Watch Out for the 12th Five-Year Plan

The Rizhao City harbor district's layout of industry zones

In some ways, China is one of the most market-driven economies ever seen. Yet the Communist Party retains the concept of the "five-year" plan that came out of the Stalin-era Soviet Union and was widely adopted in mid-20th century by developing countries. Almost everyone else has abandoned five-year plans but China is about to roll out its 12th five-year plan.

In the 12th five-year plan China plans to upgrade its industry structure to include more high-tech, large-scale industry in place of the low-end small-scale manufacturers that have driven the economy over the past few decades. Official strategies for accomplishing this include developing comprehensive regional plans that will concentrate industry clusters in "advantaged" regions that take advantage of local resource availabilities and strong companies. Investment comes from foreign and domestic investors as well as publicly-funded projects.

Consider the new plan being implemented by Rizhao, a medium-sized port city in southern Shandong Province that you have probably never heard of (its name means "sunshine"). The city has a plan for its harbor district called "One District, Four Zones" that carves up the district into four industry zones: high-tech industry, automotive industry, photoelectric equipment, and logistics. The district map has been carved up into regions for each zone and sprawling industrial parks, roads, factories, housing complexes, and warehouses are being constructed at a furious pace.

This is the lowest level of a hierarchy of plans. The province has a "blue economy" plan for the Shandong Peninsula, and there is a "Southern Shandong Coastal Industry Plan." Local officials recently gave speeches urging everyone to grasp the importance of the plan and they have set targets for construction and production value from each zone to be achieved during the 12th five-year plan.

The magic words for the new plan are "high-tech," "innovation," and "ecological." Each zone has several companies to serve as the "dragon head" to pull along development of an industry cluster. The high-tech zone includes automobile manufacturing based around the provincial automobile manufacturing company, a "micro car" project, and car parts industries. Another industry focus is manufacture of photoelectric parts like LED, LCD, LVD, and solar-powered photovoltaic cells, intelligent systems, and software. A third industry cluster is based on several pharmaceutical companies and biological industries, including ocean-related products. There will be a provincial-level technology innovation demonstration center.

Celebrating the Shandong "micro car" project

There is also a network of logistics zones devoted to various industries. This includes port services, steel products logistics (associated with East China Steel Co.), and a city outskirts agricultural logistics zone that features transportation, storage and processing of apples and peanuts.

There is also a big furniture mall in the works.

The plan has already been in action since 2009. Eight factories, an apartment building and dining hall have been completed and a big area has been developed. There is a target for the district to produce value of 100 billion yuan during the five-year period.

Rizhao's plan is representative of how the Chinese economy operates--massive construction of production capacity, all carefully planned by officials. Build it now and find a market for the products later. And there are probably dozens if not hundreds of other cities hatching similar plans. Soon there will be hundreds of new "high-tech innovation parks" with factories producing medicine, auto parts, and solar panels. How will all these factories sell their products? Most of them will operate at 20%-to-30% of capacity. Exporting to the United States is always a good backup plan...

Some of the rhetoric being thrown around in the trade debate argues that China doesn't compete with the United States because it exports things that the United States doesn't produce any more. Yes, China produces things like shoes, socks, toys, and t-shirts, but it also is making more pills, pistons, and pear juice that directly compete with U.S. products. Free trade is great, but I'm not sure this is what Adam Smith had in mind.

Conservation tillage

Conservation tillage is one of the new techniques Chinese agricultural officials are encouraging farmers to use in order control soil erosion and improve productivity.

In September, the Agricultural Machinery Department of Donggang District (Rizhao in eastern Shandong) held a conservation tillage meeting at Xihu Town’s Dahuaya Village to promote fall conservation tillage in the district. Donggang District began disseminating conservation tillage techniques in 2007 and after three years there are 5000 mu of model farms that influence the surrounding 20,000 mu.


Demonstrating conservation tillage

Techniques include no-till and minimum-tillage, utilizing organic matter from stalks, leaving corn stubble residue as a ground cover, mechanical sub-soiling, and pest control methods. By reducing the amount of ploughing and leaving residue on the surface, wind and water erosion is reduced and more moisture is retained in the soil. This helps crops during times of drought.

According to the article, it is expected that this year yields will increase this year by 30 kg per mu through conservation tillage measures. This year it is planned to increase the area by 3000 mu, radiating out to 5000 mu or so. By using conservation tillage, farmers can increase income and save expenditures totaling 600,000 yuan or more.

