ n i á n j ì h u à ), t he Ch i ne s e
le a d e r sh i p o pe ne d a ne w s tr a te gy , k n o w n a s t he “ Gr e a t L e a p F or wa r d ”
( , d à y u è j ì n ): the o bje c t wa s t o “ pr od u c e m or e , m or e q u ic kl y and a t a
be tte r pr ic e ” (Be r gè r e , 200 9 p. 1 10 ) to a l l o w C h in a wi t hi n 15 y e a r s t o
16ove r ta ke t he Un ite d Ki n gd om ( , gǎnshàngyīngguóshìwǔnián).
Ac t u al ly , a gr ic u l tu r a l p r od u c ti o n i n 1 96 0 r e ac h e d only 1 44 mi lli o n t on s,
d o w n 26 .4 % c o m par e d t o 19 58 ; o nly in 1 96 5, t he r e wa s a r e su m pt io n of
pr od u c ti o n t o pr e vi ou s le ve l s r e s pe c t t o t he Gr e a t L e a p (Be r gè r e , 200 9 ).
The d e c li ne i n pr od u c ti o n was f o ll o we d by t he c o nt ra c t i o n of c o n su m p ti o n:
in 1 960 t he s h or t a ge be c ome s r e a l fa m i ne in t he C h ine se c ou nt r y s id e , w h e r e
th e pe r c a p i ta c o n su m p ti o n of c e r e a ls fa ll s by 23 .7 %, pa ss i ng fr o m 2 04 k g
in 19 57 t o 1 56 kg i n 1 9 60 (Be r gè r e , 2 00 9) br i ng in g mi lli o n s of pe o ple t o
d e at h (Br o w n, 19 95 ).
I n 1 978 be ga n a ne w e r a o f r e f or m, w it h t h e e c o n om ic l i be r al i za ti o n
im ple me nte d by De n g X i a o pi n g ( ) af te r th e d e at h of the le ad e r Ma o
Ze d o ng ( ) . Tw o maj or ne w fe atu r e s we r e in tr od u c e d : t he h ou se h o ld
r e s p on s ib il ity sy s te m a n d t o wn s hi p a nd v il la ge e n ter pr i se s ( O EC D, F A O,
201 3) . T ha n ks t o t he fi r st o ne , be t we e n 198 1 a n d 198 2, ab ou t 9 0 % of t he
fa r m fa mi lie s r e tu r ne d to be c ome r e s p o ns i ble f or a pl o t of la nd , wh ic h wa s
a lw a y s pu bli c ly o w ne d b u t wa s gi ve n i n c o nc e s si o n t o fa mi lie s f or l o n ge r
a nd l on ge r pe r i od s of ti me ( Za nie r , 2 01 0) . T he se c ond i n n ova ti o n , k n o w n
wi t h t he a c r o ny m of T V E or t o w n s hi p a nd vi lla ge e n te r pr ise s ( ,
x i ā n g z h è n q ì y è ), le d t o a si g nif ic a nt i nc r e ase i n a gr ic u lt u r al pr od u c t i o n, s o
th a t C h i na r e tu r ne d t o e xp or t c e r e a ls a nd a g r ic u l tur a l i nc ome tr i p le d
be twe e n 19 79 a nd 19 85 .
At t he be gi n ni n g o f t he 199 0s C h in a e n te r e d i n te r na ti o na l ma r ke t s: in 1 99 3-
199 4 t he c ou n tr y ’ s e x p o r ts mar ke d a n i nc r e a se o f 6 0% , a nd t he a m ou nt of
in ve s t me nt fr om a b r o a d wa s gr e a te r t ha n i n a l l f ou r te e n pr e v io u s y e a r s
( Za nie r , 20 10 ); t he e nt r y int o the W TO i n 20 01 a nd t he a bo li ti o n o f im p o r t
d u ty i nc r e a se d si g nif ic a n tly i m p or t s of a gr ic u lt u r al g o od s. I n 20 08 , C hi n a ,
w hic h u n ti l t he n had be e n a ne t e x p or te r of a gr ic u ltu r a l pr od u c ts , be c a me a
ne t i m po r te r .
I n 2 00 6, t he a gr ic u l tu r a l ta x t ha t ha d be e n le vie d f or mi lle n nia w a s
a b ol is he d , b r i n gi ng sa v i n gs t o fa r me r s of ove r 2 1 bi ll io n d ol lar s ( Ni , 201 3) .
El im i na te d ta xa ti o n, ov e r th e y e a r s t he g o ve r nme n t ha s a ll oc a te d a n
inc r e a s i ng s ha r e of it s fi na nc i a l r e s ou r c e s t o t he a gr ic u l tu r a l su b sid y sy ste m
th a t c o u ld be c la ss ifie d i n f ou r ma i n ty p o lo g ie s o f su b sid ie s :
1. Grants for the improvement of seed ( , l i á n g z h ǒ n g b ǔ t i ē ). In place
since 2002 to promote the use of new and improved varieties of cultures, accelerating
their use and their extension and, starting from 2009, extended to the whole country
as far as rice, wheat, cotton and corn (Ni, 2013).!
