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Foreign Investment Difficulties for Chinese Agribusinesses

At a symposium on agricultural foreign investment held by China's Ministry of Agriculture and Rural Affairs (MARA) this week companies complained about financing difficulties, limited market access, and lack of information about laws, policies and market environments in target countries. 

The meeting was attended by representatives of 42 Chinese companies engaged in seed, livestock, fishing, and crop production, as well as officials from powerful government organizations such as the National Development and Reform Commission, Ministry of Commerce, the Foreign Ministry, and various MARA offices and government-affiliated units. Presentations by state-owned grain trader COFCO and seed producer Zhongnongfa Seed Group discussing their experiences and difficulties were featured. 

According to MARA's description of the meeting, agricultural enterprises have overcome difficulties in recent years and played an important role in building China's "Belt and Road", building a new type of international relations, and ensuring China's supplies of grain and other important agricultural products. However, MARA said "going global" has become more complicated in the current agricultural situation.

The meeting called for a wider array of policies to support foreign agricultural investors to nurture China's own multinational companies and deeply integrate companies into supply chains in order to revitalize rural areas and build China into an agricultural power. 

Financing seemed to be the most prominent policy issue. The meeting recommended creation of a platform to link up prospective investors with banks, and it encouraged financial institutions to offer individualized financial and service products to agricultural companies investing abroad. Better communication between ministries--presumably foreign ministry organizations communicating investment or foreign aid opportunities to the agriculture ministry--was also recommended.

A related meeting on agricultural science and technology parks in Central Asia was also held this week. The meeting discussed examples of agricultural scientists from Shaanxi Province's Northwest Agriculture and Forestry Science and Technology University adapting improved Chinese varieties and techniques for use in Kyrgyzstan, Kazakhstan, and Uzbekistan. These included 

  • experiments with adapting apple rootstock to survive cold winters at a 10-hectare demonstration park in a so-called "science city" Kyrgyzstan
  • introduction of wheat varieties, wide-furrow seeding, and salinized soil management in Kazakhstan
  • testing of solar-powered drip irrigation equipment on 6.7 hectare of wheat and cotton in Uzbekistan
China has built a series of agricultural demonstration parks in Central Asia during 2017-18 where universities are responsible for introducing and adapting technologies while companies will be expected to commercialize the seeds, equipment and technical services.

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