Peasants Make Way for Water Diversion

China is constructing a massive South-to-North water diversion project, a system of reservoirs and canals that will divert water from central China to the parched northern provinces. The official web site for the project is here.

Since there are people living just about everywhere in China, the hardest part about these projects is moving people who are in the way and finding another place to put them. The project will begin in northern Hubei and southern Henan where some 300,000 people will be moved and resettled. This is the second-largest resettlement after the Three Gorges dam. The dam required moving over 1 million people over 14 years. This time they will move fewer people, but in a shorter time period.


Above is a map of the middle route of the water diversion project begins in Hubei's Danjiangkou City, then passes through Henan and Hebei provinces to reach Beijing and Tianjin

Officials in Hubei and Henan Provinces have been hard at work making preparations to move the first batch of resettled families this month. A long article from the Guangzhou Daily describes how the first group from Danjiangkou were loaded on to a convoy of trucks and driven 5 hours west to the Xiangbei farm, a district near Xiangfan City in northwestern Hubei. This appears to be a state farm on reclaimed land. Families were dropped off at newly built houses with a vegetable patch. They are allocated about 1 mu of farmland per person. In Xiangbei the officials leveled and reclaimed land, dug canals, built roads and other infrastructure for the migrants. Teams 2, 3, and 4 of the Xiangbei farm invested over 30 million yuan in construction and added 277 mu of farmland for the 1077 households who were to be resettled there.

In the Qujialing management district of Jingmen, further to the south in Hubei, 1200 residents were resettled on 1800 mu at 5 different places. The allocation was 6 mu for a family of 4, plus a 0.2-mu vegetable plot.

One prospective migrant displaced by the Danjiangkou reservoir posted on an electronic bulletin board: "Can any friends from Xiangbei Farm tell me about the place? Does it have water?" [I assume he's not being ironic in asking this!]
A response came from a friendly netizen: "The area around Xiangbei generally doesn't lack water. There are just a few places where you can't grow rice."

It seems that many of the resettled migrants saw the place and kept going or never showed up. They stayed behind in their native city and found other work.
The prospective migrant's next question was: "How far is it to the city?"


Prospective migrants and officials measure land to be assigned to resettled farmers in Hubei

Families are also being resettled in Henan Province. A production cost report from Nanyang reported a 12-percent increase in land costs this year for wheat production. One of the reasons given was that land was distributed to resettled families from the water diversion project, reducing each family's allocation. This increased the demand for rented land. A large decline in labor cost was also reported, due to an increase in the number of laborers and lower wages in the area.

China's farm subsidy panacea

Chinese officials see subsidies as the magic cure for all problems in agriculture. Virtually all reports by government analysts conclude with a section that usually recommends more or better subsidies. Another common theme in news media and government reports is that subsidies give American farmers their advantage, so Chinese farmers need to have subsidies too.

China introduced direct farm subsidies and price supports in 2004, and since then they have multiplied in the number of subsidies offered and the amount of money. China's subsidies are now comparable to those of the United States in total spending and dollars per acre.

The subsidies are basically trying to counteract market forces by paying farmers to plant grain crops that produce little income. This is becoming more difficult as the markets for land, labor, and credit improve. Labor markets for rural people are well-established and wages are rising. Even land markets are developing, despite the lack of land ownership and weak property rights. The rental market for farmland is establishing rents for different types of rural land and they are also rising. As farmers learn the opportunity cost of their labor and land, they are less inclined to plant grain.

The government, therefore, has had to offer more and more subsidies and keep raising grain prices to entice farmers to plant grain.

Cost of production survey reports are picking up an interesting theme of rising land costs linked to increasing subsidies and rising grain prices. A detailed treatment of estimating the land component of farm production costs in Jiangsu Province in 2005 noted that the reduction of agricultural taxes and rising grain prices had led to rising land rental rates. The study also reported that land rental rates differed depending on the use of the land. Grain land had rented for 150 yuan three years earlier, but rent had risen to 300 yuan in 2005. Land for flowers or fruit trees commanded higher rent. The report said that 1000 mu had been leased to a Hong Kong company to grow vegetables at 300 yuan per mu. Land with greenhouses rented for 580 yuan.

These rents are the equivalent of $130 to $260 per acre, far higher than the average rent for U.S. cropland, currently about $90 per acre.

Rents are also high in more remote agricultural areas of China. In Nanyang, Henan Province, the average rent for wheat land is reported to be 106 yuan/mu in 2010--about $95 per acre--and up 12% from last year. In Songzi, southwestern Hubei Province, rice land cost is estimated at 90.8 yuan/mu, up 6.8% from the previous year.