2. Direct payments to producers of cereals ( , l i á n g s h í z h í b ǔ ). Adopted
since 2004 aiming at coping with the drop in cereal production registered during the
previous six years. The stated objective of this measure is to increase the production
of cereals promoting self-sufficiency of the country.!
3. Subsidies for the purchase of agricultural machinery ( , g ò u z h ì b ǔ t i ē ).
With the aims to promote the mechanization of agriculture to increase the level of
productivity. The stated goal is to achieve by 2020 the 70% of mechanization of
farming methods (DuPoint, 2013).
4. Generic grants to inputs ( , n ó n g z ī z ò n g h é b ǔ t i ē ). This measure
was adopted starting from 2006 because of continuing fluctuations in prices of
agricultural inputs including fertilizers and gasoline.
Im me d i a te ly a f te r e n te r i n g t he W T O, t he C hi n e se a u th or i tie s s tar te d t o
str e n g t he n t he p oli c y o f su p po r t in g ma r ke t pr ic e s to su p p or t t he in c o me o f
fa r me r s a nd e nc ou r a ge pr od u c ti o n. T h is p o lic y of s u p p or t , h ow e ve r , h as
tr i gg e r e d a me c ha n is m of r i si n g h ome pr ic e s th a t , c o m bi ne d w it h t h e
a p pr e c ia t i on o f t he C hi ne se c u r r e nc y , ha s e r od e d t he c om pe ti ti ve ne s s of
C h ine se a g r ic u ltu r a l g o o d s o n t he i n te r na ti o na l ma rke t (O E CD F AO , 2 0 13) .
A se c o nd e ffe c t wa s t he i nc r e a se i n i m po r t s of f or eig n pr od u c t s a v a il a b le a t
17a lo we r pr ic e a nd th e r e f or e mo r e c om pe ti tiv e . A lt h ou gh C hi na i s e x pe c te d
to be c ome t he wo r ld ' s la r ge st p r od u c e r of r ic e a n d w he a t , a nd oc c u p ie s th e
se c o nd p la c e i n ste a d i n w or ld pr od u c ti o n of c or n a nd bu c k w he a t, t he
e xp or t of c e r e al s ( i nc lu d in g b ar le y , c o r n , m ill e t , r ic e , r y e , o a t s, s or gh u m,
w he a t and c e r e a l b le nd s ) ha s gr ad u al ly d e c r e a se d from 1 9 mi ll i on t on s in
200 2 t o o n ly 1 .5 mi ll io n in 20 13 .
Th an k s to t he e x te ns ive pr og r am me of r e f or ms i ni ti ate d by t he g ove r n me nt
in t he d e c a d e 20 04 -20 1 4, gr a i n pr od u c ti o n h a s r e c or d e d a ste a d y gr o w th
y e ar afte r y e ar , e na bli n g t he c o u n tr y to ac h ie ve t he s o-c alle d “G r ai n
Mir ac le ” ( Z ha ng , 20 13 ). T he pr od u c t io n has i n c r e ased fr om 4 69 m ill i o n
to n s i n 20 04 t o 607 mi ll i o n i n 20 14 f or a t o ta l i nc r e a se of 29 % .
Re c e n tl y , t he Na ti o na l d e ve l o pme n t pl a n f or t he pe r i od 2 01 1-2 01 5, t he
mo s t r e c e n t p la n (i s su e d in Mar c h 2 011 ) , ha s d e ve l o pe d p ol ic ie s t o b o o s t
d ome s tic c o n su m pt io n , im pr ove li vi n g sta nd a r d s, d e ve l o p we s te r n a nd
c e n tr al r e g i on s and p r o te c t t he e n vir o n me nt 3.
W it h r e gar d t o t he fo od i nd u str y , t he pl a n p oi nt s ou t F o od S afe t y a s a ma i n
c o nc e r n. W it h ma ny f o od sa fe ty sc a nd a ls i n the pa s t fe w y e ar s, t he
g ove r n me n t ha s i nc lu d e d po i nt s t o ad d r e s s t hi s i ssu e . T he f oc u s i s o n
im pr ov i ng it s a gr ic u l tu r a l p r od u c t i on a nd a ttr a c t i n g f or e i g n te c hn o l ogy .
