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For China, food is more than just eating. In a media system that is shy about sex and forbidden to debate politics, images of loaded tables, bubbling hotpots and peppers tumbling in fragrant oil so often take center stage. Food is the Chinese dream come true.
Feeding China is not just a matter of symbolism, it is geoeconomics on a grand scale. First and foremost, China feeds itself. The country is home to the largest grain and meat production system in the world. But it is also true that the EU has become increasingly dependent on imports since joining the WTO in 2001. In the early 1920s, China was estimated to rely on imports for a third of its food supply, resulting in an agricultural commodity trade deficit of $124 billion last year.
From a strictly economic point of view, relying on world trade makes sense. Per capita, China has one-fifth of the U.S.’s arable land. Water is scarce. In contrast to the flourishing exports, the import of food is a welcome balance sheet item. But import dependence also entails risks. Both the EU and the US are self-sufficient when it comes to food. The signs are that Beijing is increasingly uncomfortable with this inequality. The year started with a tariff on beef. The 15th Five-Year Plan has further increased the priority of self-sufficiency. If food decoupling is pursued with the same vigor as China’s industrial policy, it will upend the global agricultural economy of the past quarter century.
China’s import-dependent abundance stands in stark contrast to its own past. Until 2000, the People’s Republic was poor but largely self-sufficient. Older generations of Chinese still remember the hungry years. As recently as 1994, environmentalist Lester Brown wondered with concern: Who will feed China?
That question has been answered in spectacular fashion. Chinese grain production has increased enormously. The enormous amount of fertilizer has increased the yield per hectare. Generous prices have resulted in the accumulation of huge inventories. In microeconomic terms this is inefficient. But grain stocks provide a comfort blanket.
What they do not address is China’s dependence on imported proteins and animal feed. As Chinese consumers became more affluent between 1980 and 2020, animal protein consumption increased sixfold. It was a political choice to base meat production on imported animal feed. It went hand in hand with China’s accession to the WTO. The main beneficiaries were the US and Brazil.
Why, you may ask, does China have anything to worry about? In the global food economy it is a whale. It has enormous purchasing power. And as the population shrinks, so will the food imbalance.
But for Xi Jinping, food security is a prerequisite core problem. The 14th Five-Year Plan of 2021 identified food as an important pillar of national economic security alongside energy and finance. In 2022, as war raged in Ukraine and global supply chains were threatened, Xi’s speeches talked about average food security. once every five days. This year a revealing analysis by the research group System Iq suggested that China is preparing to deploy the full repertoire of its “industrial playbook” on food security.
It involves a combination of investment and innovation. Beijing coordinates the central and provincial governments, state-owned enterprises and financial institutions smart farming. It has licensed the commercialization of genetically modified corn and soy. Research clusters are forming neoproteinsfermentation-derived ingredients, feed additives and agricultural biotechnology. State-owned banks are ready to provide cheap financing. To channel demand, Beijing is tightening food and feed standards and tightening purchasing requirements.
These are the kinds of systemic policies that have given China a leading edge in the new energy sectors. With all the factors at play, we could see a significant decline in soybean demand as early as 2030, which will dramatically reduce US imports. By 2040, innovation and efficiency gains could plausibly transform China into a net exporter of poultry, dairy, eggs, fish and seafood. If agriculture follows the industrial policy timeline, we can expect China to emerge as a major source of “cultured meat”.
The consequences are major for agricultural exporters in the US and Brazil. Where will they find hundreds of millions of new consumers? The obvious places are South Asia and sub-Saharan Africa, two world regions with the greatest food shortages. But that depends on economic growth that converts human need into effective demand.
Beyond the specific scenarios, the key point is simply this: the global division of labor as we know it today is relatively recent. It was formed decades ago, largely around Western supply chains. This put China in the position of importer in both food and energy. That has made abundance possible, but it also means accepting vulnerability, which Beijing will not do. Expect China to respond with a push for innovation. There is little to regret in terms of global development. The world needs more clean energy, but also new food. It is for the incumbents, “us” in other words, that China’s formidable push for techno-industrial security brings radical uncertainty.