Subsidies started out with a payment of 10 yuan per mu in 2004. Since then, they have risen to about 80 yuan per mu for wheat land in Henan.

A number of reports point out that, even with the subsidies, land planted in grain earns much less than if it's planted in vegetables or other crops. In Chibi City there is consternation that many farmers take the subsidy funds, then rent the land to someone else to grow vegetables or leave it abandoned to work off-farm. This phenomenon is common, and there are many suggestions to link subsidy payments to actual production or marketings of grain.

The Chibi report also notes that farmers can earn a comfortable living with a larger scale operation. Most farmers are allocated 3 to 10 mu of land, but the report points out that two people can easily farm 30 mu (less than 5 acres) and get an income of 12,000 to 15,000 yuan. This is hard to do, because land markets are still underdeveloped. The few who do farm 30 mu can't assemble a continguous piece of land and leases may be only year to year, so it's hard to exploit economies of size.

China's Would-Be Price Makers

Like other commodity prices, edible oil and oilseed prices are rising, and Chinese officials are getting worried.

An article from the Dongfang Daily newspaper reports that edible oil prices have been rising since this summer. Futures prices have reached their highest level since the 2008 financial crisis.

Upward pressure has been building this month after the National Day holiday. At a Shanghai wholesale market, the price of one type of soy oil went up from 164 yuan per box to 180 yuan this month, and Jinlongyu mixed oil went from 210 yuan to 225 yuan/box. The Shanghai grain and oil industry association secretary Zhao Zhiwei said Shanghai supermarket prices for 5-liter bottles of soy oil went up about 6 yuan this month.

Several factors contribute to rising edible oil prices: the rising cost of imported soybeans since July, buildup of inventories ahead of the peak season, and a general upward trend in commodity prices and inflationary expectations.

Against the background of rising oil prices, the government has announced that it will sell 300,000 mt of rapeseed oil from reserves on October 20th.

Mr. Zhao, the Shanghai grain and oil association secretary, thinks the government is paying a lot of attention to this. With state inventories plentiful now, the government will use measures to control the price.

According to reports, since 2008 Sinograin (the government's reserve management company) has accumulated about 2 mmt of edible oil in reserves, reported to be about 10% of world consumption. And they also have put 1 mmt of soybeans in reserve that they could sell into the market.

[In other words, part of the huge demand for oils and oilseeds in China over the past year reflected purchases that were stacked in warehouses, not consumed.]

Can the government stop prices from rising? Analysts quoted in the article say such reserve sales can even out short-term fluctuations in prices, but the government can't stop a long-term rising trend in prices since China is highly dependent on imported edible oils. Those prices are set in the international market and can't be controlled by Chinese officials.

As the rest of the world trades more with China, the view of price is becoming a major source of conflict. See the exchange rate conflict--an exchange rate is the price of a currency--Chinese officials don't think it should be allowed to fluctuate even when there is a massive increase in the supply of dollars that should drive its price down. Chinese officials have a similar view of ag commodity prices. Official policy documents explain that grain prices should rise in a steady, gradual manner year after year.

Who sets prices? Are they set by an impersonal "market" or by government officials?

What is the role of a price? Is it just an accounting convenience or is it a reflection of a commodity's scarcity?

Why do prices fluctuate? Is it because of changes in supply and demand, or manipulation by big companies and speculators?

Chinese officials, obsessed with control and organization, don't trust "the market." "The market" is chaotic and out of control--the antithesis to the Chinese Communist Party's approach--"the market" can't be trusted to set "reasonable" prices.

Prices are never right for Chinese officials. They are either too low for farmers to have strong incentives, or they are rising too fast and creating inflationary expectations.

Edible oil is a particularly vexing problem since China is heavily reliant on imports. As the rhetoric from Chinese officials lately has emphasized, they think world grain prices don't have much effect on the Chinese market since imports are such a small share of the market. The weak link is the edible oil sector where prices are set in world markets. If officials try to control grain prices, fluctuations in oil and oilseed prices create big distortions in relative prices.

In the hubris of the first half of the 20th century, "scientific" socialists thought they could use big mathematical models to plan the economy and make sure supply and demand were balanced. While China was busy with its political upheavals and studying engineering, the rest of the world discovered that socialism and price controls don't work (a lesson quickly forgotten). Now China and the rest of us will have to discover this all over again.