3. Main Constraints
The sc a r c ity of na tu r a l r e so u r c e s (l a nd a nd w a te r ) a ffe c ts t he C hi ne s e
a gr ic u l tu r a l pr od u c ti vi ty . W it h r e ga r d t o w a te r , C hi na ha s t o d e al w it h
sc a r c ity a nd p ol lu ti o n i ss u e s . Ac c or d i ng t o A q u a s ta t (20 14 ) C h i na , ha s
r e ne wa ble i nte r na l fr e s h wa te r r e so u r c e s o f a b ou t 2, 00 0 c u bic me te r s pe r
c ap ita , a b ove t he U N d e fi ni ti o n of wa te r sc ar c i ty as 1, 00 0 c u b ic me te r s p e r
pe r s on . H owe ve r , C hi na ’ s wa te r r e s ou r c e s a r e n o t d i str i bu te d e q u a l ly : t h e
d r y n or t he r n a nd d e se r t we s te r n p r o vi nc e s r e c e ive on ly 20 % of t he
c ou n tr y ’ s r a i nfal l. I n ad d iti o n , d u e t o t he i ne v i ta ble (e ve n i f c o n tr ol le d )
p o pu la ti o n gr o wt h , t he c lim ate c ha n ge s, t he i nc r e asi n g u r ba ni z at io n a nd t he
ma ny ac t iv it ie s t hat ne e d the u se of w ate r r e s ou r c e s, pe r c a pi ta a va i la bi li t y
is c o n ti nu ou sly d e c r e a s i n g a nd d e m a nd f or wa t e r is ou t st r i p pi n g s u p p l y
(F i gu r e 16 ) . Agr ic u l tu r e a nd e ne r gy ( ma in ly c o a l i nd u s tr y ) ar e t he t w o
la r ge s t c o n su me r s of C hi na ’ s fr e s h wa te r r e se r v e s (Fi gu r e 1 7) , ac c ou n ti n g
for ne a r ly 9 0% of a ll th e w a te r u se d i n C h i na ). A gr ic u lt u r e a nd c o a l
ind u s tr y a r e c o nc e n tr a t e d i n C h i na ’ s n or t h, t he a ver a ge wa te r pe r c a pi ta i s
o nly ar ou nd 2 00 c u b ic me te r s . The r e f or e , al t h o u g h 4/ 5 of t he c ou nt r y ' s
wa te r r e s ou r c e s a r e l oc a te d i n the S ou t h of th e c ou nt r y , 2/ 3 of t h e
c u lt iva te d la nd a r e i n t h e ar id N or t h (H a njir a e t A ll 20 08 ). T o s o lve t hi s
pr o ble m, s in c e 20 02 C hi na ha s be e n w or k i ng o n a me ga - pr o je c t t o br i n g
wa te r fr o m t he m oi s tu r e -r ic h so u t h t o t he a r id n or th . Ne ve r t he le s s, si m p ly
su p ply i n g m or e w a te r wi ll n o t s olv e th e u nd e r ly i n g pr o ble m of i ne ff ic ie n t
wa te r u se a nd gr o wi n g d e ma nd . I n 20 10, C hi na ’ s C o m mu ni st P ar ty Ce n tr al
C o mm it te e a nd S ta te C ou nc i l p r o mu lga te d a “ th r e e r ed li ne s ” ( sa nt ia o
h o ngx i a n ) pol ic y in te nd e d t o e s ta bl is h c le ar and bi nd i ng l im it s o n
wa te r q u a n ti ty u sa ge , e ffic ie nc y , a nd q u a li ty . I n ea r ly 20 12 , t he S ta t e
C ou nc il a nn ou nc e d t ha t t he “ t hr e e r e d l i ne s ” p o lic y w ou ld li mi t t ot al
na ti o na l w a te r c on su m pt io n t o le s s t ha n 7 00 bi ll i o n c u bic me te r s pe r y e a r ,
a m ou nt i ng to a p pr o xi ma te ly t hr e e -q u a r te r s of C hi na ’ s t o ta l a n nu a l
3 The plan identifies seven strategic industries which are expected to benefit from special incentives and funding:
• Energy conservation and environmental protection
• Next generation
• •Biotechnology
• •High-end equipment manufacturing
• •New energy
• •New materials
• •Clean energy vehicles
18e xp l oi ta ble fr e s h wa te r r e s ou r c e s. I n ad d i ti o n, the po lic y a tte m p ts to
inc r e a se ir r iga t io n u se e f fic ie nc y . T he se he a d li ne p ol ic ie s ar e au g me nte d b y
inc r e a se d i nve s tme n t, i n c lu d i n g 1 .8 tr ill i o n R M B i n 20 11- 20 15 , pr i mar i ly
for ir r i ga t i on i n fr a str u c t u r e im pr ove me nt s , r u r a l c le a n wa te r d e live r y , a nd
r e se r v o ir e n ha nc e me n t s (M or e , 201 3) . T he P e o p le ’ s R e pu b lic of C hi na ’ s
(P R C ) 12 t h F i ve - Ye a r P l a n ( 201 1- 201 5) f oc u se s o n wa te r c on se r va ti o n a nd
e nv ir o nme n tal pr ote c ti o n as nat i o nal pr i or i tie s. C hi n a’ s le ad e r s hi p
a c kn o w le d ge s i n t h is p la n th a t t he r e is mu c h t o be d o ne t o li mi t p ol lu t i o n
a nd se c u r e a d e q u a te su p pl ie s o f e ne r gy a nd wa te r for gr o wi n g n or t he r n a nd
we ste r n c it ie s. P RC ’s ma j or c it ie s , f or e xa mp le , a r e r e tr of it ti n g t he ir se wag e
tr e a tme n t sy s te ms t o r e c y c le wa ste wa te r f or u se i n w as h in g c lo t he s ,
flu sh i ng t oi le t s , a nd o t h e r gr e y - wa te r a p p lic a ti o n s. Ma jo r i nd u str ial p la nt s
a r e r e q u ir e d by t he W a t e r L a w o f t he P e o p le ’ s Re pu blic of C hi na , i ni t ia lly
e nac te d i n 19 88 and u pd ate d in 20 02 , to s h o w t he r e i s ad e q u ate wa te r i n t h e
r e gi o n t o su p ply ne w fa c t or ie s be f or e t he y a r e a ll o we d t o bu i ld (C ir c le of
blu e , 201 3) .
