ABSTRACT
109China recently embarked upon a new economic agenda to provide higher incomes and more and better consumer products to improve the standard of living of the Chinese people.
Under the new programs, between 1978 and 1981 national income rose 9 percent and consumption 13.5 percent a year. As a percentage of national income, consumption rose from 64 percent to 72 percent.
As personal incomes rise, demand for agricultural products for food also rises. At higher income levels, people also tend to change the composition of their diets; demand for animal products such as meat, poultry, eggs and milk rises faster than demand for grain-based foods.
These trends have been observed in China. If personal incomes grow as planned, per capita consumption of grain and meat in China should continue to rise through the 1980's.
Accommodating these increases and changes in food demand carries major implications for China's grain and livestock sectors. Current trends will generate a growing imbalance between domestic supply of and demand for these products. To achieve balance, the Chinese government will have to implement supply-side policies either to increase imports or to accelerate grain production and improve the efficiency of animal husbandry.
Imports to solve the problem probably would be in the form of grain to free more domestic grain supplies for animal feed. It may make economic sense, however, for China to import isolated soy protein meat ingredients instead. Importing isolated soy protein could save foreign exchange and could help solve several other problems in food production and distribution and in institutional feeding.
Changes in government policy already have stimulated remarkable growth in meat production in China. Between 1978 and 1982, total meat production rose from 8.6 to 13.5 million tons—an average annual growth rate of 12 percent. Although the supply of meat in cities has increased sufficiently to eliminate meat rationing, meat supply still falls short of demand.
Pork currently accounts for 94 percent of China's red meat consumption. Plans call for increased production of ruminant meat—beef, goat and mutton. Chicken now represents a very small portion of the supply. Chinese planners target red meat production to reach 18 to 19 million tons in 1990.
Importing isolated soy protein as an ingredient in meat products could substitute for some of the increase in domestic meat production. This would mitigate rising feedgrain demand and save significant amounts of foreign exchange and probably some domestic resource costs as well.
Isolated soy protein now is economically attractive for China, however, only in comparison to the alternative of importing grain to produce red meat. It may 110not be so attractive in comparison to producing more poultry.
In addition to the foreign exchange implications, however, isolated soy protein may appeal to Chinese planners because it could save scarce domestic resources used in transportation, grain-handling facilities, and refrigeration and other storage.
Although China produces canned meats and sausages, its meat-processing industry is underdeveloped and is probably not now in a position to make effective use of isolated soy protein meat ingredients on a large scale. The Chinese government recognizes the growth potential of this industry, however. As China's food processing industries develop, the opportunities for isolated soy protein use in processed meat products will increase.
