ABSTRACT
China and the United States enjoy close and mutually beneficial agricultural ties. The U.S. has long been China’s largest supplier of agricultural products. In 2014, Chinese imports of agricultural products from the U.S. totalled USD 28.7 billion; China’s agricultural exports to the U.S. totalled USD 7.4 billion. China has overtaken Japan, Mexico and Canada to become the leading export market for U.S. agricultural products, and the U.S. accounted for over 24% of the value of China’s agricultural imports during the 2012-2013 period, a larger share than any other country (Gale, Hansen & Jewison, 2015). However, as the Chinese government is determined to better utilize inter-
national resources, there is heated debate over whether the U.S.-dominated international market is a reliable option for China’s food security. The focus is on defining the role of the U.S. as China’s biggest supplier of agricultural products in its global agricultural strategy. On the one hand, there is a strong desire for China to further improve agricultural ties with the U.S. For instance, during Xi Jinping’s visit to the U.S. in 2012, he championed deeper and closer agricultural cooperation with the U.S. The two countries consequently signed a five-year agricultural pact (Tan, 2012). Again during President Xi Jinping’s first state-visit to the U.S. in September 2015, China’s Minister of Agriculture and the U.S. Secretary of Agriculture held a bilateral meeting on agricultural cooperation and renewed the Memorandum of Understanding between the two countries on Cooperation in Agriculture and Related Fields, to promote comprehensive, sustained and balanced development of agricultural cooperation (Ministry of Foreign Affairs, P. R. China, 2015). The issue of agricultural cooperation is also included in annual U.S.–China Strategic and Economic Dialogue. On the other hand, however, as China increasingly depends on the U.S. for
food, some scholars and even government officials are concerned that overreliance on the United State will not only destroy the country’s domestic agricultural production, but also jeopardize national security (Patel, 2008; Lu, 1998; Xu & Xu, 2009; Hu, 2007; Zhao & Yang, 2010; Liu 2014). Some pointed out that large-scale U.S. soybean imports since the mid-1990s
destroyed China’s domestic soybean production sector, causing China to lose control of its soybean supply chain to foreign agribusiness, American agribusiness in particular (Wang, 2011; Zha, 2011; Li, Jia & Zhao, 2011; Qiu 2010). Thus, there are growing concerns that with a large amount of corn imports from the U.S., China’s corn sector might be ruined as well. Many strategists are predominantly worried about potential food wars with the U.S. as they believe any over-reliance on American food supply will give the U.S. ‘food power’ against China. In particular, many argue that the row over genetically modified (GM) food has been the U.S. secret bioweapon against China. As a result, there are calls to reduce over-reliance on U.S. food imports via import diversification and creation of China’s own agricultural supply network. Such calls resulted in the recent ban on American corn and pork. Against this background, the chapter reviews Sino-U.S. agricultural coop-
eration from both economic and security perspectives and analyses the emerging trends that affect the two countries’ agricultural ties in the future. The rest of the chapter is arranged as follows. The second section contains a review of the economic impact of Sino-U.S. agricultural cooperation. The third section examines the political and security aspects of Sino-U.S. agricultural ties. Following that, the fourth section is focused on China’s attempts to reduce its reliance on American food imports. The final section discusses future prospects and further implications of Sino-U.S. agricultural relations.
Sino-U.S. agricultural cooperation has a long history. During an interview prior to Xi’s visit to America in February 2012, Chinese agriculture minister Han Changfu said that agriculture was one of the first areas of cooperation for China and America (Xinhua News, 2012). Since the normalization of Sino-U.S. relations in the late 1970s, agricultural cooperation has boosted trade, cooperation and exchanges in other important areas. Indeed, agricultural cooperation became the strongest link in Sino-U.S. bilateral relations. With China’s accession to WTO after 2001, the volume of bilateral agri-
cultural trade has experienced phenomenal growth. According to report produced by U.S. Department of Agriculture, the U.S. accounted for over 24% of China’s agricultural imports by value during the 2012-2013 period, a larger share than any other country. The U.S. supplied 36% of total China’s oilseeds imports, 42% of cereals imports, 30% of cotton imports and 25% of meat imports during 2012-2013. In the meanwhile, the U.S. is also one of China’s top three destinations for agricultural exports. For instance, China is one of the major suppliers of canned fruits, farmed fish and shellfish, apple juice, garlic, mushroom, pet food, noodles, tea and spices for the U.S. (Gale, Hansen & Jewison, 2015). As seen from Table 6.1, bilateral agricultural trade has experienced phenomenal growth from 2001 to 2014. America’s imports of agricultural products from China increased from USD 1.5 billion in 2001 to USD 7.4 billion in 2014; whereas its agricultural exports to China reached USD
28.7 billion – over 13 times of the amount in 2001. America’s agricultural trade surplus against China amounted to USD 21.3 billion in 2014. This rapid expansion of bilateral agricultural trade brought enormous
benefits. On the one hand, as echoed by Tom Vilsack, agricultural secretary of the U.S., ‘Increased agricultural exports create important income opportunities for producers as well as off-farm jobs that are so critical for strengthening economics in rural America’ (USDA, 2010). It was estimated that for America, every USD 1 billion in agricultural exports supports over 8,000 jobs and generates an additional USD 1.4 billion in economic activity. In 2014, agricultural exports valued at approximately USD 28.7 billion to China provided jobs for over 230,000 Americans and generated an additional USD 40 billion in economic activity. On the other hand, cheap agricultural imports from China, such as fresh and processed fruits, helped to enrich the Americans’ diet and contain inflation (USDA, 2012). Similarly, agricultural export was very effective in creating job opportu-
nities for the Chinese. According to China’s Ministry of Commence, every USD 1 million of agricultural export can directly and indirectly create 20 jobs (Ministry of Commerce, P. R. China, 2009). In 2014, China’s agricultural export to America totalled USD 7.4 billion, accounting for 14 million jobs. Also, despite the fact that China incurs substantial deficits in Sino-U.S. agricultural trade, it still benefits from U.S. imports of agricultural products. From an economic perspective, China mainly imports soybean, corn and cotton from America to generate better returns for farmers. Also, cheap soybean and corn from America, mainly used as animal feed and edible oil production, are crucial for meeting the country’s growing demand. From the food security perspective, agricultural trade with America contributes to China’s food security. Huge soybean, cotton and corn imports from the America help China to achieve self-sufficiency in staple crops including rice, wheat and corn. In addition, strong agricultural trade ties between two countries have fos-
tered the growth of interest groups, particularly in the U.S., contributing to the stability of overall Sino-U.S. relations. Although American farmers make up only around 2% of the country’s population, they are very influential in national politics. U.S. agribusiness corporations and farmers’ organizations have invested millions of dollars on campaigning and lobbying to influence
Table 6.1 Agricultural trade between China and the U.S. (USD billion)