Fi gur e 16 T ot al r e new a bl e w ater r es our c es p er ca p it a
S o urc e: A uth o rs ’ el ab orat i o n o n A q uas tat d ata , 20 14
Fi gur e 17 Wat er us e
S o urc e: A uth o rs ’ el ab orat i o n o n C h i n es e S tat i stic a l y ea rb oo k , 2 014
So il p ol lu ti o n i s a no t he r im p or ta n t i s su e a nd a p o s si ble c on s tr a in t f or
a gr ic u l tu r e a nd fo od su p ply .
Ac c or d i n g t o a s tu d y o n s oil po llu ti o n c o m mi ss i o ne d i n 20 06 by th e
g ove r n me n t , i nd u s tr ia l a nd u r ba n e ffl u e nt and w as te a s we l l a s t he ma ss i ve
u se of fe r til i ze r s and pe s tic id e s ha ve affe c te d a bo u t o ne -f if th o f
a gr ic u l tu r a l la nd i n t he c ou nt r y a nd ha ve c a u se d a l o ss o f a b ou t 1 0 bi ll io n
kg/ y e ar of c r o p ( Cu i a n d Ka ttu mu r i, 2 01 1) . T hi s l o ss be c a me e ve n m or e
im p or t a nt r e me m be r i n g t ha t a r a b le l a nd i s s te a d y d e c r e as in g c o m par e d t o a
gr o wi ng p o pu la ti o n.
19C li ma te c ha n ge c a n a l s o p la y a c r u c ia l r ole i n d e ter m i ni n g th e c ou nt r y 's
a bi li ty t o ma i n ta i n the vi a bi li ty of p r od u c t i on . T h e fr e q u e nc y and in te n si t y
of a d ve r se we a the r e ve n t s, su c h a s d r ou g h ts i n t h e N or t h a nd N or th e a s t o f
th e c ou ntr y a nd fl o od s a lo n g the Ya ng t ze R ive r , ha ve i nc r e a se d in t he las t
fif ty y e a r s a s we ll a s t he r e le n tle s s a d v a nc e o f t he d e se r t ific a ti o n t h at
wa ste s e ve r y y e a r a b ou t 666 ,7 00 he c ta r e s , of w hi c h a b ou t 200 ,0 00 he c ta r e s
of a r a ble la nd (C u i a nd Ka tt u mu r i 201 1) .
Fi gur e 18 P op ul at i on w it h ac ces s t o s a fe dr i nk in g- w a ter
S o urc e: A uth o rs ’ el ab orat i o n o n A q uas tat d ata , 20 14
A wa r e o f t he se c o n str a i nt s , C h i na , si nc e t he fi r s t d e c ad e of t he 2 000 s , h as
pr og r e s s ive ly tr ie d a ne w a nd a lte r n a t ive wa y t o make a se c u r e so u r c e of
su p ply by r e so r t in g to fo r e ig n d i r e c t in ve st me nt ( FD I) a ime d a t a gr ic u l tu r e
(Sm a ll e r , Ya la n a nd We , 201 2) . Si nc e 2 00 1, the F DI f l o w i n a gr ic u l tu r e h a s
gr ad u a lly inc r e a se d t o r e ac h 5 b il li o n i n 2 012 . Si nc e 200 7 f or e i g n
in ve s t me nt i n the pr i m a r y se c t or t o ok t he f or m of the so -c a l le d “la n d
gr a b bi n g” : an ac q u i si ti o n ( w he t he r by p u r c ha se or r e n tal ) o f lar ge - sc al e
la nd f or fa r mi n g, c o nd u c te d by pu blic a c to r s ( st a te s ) o r p r iv a te
(c or po r a t i on s ) t ha t ha s a n a ve r a ge d u r a ti o n of 30 t o 99 y e a r s ( Z oli n a nd
L u z i, 20 13 ).
C o n sid e r i ng C h in a a s a n i nve s t or c o u n tr y , i n th e li s t of f a v or i te t a r g e t
a r e a s , A s ia oc c u pie s t he fir st pla c e (5 7. 6 % o f t he to ta l he c ta r e s ), f o ll o we d
by L a ti n A me r ic a ( 28 .6 % of t he t o ta l h e c ta r e s ) a nd Afr ic a (1 3. 6% o f t he
to ta l he c t a r e s) . The d e a l gi ve s t he i nve st or n o t o nly t he r ig h t to c u l ti va te
th e la nd , bu t a ls o giv e s t he a c c e s s t o na tu r a l r e s ou rc e s , w ate r and mi ne r al s.
