Dim Sums: Agricultural Markets in China

Chinese propagandists breathlessly describe "unmanned farms" (无人农场) as "the new model for future agriculture," "the path to smart agriculture," and a solution to the problem of who will plant the crops in the future. They envision "farming without going to the fields" via an interconnected web of driverless tractors, seeding, planting and spraying equipment guided by satellites, drones, sensors, and irrigation pumps. China's ideal is to remove human decisions from the farming process by using sensors, big data, artificial intelligence, and other "smart" farming operations. Chinese planners love schematics and fanciful engineering drawings showing complex, colorful layouts. China has been excited about "smart" farming for a while, but the unmanned farm idea seems to be new. A "Rural Revitalization Plan 2018-22"and a May 2019 "digital rural development strategic outline" called for development of smart ag...

China's rural banks are a source of potential instability worrying leaders at this year's "two sessions" legislative conclave...and possibly a canary in the coal mine of a financial meltdown.  Beijing Shangbao reported last week that finding an "orderly solution for risks in medium and small financial organizations is of the utmost importance in current financial work." Premier Li Qiang's government work report identified resolution of risks related to small and medium financial institutions alongside real estate and local government debt as keys to maintaining economic and social stability. Among small and medium financial institutions, rural banks have the most prominent problems. China Banking and Insurance News reported that rural banks had nonperforming loans totaling 754.6 billion yuan at the end of 2022 and a nonperforming loan rate of 3.22%--more than double the rate for larger Chinese banks. Some rural banks have already refused to pay deposi...

We know Chinese folks don't want to have babies, but it turns out Chinese people are dying in unprecedented numbers as well. An extra 11.3 million people died in 2023. Males and rural people are disappearing at the fastest rates.  China's birth rate was record-low in 2023 but its death rate was also record-high as its population plunged by 1.48%, according to the National Bureau of Statistics. This is the second year China has reported a drop in population (last year it dropped 0.06%). The plunging birth rate is the main factor pushing China's population over the cliff's edge, but China's people are also dying faster.  China's birth rate fell to 6.4% in 2023 as the country recorded 9.02 million births. That was down more than half from the rate in 2016 and almost 17 percentage points less than the 1987 peak of 23.3%. China's death rate has been more stable than its birth rate, but there's a clear upswing in deaths over the last 3 years.   Source: Data f...

China has been massaging data on soybean imports and consumption of soybean meal to hide the failure of its policies aimed at reducing reliance on imported soybeans. Last month China's customs data reported that 99.41 million metric tons (mmt) of soybeans were imported during the 2023 calendar year, an 11.41% increase from 89.218 mmt imported during 2022. However, adding up the monthly soybean import totals reported by customs over the last 12 months gives me a bigger total of 101.71 mmt for 2023. That would have been a record amount, exceeding the previous record of 100.3 mmt imported during calendar year 2020. What happened? The 99.41 mmt total appears to have been doctored to whittle down the annual total and keep it under the symbolic 100-mmt barrier. A record soybean import total would have drawn attention to the failure of highly publicized and costly Chinese policies to reduce reliance on imported soybeans. The revisions also foil a prediction that China's soybean imp...

It's said that doing the same thing over and over again and expecting different results is the definition of insanity. By that definition China's agricultural policy is insane.  This month China released the latest in a string of "No. 1 Documents" on rural priorities issued each year since 2004. (An earlier set was issued from 1982-86.) The same programs keep coming up, often with the exact same language. Some long-forgotten programs are intermittently resurrected despite having failed in the past.  This year's document has several failed programs resurrected from the dead. The document directs provinces to experiment with a "dynamic mechanism" linking farm input subsidies to rises in input prices. This apparently is institutionalizing the so-called "one-time subsidies" given to compensate farmers for high input prices each of the last 3 years. The subsidies were given out in 2-to-4-billion-yuan tranches in an ad hoc manner, multiple times in ...

When China says it is "diversifying" its sources of agricultural imports, it really means they are shifting purchases from the United States to Brazil. During calendar year 2023 Brazil had a 27-percent share of China's agricultural imports while the United States had a 15-percent share. This reversed the two countries' positions back in 2014 when the U.S. share was 24 percent and Brazil's was 19 percent.  Source: Analysis of China customs data Brazil had a 69-percent share of China's soybean imports in 2023, up from 62 percent the previous year. Brazil's share of corn imports went from 0 to 47 percent in one year after China approved Brazil as a corn supplier in late 2022. Brazil's share of China's sugar imports was 50 percent, and Brazil's shares were 46 percent for poultry, 41 percent for beef, 28 percent for pork, and 28 percent for cotton.  Other countries that were leading suppliers of China's agricultural imports included Thailand, Au...

China's Minister of Agriculture and Rural Affairs Tang Renjian met U.S. Secretary of Agriculture Tom Vilsack in Washington January 18 to resume the Joint Committee on Cooperation in Agriculture (JCCA), a forum for discussing exchanges between the United States and China that had been dormant since 2015. During the same trip Tang also visited Mexico and the Dominican Republic to discuss closer agricultural exchanges with developing countries on the U.S. doorstep. Chinese Minister of Agriculture and Rural Affairs Tang Renjian met U.S. Secretary of Agriculture Tom Vilsack January 18. Source: China MARA . In the official USDA news release  about his meeting with Minister Tang, Secretary Vilsack emphasized China's role as an export market, noting that he discussed market access issues with Minister Tang and expressed hope that the bilateral relationship will expand and improve market access opportunities for U.S. farmers and ranchers in China. The USDA statement also said discussion...