Grain Industry Anti-Foreign Rhetoric Heating Up

A steady stream of articles in the Chinese press warn about multinational companies taking over Chinese agricultural markets. Even a Chinese agricultural economics journal recently contained a lead article that was a tirade against the "ABCD" companies: ADM, Bunge, Cargill, and Louis Dreyfuss.

A long article from the National Enterprise magazine, "Multinational Grain Merchants Impact Business of State Enterprises," warns that increasing control by multinational companies threatens China's food security.

As usual, China's soybean industry is presented as victim no. 1. The author points out that China accounted for 91% of world soybean production in 1936, but today multinational companies control 80% of the soybean crushing capacity in China. Moreover, the article warns that multinational grain traders are spreading the scope of their operations to include upstream storage and grain processing, posing a threat to China's food security.

Against this background, says the author, China's medium- and small-scale enterprises are not strong enough to stand up to the multinationals. It's necessary to rely on large state-owned grain enterprises to stand against them and keep a tight grip on food security.

The article provides another heart-wrenching tale about soybean companies in Heilongjiang Province having to shut down because they can't compete with imported soybean crushers.

It is said that the multinationals use their advantage in purchasing soybeans to dominate the market, leaving China with no say over prices. The plight of domestic soybeans is called "an industry crisis."

Not all of these companies are actually U.S. companies, but the article quickly slips into anti-American mode. American soybeans are said to have an advantage because they are genetically modified. Large-scale farms, an integrated industry structure, and subsidies are blamed for giving American and South American soybeans a cost advantage.

The article warns that foreign companies are now infiltrating other industries, such as rice and flour milling. This has the government on the alert.

The article seethes over the gall of brazen Americans who opened a USDA trade office last month in Shenyang, an important city in China's northeastern grain belt. This is seen as a direct strike at China's national granary (the northeastern region).

The article says we should take warning from another example. The U.S. Pioneer Company introduced a new corn variety in 2005 that spread quickly in Jilin Province, where it already accounts for 10% of corn area. Pioneer's corn variety is superior in yield, it has lower moisture, sells well, stores better, and gets a higher price than common varieties. Apparently, the only problem is that it's not Chinese.

The answer is to build up strong state-owned grain enterprises. An official with the State Council's Development Research Center, in an interview, states the view that state-owned enterprises have a big responsibility in carrying out China's long-term food security plan.

State-owned companies like Sinograin, Cofco and Chinagrain (Hualiang) are identified as having responsibility for carrying out china's grain market control policies by purchasing at support prices and storing reserves. Look for these companies to have more bank loans and stock offerings thrown at them to build capacity and integrate up- and down-stream into processing, storage, logistics, even livestock farming. Moreover, they are being groomed to invest overseas and become multinationals themselves.

By the same token, multinational companies should expect to have various obstacles raised against their operations in China.

Rural Environmental Protection

The region around Poyang Lake in Jiangxi Province is the target of a high-profile "green" development project. An article in the government media promoting the project urged readers to strengthen environmental protection and reveals the massive environmental problems in rural China.

The article begins by referring to a number of major environmental disasters, including the recent oil spill in Dalian, a chemical spill in the Songhua River in Jilin, and a massive fish kill in Fujian resulting from a leak from a copper smelter. Plus the BP oil spill in the Gulf of Mexico. Then the article says, we should pay attention to our own pollution problems.

The author recalls his idyllic childhood in the countryside of "clean mountains, beautiful water and good air," when happy peasants could wash their clothes and dishes in nearby streams and ponds or take a quick swim after a hard day in the fields.

However, the author says much of the countryside today is better described as "bald mountains, muddy water, foul air." He warns that environmental degradation threatens the Poyang Lake District project.

The author points out that there isn't much industry around the lake, so the pollution comes from rural people and farms. He describes the general situation in the countryside as “sewage randomly splashed, dumping garbage, heaps of dung, stampede for firewood, animals and poultry running around at random.” One of the big problems is that there is no designated place to dispose of rubbish. There are many new houses in the countryside which are beautiful on the inside while the area outside is strewn with trash.

Agriculture is the other big source of pollution. In growing crops, excessive use of fertilizer and pesticides results in runoff and chemical residues. Livestock and poultry production in inappropriate places produce manure and wastewater that pollutes water, soil, and air. Farmers raising fish and shellfish in ponds and reservoirs feed them with animal and human waste and chemical fertilizer. The author says the water stinks after three years.