E st a b li s hi n g t he pr e c i se nu m be r of t he a gr e e m e n ts si g ne d i s n o t s im p l e .
Ac c or d i n g t o L a nd Ma tr ix 4, a n ac t iv is t g r o u p t ha t c o lle c t s d at a a b ou t t h e
a gr e e me nt s i nv o lvi n g a gr ic u lt u r a l la nd , to ta l C h ine se l a nd i nve st me nt
a m ou nte d t o m or e t ha n 1,2 06 t ho u s a nd he c ta r e s (34 % of t he t o ta l he c ta r e s
a r e d o me st ic i nve s tme n t s) w it h 65 a gr e e me nt s s ig ne d fr o m 2 001 t o 2 01 4
(Ta b le 6 ); 34 % o f t he he c tar e s c o nc e r n s nat i on al b or d e r s.
The se c o n tr ac t s, o fte n , ar e ne g o tia te d w it h l oc a l g o ve r nme n t s f or t he u se
of la nd u nd e r c o nc e s si o n f or a l e n g t h of ti me , f ol l owe d by the d e pl oy me nt
of o ne or m or e pr od u c ti o n si te s . By t he C hi ne se side t ha t sh ou ld e n su r e a
tr a n sfe r o f te c h nic a l k n o wle d ge , w it h be n e fi t f or loc a l pe o p le (e s pe c ia lly i n
th e p o or e s t c ou ntr ie s) , h a vi n g t he a b il ity t o e x p o rt “ s tr a te g ic ” a gr ic u ltu r a l
pr od u c ts t o C h in a a t fa v or a ble p r ic e s. A lt h ou g h in t he or y t he l oc a l pe o p l e
s ho u ld b e ne fi t fr om t h is C hi ne se p r e se nc e , t h e r e have be e n nu me r ou s
pr ot e s t s: C hi ne se c om pa nie s a r e i n fa c t a c c u se d of a p pr o pr ia ti n g t he la n d
of t he po or l oc a l fa r me r s w ho o nc e d is p o s se s se d of t he ir be l on gi n g s wo u ld
4 Activist group that collects data about the agreements involving agricultural land.
20n ot ha ve t he c ha nc e t o be t ake n ove r i n t he n e w C hi ne se fa c t or ie s t h a t
w ou ld e m pl oy o n ly C hi ne se l ab or .
Tabl e 6 C hi na’s l and i n ves t me nts
Investment Average size
Number of
Target on land in ha of Intention of
contracts
countries (contracts investments investments
signed
signed only) (in ha)
Asia 43 695.089 16.165
Non food
agricultural
commodities (11),
Cambodia 19 192.706 10.142 Food crops (3), Agri
unspecified (3),
Wood and fibre (1),
Tourism (1)
Food crops (7),
China 8 414.054 51.757
other (1)
Non food
agricultural
Laos 15 48.329 3.222 commodities (12),
Industry (2), Wood
and fibre (1)
Philippines 1 40.000 40.000 Biofuels
Africa 18 163.704 9.095
Angola 3 21.500 7.167 Food crops (3)
Benin 2 4.800 2.400 Biofuels, food crops
Cameron 1 10.120 10.120 Food crops
Congo 1 100.000 100.000 Biofuels
Nigeria 2 5.300 2.650 Food crops
Sierra
4 6.820 1.705 Food crops (4)
Leone
Sudan 1 10.000 10.000 Biofuels, food crops
Uganda 2 4.540 2.270 Food crops (2)
Food crops,
Tanzania 2 624 312 biofuels, wood and
fibre
Europe 1 2.000 2.000
Bulgaria 1 2.000 2.000 Food crops
South
3 345.400 115.133
America
Argentina 2 333.000 166.500 Food crops
Bolivia 1 12.400 12.400 Food crops
Total 65 1.206.193 5.123 --
S o urc e: E lab o rati o n o n L a n d Ma tr ix data , 201 5
The “ Ch i ne se c o l o ni za t io n ” i n vo lve s n ot o n ly t he la nd , bu t a l s o th e
a c q u i si ti o n of gr e a t f or e i g n a gr i bu si ne s s e mp ir e s: th e so -c a l le d d r a g o n- he a d
e n te r pr i se s, ( , l ó n g t ó u q ǐ y è ) ar e i n fac t e nc ou r a ge d t o e x pa nd i ts
gl o bal pr e se n c e th r o u g h ac q u i si ti o n s of c o m pa nie s in ke y ar e a s o f the w or l d
21fo od i nd u s tr y , t hu s c h a l le n gi n g he ge m o ny of t h e gr e a t A me r i c a n gr ou p s
su c h a s C a r g il l, M o n sa nt o a nd A DM .
