ECONOMIC AND SOCIAL TRANSFORMATION OF CHINA

THE HISTORIC ECONOMIC AND SOCIAL TRANSFORMATION OF CHINA

HIGHLIGHTS

When we first started posting comments in this blog, essentially referred to Climate Change and Foreign Trade, we did stress the importance of the shifting of the world trade axis from the Atlantic to the Pacific. We have since then explored the growth of the alliances in the Pacific region. A few days ago we have discussed the degrees of freedom Mercosur countries have, or lack, in order to reorient part of their 2013/2022 trade strategies, in relation with the importance of their own agricultural markets. And we have referred to this OECD – FAO AGRICULTURAL OUTLOOK 2013-2022. As said report stresses the importance of China, we feel it is interesting to bring you the highlights on the historic and social transformation of China, that also point to the opportunities for food producing countries such as Argentina, Brazil, Uruguay and to a lesser extent also Paraguay, which are the four founding members of Mercosur.

Cuando dimos inicio a este blog, referido esencialmente al Cambio Climático y al Comercio Internacional, marcamos la significación del corrimiento del eje del comercio mundial del Atlántico hacia el Pacífico. Hace unos días nos hemos preguntado por los grados de libertad que tiene el Mercosur para poder reorientar parte de su estrategia comercial 2013/2022, en función de la importancia que tienen para dichos países sus complejos agropecuarios. Y nos hemos referido igualmente a este informe FAO-OCDE sobre la agricultura para ese período. Tal informe destaca muy especialmente la importancia de China, que también apunta a las oportunidades que se hay para países productores de alimentos como son la Argentina, el Brasil, el Uruguay y en una menor medida el Paraguay, los cuatro fundadores del Mercosur. 

Mauricio López Dardaine

Source: OECD – FAO AGRICULTURAL OUTLOOK 2013-2022

« Le moyen terme nous montre des pérspéctives favorables pour l’agriculture jusqu’en 2022. Dans le court terme il existe une dichotomie entre les secteurs mondiaux de culture et ceux consacrés au bétail. Le secteur de culture se charactérise par des prix à la baisse en relation aux très hauts prix relativement récents, en raison des larges approvisionnements et au réapprivisionnement des stocks enduit par les hauts prix des années récentes.

"Par contraste, les prix des produits dérivés du secteur bétail sont hauts et augmentent encore au début de la période analysée (2013/2022), poussés par les hauts prix de l'alimentation du bétail et la réduction des stocks et production de bétail.
« Au-delà du court terme, les marchés, en général, vont commencer à se resserrer et les prix de l'agriculture vont devenir plus fermes, avec les prix de la plupart des commodities, en termes réels, restant aplatis."

“The historic economic and social transformation of China which has been evidenced in the past three to four decades has and will continue to have huge potential implication for international agricultural markets which are the focus of this Outlook. China, which now holds one-fifth of the world’s population, is endowed with little arable land and water supplies relative to its population base. Indicators point to continued robust growth in domestic demand for agricultural products, but also to potential challenges on the supply side. China has undertaken significant market reforms and depending on future policy options, may engage world markets more or seek its own means to meet its increasing domestic demand.

“China’s success in increasing agricultural production and in feeding better its growing population in the past three decades has been remarkable. Since joining the World Trade Organization in 2001, however, trade patterns have started to change. While it remains self sufficient in specific food security commodities, China’s doors have opened to certain commodities such as oilseeds and trade has grown exponentially. For some commodities, including pig-meat, dairy products, maize, and sugar, imports have grown considerably in recent years. Retail food price inflation has been significant since 2000.

“While it would appear that substantial room exists for productivity gains to sustain domestic market advantage, constraints of land, water, and even rural farm labour appear to limit future supply response.

“On the macroeconomic side, exchange rate appreciation due to high growth in exports of labour intensive manufacturing products also has made agricultural imports more attractive. On the other hand, China’s agricultural policies are fundamentally addressed to goals of reducing the rural/urban income divide, as well as enhancing food security through policies for raising agricultural production and improving productivity. Furthermore, consumption trends for both calories and protein in China, compared to the higher income economies of the OECD, indicate that the gap has significantly narrowed. Demand pressure with high income growth is expected to sustain in the medium term, but it should ease considerably compared to recent past experience.

*     *     *