The author recommends that environmental protection should be included in the evaluations of rural officials. Rural peoples' environmental awareness should be raised. Villages should have fixed trash disposal points and regular pickups for burning, burial, or treatment. The mode of agricultural production should be changed to reduce chemical use and to treat and recycle animal waste.

The website about the project shows photos of pristine wilderness and a large quote from Premier Wen Jiabao urging protection of the Poyang Lake and keeping it as a lake of clean water forever. A quick search for news on the Poyang project shows why the author may be concerned. The main news item has a list of targets for per capita income, income growth rates, and life expectancy for 2015 for each city in the Poyang Lake district. There are 10 industries targeted for development, including aircraft, "new-style cars" and repair, "new energy," and electricity generation.

Poyang Lake will not be Walden Pond. China does not have a Henry David Thoreau (at least not an influential one). It's a country run by engineers who can't resist building and planning everything.

Reserve Purchase Policy Key for Corn Market

The Dalian Commodity Exchange gathered futures analysts to hold a "Beijing Region Futures Salon" where they discussed the outlook for China's corn market. An article in Futures Daily summarizes the interesting discussion.
The discussion focused on the growing demand for corn. A major change is the explosive growth in industrial processors' demand for corn. One analyst notes that capacity in this sector grew rapidly during 2002-07 and industrial uses now account for 28% of corn consumption in China. If the processing capacity of 77.5 mmt were entirely utilized, this sector would consume 47% of the corn crop. The analyst suggests that the sector faces "integration" (consolidation?) in the next 3 years, but its growth has changed the "amount and rhythm" of corn demand.

Other major demanders for corn are feed mills and corn reserve warehouses. Feed demand is robust, given the rapid growth in China's economy.
Analysts said that enterprises now have little corn in inventory. There is a gradually tightening corn supply-demand situation. Typically, corn prices fall during October when the new harvest comes on the market. Analysts think there may be little decline and prices will remain relatively high in the current supply-demand situation.

The big uncertainty, according to another analyst, is reserve policy. The government's historical role has been to soak up surplus corn from the northeastern region to support prices and warehouse it or send it to other provinces. In a fundamentally changed situation of tight supplies, will the government continue in its customary role?

The government has been auctioning reserves into the market this year to cool down prices. Will the government go into the market this year to replenish reserves? If it does, the government will be competing with feed mills and industrial users for a limited supply of corn.

Cngrain.com northeast crop tour

The China Grain Net (cngrain.com, affiliated with Sinograin, the government's grain reserve company) organized a crop tour of northeastern provinces in mid-September. The group investigated mostly the corn and soybean situation in Siping of Jilin Province, Qiqihar and Heihe in Heilongjiang Province.

The group found that corn area and yield are up from last year. This year's corn prices are good and farmers have been encouraged by government policies. A lot of farmers in Siping and Qiqihar have shifted area from soybeans to corn. In Siping, corn area is estimated to be 11 million mu this year, up 1.7 million mu from last year. Rice area is also up. However, soybean area is down about 50%. Soybean yields look better this year, but production will be down due to the fall in area.

Planting was late this year in Siping, so farmers chose early-maturing varieties. There have been some problems with flooding. In Qiqihar, this year's corn crop is estimated to be mostly 1st or 2nd grade, whereas last year it was mostly 4th and 5th.

Cngrain.com estimates that corn area in the northeast is up 4.1% this year and 2% nationally. Their balance sheet for corn includes an estimate of 165 mmt for 2010/11. Their estimate of production for 2009/10 is 155 mmt, much lower than the official number. Thus, they see a rebound in corn production this year of about 10 mmt. Their estimate of 2010/11 corn production is slightly lower than 2008/09. Their estimate of corn use is less robust than NGOIC's. They estimate that China will have a corn surplus of 9.9 mmt in 2010/11.

The supply-demand situation in Siping is tight. There are two large industrial users that consume about one-third of the local corn, and two major feed manufacturers. These corn processors have very little corn on hand. Under the new rules, the two feed mills are qualified to buy corn from auctions of reserve corn, but industrial users are not. There is a lot of pressure to replenish inventories. The local grain reserve company also needs to build up inventory. Farmers are eager to sell, but they have no corn on hand.

In this situation, when new corn comes on the market, it is expected to sell at a high price. The expectation is a price of .9 yuan/jin (about $269/mt or $6.58 per bushel).

In Heihe, a major soybean-growing area in northern Heilongjiang, there are the usual complaints about foreign soybeans wiping out the industry. The local industry people say there is basically no room for profit for local soybean crushers. They say local soybean crushers are shut down most of the time and only use about 10% of production capacity.