4. C on cl u di ng r em ar ks
C h in a i s t he w or ld ’s la r g e st c o n su m e r ma r ke t fo r food a nd be ve r a ge s. Du e
to th e e c o n om ic gr o wt h ba se d on i nd u s tr i a li z a ti o n , t he im p or ta nc e o f
a gr ic u l tu r e d e c li ne d ove r ti me wi t h m ou nt i ng p ol lu t i o n c o nc e r ns f or l a nd
a nd wa te r . Gi ve n t he p he n ome n o n of gr ow i ng u r b a ni z at i on , t he pr e s su r e o n
fo od d e m a nd f or a r is i n g p o pu la t i on a s we l l a s c ha n gi n g d ie t s , C hi na ha s
ha d t o r e s or t to im p or t s , be c o mi n g a ne t i mp or t e r of f o od . If t he r a te o f
inc r e a se t e nd s t o d e c r e a se a s i nc ome g oe s u p , n ot so the f o od e x pe nd i tu r e
in v a lu e t ha t , i n t he pe r iod 2 00 0-2 01 0, fr o m 2 t h ou sa nd y e n pe r c a p ita i n
200 0, ar r ive d t o a lm o st 5 t ho u sa nd i n 2 01 0 for u r ba n c o nsu me r s . C hi ne se
fo od i nd u st r y is pr ofi t in g fr om t h is d e v e l o pme n t , bu t C hi na i s t hu s fac i n g
pr o ble ms r e la te d b o th t o fo od se c u r ity a nd to f oo d sa fe ty .
A s far a s f o od se c u r i t y is c o nc e r ne d , t he hu ge s t ad va nc e s i n C hi na ’ s
pr od u c tiv i ty be ga n w h e n t he g ove r n me nt be ga n t o fr ee f ar m s fr o m
a gr ic u l tu r a l c o mm u n e s a nd a l l o we d t he m t o pa r tia lly pr i va t i ze t he ir
a gr ic u l tu r a l pr od u c t i on u nd e r t he h ou se h o ld r e s po n si b il ity sy s te m . T h i s
r e su l t i s a l so d u e t o a n, (o fte n ) e xc e ss ive , a p pl ica ti o n of fe r ti li ze r t ha t
p ol lu te d la nd a nd gr ou nd wa te r wi th n itr ate s a nd c ause d to xic “r e d tid e s” o f
a lga l b l o om s a nd e u tr o p hic a t io n of la ke s a nd r i ve r s . C hi na i s one of th e
e ar lie s t c ou n tr ie s to u s e pe s ti c id e s ( We nJu n Z ha n g e t al , 20 11 ) a nd if
th r o u g h ou t C h i na pe s tic i d e s ha ve ki lle d t he n a tu r a l e ne mie s of c r o p pe s ts ,
o n t he o th e r ha nd , t he y h a ve p o is o ne d far me r s and co n su me r s. M or e o ve r ,
C h ine se a gr ic u l tu r a l pr od u c ti vi ty i s a f fe c te d b y t he s c ar c i ty of na tu r al
r e s ou r c e s (l a nd a nd wa t e r ). T o c ou nte r a c t t he l a nd li mi ta ti o n , C h i na ha s
pr og r e s s ive ly tr ie d a ne w a nd a lte r n a t ive wa y t o make a se c u r e so u r c e of
su p ply by r e s or ti n g t o f o r e ig n d ir e c t i nve s tme n t ( FD I) a i me d a t a gr ic u l tu r e ,
c alle d u su a lly la nd gr a b bi n g. A si a a t t he fir st pla c e ( 57 .6 % of t he to t a l
he c ta r e s) , f ol l ow e d by L a ti n Ame r ic a (2 8. 6% o f t he t o ta l he c ta r e s ) a n d
Afr ic a (1 3. 6 % of t he to tal he c t ar e s ) ar e t he fa vor ite ta r ge t of t hi s ne w
p ol ic y : t he ac q u is it i on , in f ac t , no t o nly gi ve s th e i nve s to r t he r i g h t t o
c u lt iva te t he la nd , bu t al s o gi ve s the ac c e s s t o n a tu r a l r e s ou r c e s , wa te r a n d
mi ne r a ls .
C li ma te c ha n ge c a n a l s o p la y a c r u c ia l r ole i n d e ter m i ni n g th e c ou nt r y 's
a bi li ty t o m a i nt a i n .
I n t hi s Re vie w , we i d e n tif ie d im p or ta n t fa c to r s li mi ti n g agr ic u l tu r al
pr od u c ti o n i n C h i na , i n c lu d i n g c on ve r si o n of a gr ic u lt u r a l la nd to o t he r
u se s, fre s h wa te r d e fic i t s , and so il q u a li ty i ss u e s. Ad d i ti o na l ly , inc r e a se d
d e ma nd f or s o me a gr ic u ltu r al pr od u c t s is e xa mi ne d , pa r tic u la r ly t h o s e
ne e d e d t o s a t is fy t he i nc r e a se d c on su m pt i on o f a ni ma l pr od u c ts i n th e
C h ine se d ie t, w hic h t hr e a te ns to d r ive pr od u c t i o n t o wa r d s c r o p s u se d a s
a ni ma l fe e d . M a j or s ou r c e s of f o od p oi s o ni n g i n C h in a i nc l u d e pat h o ge n ic
mic r o or ga ni sm s , t o xic a ni mal s a nd p la nt s e n te r in g t he f o od s u p p ly , a n d
c he mic a l c o n tam i nat i o n. Me an w h ile , t w o gr o wi n g fo od s afe ty i s su e s a r e
ille ga l a d d i tive s a nd c o n ta m i na ti o n o f t he f o od su p ply by t o xic i nd u s tr i a l
wa ste . C hi na ’s c o nne c t i o ns to g l o ba l a g r ic u ltu r a l ma r ke t s a r e a ls o h a vi n g
im p or t a nt e f fe c t s o n f o od su p p ly a nd fo od s a fe ty wi t hi n the c ou n tr y .
