Agriculture Reference
In-Depth Information
to the quota level are unlikely to harm China's food security, lower imports
must make the gloomy predctons even more unrealstc.
Finally, the traditional argument asserting the detrimental impact
of gran mports on food securty usually mentons the constrant of the
foregn exchange capacty to purchase grans. Ths argument made sense
n the 1960s and 1970s durng whch tme the gran mport blls usually
consumed more than 10 per cent of total export revenues. Around 1961
when Chna was ht by the severe famne brought about by the dsastrous
policy mistakes made by the Government, the proportion of grain import
costs n total export revenue reached as hgh as 25 per cent.
3
Under these
circumstances, foreign exchange was indeed a critical constraint on the
growth of gran mports and therefore had serous mplcatons for food
security. However, the situation has fundamentally changed since the
economc reforms were mplemented. The past two decades or so have
wtnessed tremendous growth of Chna's export sector. Total export revenue
increased from US$9.75 billion in 1978 to US$249.2 billion in 2000—an average
annual growth rate of 15.1 per cent.
4
As a result of the growth of exports,
future gran mports can at most consume only a small fracton of total
export revenue. On the basis of projected grain prices, 22.2 million tonnes
of grain may consume US$3-4 billion. In 2000, China's export revenue was
more than US$200 billion; hence grain imports would be 1.2-1.6 per cent
of total export revenue n 2000. It s lkely that net gran mports wll be
an even lower percentage of total export revenue n the future.
The regional pattern of the agricultural impact of WTO
accession
In light of the historical pattern of China's agricultural trade, the one-off
trade flow effects of WTO accession may be negative for the agricultural
products n whch Chna lacks comparatve advantage and postve for those
products n whch Chna has comparatve advantage. As the provnces and
regions of China are very diversified in terms of geographical settings and
economic conditions, the trade impact of WTO accession on agriculture is
likely to differ significantly among the different regions.