We can see in the northeast how soybeans disrupt China's grain price strategy. The idea is to keep prices rising gradually year after year to stay ahead of cost increases and give farmers incentive to plant grain. This is what's happening with corn. However, soybean prices can't follow this path because imported soybeans don't rise in price every year. Thus, with corn prices rising and soybean prices tied down by competition from imports, farmers are abandoning soybeans.

Big Grain Harvest to Head off Inflation?

On September 28, a glowing report from the Ministry of Agriculture carried on many web sites announced that the fall grain harvest is well underway and it looks like another year of big grain production. According to MOA, the area planted in fall-harvested grain is up 10 million mu (1.5 million hectares) and yield is on an upward trend in all regions.

The MOA report gives no concrete evidence for the rosy forecast. Instead it lists this year's serious setbacks -- a horrendous drought in the southwest last winter, cold temperatures in eastern provinces, serious flooding this summer.

The report does recount all the efforts made by "central leaders and comrades" to guide anti-disaster work. The State Council held many special meetings, subsidies for special seeds and machinery purchases were increased, other subsidy funds were given out earlier, minimum support prices for rice and wheat were raised. The Ministry requires agriculture officials at all levels to resolutely carry out field management, pest control, and other measures to mitigate disaster losses.

Another article citing the MOA forecast of a big harvest reveals that officials are somewhat frantic about ensuring a big grain harvest. Officials are worried that a short grain harvest could set off price increases that might spread to other commodities, sparking wider inflation.

The article repeats the official mantra that the domestic grain market is insulated from the international market since China is close to self-sufficiency in rice, wheat, and corn; therefore rising prices in the international market will not affect China's grain prices. However, the article notes that basic food grains have no substitutes and an increase in grain price has "high conductivity". Rising grain prices could spread to other agricultural commodities and raise downstream prices for feed, edible oils, meats and eggs, ultimately increasing the CPI.

Officials are on edge after prices of several small commodities -- garlic, mung beans, and ginger -- soared last summer. However, the article assures us that the government immediately stepped in, clamped down on rogue investors, and prices receded.

The article also cites policy measures that encouraged farmers to plant grain. It notes especially that farmers had strong incentives to plant corn. It says a China Grain Net corn tour estimated that this year's corn harvest will be up 5.5 mmt (4.8%) from last year, reaching 165 mmt. It also recounts how the government has increased its ability to control prices by building up reserves of grain. As an example, the article says the government arranged for sales of reserve corn when that commodity's price was rising quickly in mid-June.

Antidumping on Poultry Imports: who benefits?

There is an ongoing spat over poultry trade between the U.S. and China.

This week, on September 30, the WTO announced its support of China's complaint against the U.S. section 727, which forbade USDA from implementing measures to allow imports of Chinese poultry to the U.S.

China conducted an antidumping investigation against imports of U.S. chicken into China as a tit-for-tat measure. China began the antidumping investigation about a year ago, accusing the U.S. of dumping poultry in China below the production cost. China's commerce ministry claimed that the imports were causing great harm to its industry. Countervaiing duties were assessed in February of this year.

China's imports of U.S. poultry have mostly stopped since March of this year (see chart below). But imports from Brazil and Argentine immediately jumped to meet the demand in China. From January to August, China's imports of poultry from the United States dropped 355,000 metric tons, but imports from Brazil-Argentina jumped 230,000 metric tons. The fact is, demand for chicken feet and wings in China cannot be entirely met by Chinese producers.
(click on the chart to see a larger image)

Has the freeze-out of U.S. poultry helped Chinese producers? The chart below shows that domestic Chinese chicken prices surged temporarily in February, but weren't much different from last year until the last three months. Since July, both retail and farm prices of chicken have surged. However, the increase in retail chicken price of about 1.3 yuan/500g exceeds the increase in the farm price of about 0.9 yuan. The increase may reflect an untick in general food price inflation. By comparison, the retail price of duck (not affected by imports) increased less than the price of chicken. The increase in the duck price was about the same as the increase in the farm price of chicken.
(click on the chart to see a larger image)

The bottom line is that the restriction on imports of U.S. chicken has had a minor effect on the supply of chicken in China; most of the lost U.S. imports have been replaced with imports from Brazil and Argentina. If there has been an impact, it has been to raise Chinese consumer prices for chicken. The modest increase in farm-level chicken prices since July didn't help Chinese farmers much since feed costs have risen this year. The only possible beneficiaries of the antidumping action are poultry processing companies in China.