Al t h ou g h t he C h ine se Go ve r nm e n t h as s ho w n d e te r mi n at io n to r e f or m
la w s , e sta b li s h m o ni t or i n g sy s te m s , a nd s tr e n gt he n f o od s a fe ty r e g u la ti o n ,
we a k l in k s i n im ple me n ta ti o n r e ma i n .
A s a gl o ba l p r o b le m , f o od s afe ty s ig ni fic a n tly a ffe c t s t he pu bl ic he al t h in
b ot h d e ve l o pe d a nd d e ve lo p in g c ou n tr ie s, e s pe c ia lly i n c ou n tr ie s wi t h lar g e
p o pu la ti o n s, e .g . C hi na . A 20 11 su r ve y ( So n g e t al 201 3, Z ha n g e t al 2 01 1)
r e p or te d th a t f ood s a fe t y wa s t he m os t c o nc e r ne d is su e i n C h i ne se pe o p l e ,
su r pa s si ng pu b lic se c u r ity , tr a ff ic sa fe ty , m e d ic a l sa fe ty , e tc . F o od
c o nt am in at i on c a n oc c u r by ma ny har mfu l fac t or s at a ny ste p i n t he pr oc e s s
fr o m fa r m t o ta ble . I n C h i na , t he ma jo r ha r mfu l fa c t or s i nc l u d e t o xic
22a ni ma ls a nd p la nt s ( e .g . pu ffe r fi s h a nd to a d s t o ol ), pa t h oge n ic
mic r o or ga ni sm s (e .g . S al mo n el la a nd V i br io P arah aem o lytic u s) , a nd c he mic a l
c o nt am in at i on ( e . g. pe s ti c id e a nd ve te r i nar y d r u g re sid u e s ). F or e xa m ple , o f
174 f o od safe ty i nc id e n t s r e po r te d in 201 2 i n C hi na , m o s t we r e c au se d by
to xic a n ima ls or pla n ts (41 .4 % ), f ol lo we d by pa t ho ge nic mic r o or ga ni s ms
(32 .8 % ), a nd c he m ic a l c o nt a m in a t io n (12 .1 % ). I n a d di ti o n, wi t h t he r a p id
ind u s tr i a li za t io n i n C h i n a , t he u se o f il le g a l a d d iti ve s a nd t ox ic i nd u str i a l
wa ste i n f o od pr oc e s si n g i s a gr o wi n g f o od sa f e ty pr o ble m. (S o n g e t a l
201 3) .
Re s ou r c e fu l ne s s, te c h n o lo gy , r e se a r c h , m od e r ni za ti o n, a nd su s ta i na bil it y
a r e a ll f a c t or s o n w h ic h C h in a c a n a nd s h ou ld im pr ove , a s t he se fa c t or s w il l
ha ve a ke y r ole i n d e te r m in i ng t he a bi li ty of C h in a and of t he W or ld to fe e d
wi t h sa fe fo od t he ir r e s pe c t ive p op u la ti o n i n the fu tu re . Im pr o ve d
e ffic ie nc y a nd pr od u c ti vi ty , r e f or m of la nd u se r i ght s , bu t a l so t he p olic y o f
“g o in g ou t ” or l and gr a b bi n g ar e s o me of t he p lau s i ble s tr a te g ie s t ha t t he
c ou n tr y c ou ld i mp r o ve o n t o a v o id an i ne x or a ble sta bi li za t io n or , a t w or s t ,
a d e c li ne i n d o me s tic pr od u c ti o n, a s we ll ta k in g int o a c c ou nt t he i m pa c t of
c lim ate c h an ge o n a gr ic u ltu r al c o mm od i t ie s .
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in d u st ry , a v ai la ble at h t tp :/ / w w w.a n z bu si n e s s.c o m/ c o n te nt/ d am/ a n z-
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e d it io n , P ar i s, Ar ma nd C ol i n.
Br ow n L . R 19 95 . W h o wi ll fe e d C h i na ? A wa ke u p c a l l f or a s ma l l pla n e t ,
th e W or ld wa tc h E nv ir o n me n ta l Ale r t Se r ie s, Ne w Y or k, N or to n & C o.
C he n Xi we n 200 6. C o nf lic ts a nd P r o ble m s F a c i n g C hi na ’ s C u r r e n t Ru r a l
Re f or m a nd De ve l o p me n t, C ha p te r 4 i n D o n g, S o n g, a nd Z ha ng e d s. C h i na ’s
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C ir c le of Blu e 2 013 . S c o pi ng Wat er a nd E ne rgy P o l l uti o n N ex us i n U r um q i a nd
Qi ngd a o f or Pr epa ri ng PR C’ s M i ni str y o f E nv ir o nm e nta l Pr ot ec t io n Co- C o ntr o l
Pr og ra m , a vai la ble at ht t p:/ / w w w .c ir c le of bl u e . or g/ wa t e r n e w s/ w p-
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C u i S ., Ka tt u mu r i R . 2 011 . C u ltiv a ted L a nd C o nv er si o n i n C h i na a nd th e
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C e n tr e , L o nd o n S c h o ol of Ec o n o mic s & P ol i tic a l, a vai la ble at
ht t p :/ / w w w .l se .a c .u k/ a si a Re se a r c hC e nt r e / _ fi le s/ ARC WP 3 5-
C u i Ka ttu mu r i. pd f ( 2/ 11/ 201 4)
Du P o nt 20 13 . Ch i na ’s I n sa ti a b l e Ap p et ite f o r Ch a n g e, F or tu ne G lo b al F or u m,
6-8 Ju ne 20 13 , Che ngd u , C hi na , a vai la ble at
ht t p :/ / w w w 2.d u p o n t.c o m/ Me d ia _ C e n te r / e n_ U S / a s se t s/ d o w nl oad s/ pd f/ Du
P o n t_ W hi te _ P a pe r _ F o od _ Se c u r i ty _ C hi na . pd f (1 4 / 7/ 20 14 )
Eu r o m on i tor I nte r n a t io na l 2 01 4. Ch in a i n 2 03 0: Th e F ut ur e D e mo gra p h ic,
a vai la ble at ht t p: / / w w w.e u r o m o ni t or .c o m / c hi na -i n- 20 30- t he - fu tu r e -
d e mo gr a p h ic / r e p or t
23Eu r o pe a n C o mm is si o n 2 012 . E U - Ch i n a Ge og ra ph ic al I ndic a ti o ns – " 1 0 pl u s 1 0"
pr oj ec t i s n ow c omp l ete , a va ila ble a t h tt p :/ / e u r o pa .e u / r ap id / pr e ss -r e le a se _ IP -
12- 129 7_ e n. h tm ?l oc ale = e n
Eu r o pe a n C o mm i ss i on 201 3. G e og ra ph ic a l- i nd ic a ti o n s, a vai la ble at
ht t p :/ / e c .e u r o pa .e u / tr a d e / p ol ic y / a c c e ss i ng -m a r k e ts/ i nte lle c tu a l-
pr o pe r ty / ge o gr a p hic a l- i n d ic a t i on s/
EU S M E C e n tr e 2 01 5. T h e f o od a nd b ev era g e mar ke t i n Ch i na , a vai la ble at
ht t p :/ / w w w .e u sme c e n tr e .o r g .c n/ r e p or t/ fo od - be v e r a ge - mar ke t -c hi na
F AO 20 13 , 20 00 W o rld Ce n s us of Ag ric u lt ur e : A na l y s is a nd i nt er na t i o na l
c omp ar is o n of th e r es u lt s 19 96- 2 005 , a va ila b le at
ht t p :/ / w w w .fa o .o r g/ f ile a d mi n/ te m p la te s/ e s s/ e s s _ te s t_ f o ld e r / W or ld _ C e n s
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F AO ST A T 2 01 5. Agr i- env ir o n me nt al i ndic ato rs a vai la ble at
ht t p :/ / fa o sta t3 .fa o . or g/ d o w nl oa d / E/ */ E
Gu a ng Y. 201 1. Ch i n a Co rp or ate Ne w s: Y um' s L ittl e S h ee p Ta ke ov er Rev ie w
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is s ue s i n Ch i n a. Ir a n J P u b lic He al t h.
L a nd ma tr i x, a va ila b le a t h tt p :/ / ww w .l and ma tr i x. or g/ e n/
Mi ni s tr y of L a nd a nd R e s ou r c e s o f t he P e o ple ’s Re pu bl ic of C hi na 2 01 5.
S om e fac t s ab o ut th e la nd a nd re s o urc e s i n Ch i na a va il abl e a t: w w w. ml r . g ov .c n
M or e S. 201 3. I s s ue B ri ef : W a te r R es o u rc e I s s ue s, P ol ic y a nd P o lit ic s i n Ch i na ,
a vai la ble a t h tt p :/ / w w w. br o ok i ng s .e d u / r e se ar c h/ pa pe r s/ 2 013/ 02/ wa te r -
p ol it ic s -c hi na -m o or e
Ni H . 20 13 . A na li si d el le pol itic h e d i s up p ort o a l l ’a g ric olt u ra c i n es e, Re p or t N o.
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E N. pd f (2 2/ 7/ 201 4 )
P ar k A. , 2 00 9, Ag ric ul tu ral D ev el op me n t i n Ch in a: L e ss o n s f o r E th i opi a ,
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