China is running out of food, and the effects are being felt everywhere
COVID lockdowns in rural China in 2020 and 2022, and the Russia-Ukraine war bring the crisis to the global stage
Quick takes:
China has a quarter of the world’s population and only 9% of the world’s arable land.
Much of that arable land is in arable in name only, after decades of neglect and pollution.
China’s foreign policy and investment efforts in Africa are intended to secure reliable stores of food and commodities to its hungry Chinese citizens and industries. The Russia-Ukraine war will compel African governments to look after themselves first.
COVID lockdowns in China resulted in millions of acres of crops to go fallow in 2020 and 2021.
In 2020, experts at China Insider were issuing warnings of impending food shortages to our companies and families back home.
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In 2019, China passed the United States and the EU as the top importer of food products. For over a decade it has been a net importer of rice, THE staple of Chinese diets. This demand has been an inexorable feature of global agriculture markets for decades. Since 1980, there has been the migration of some 600 million Chinese from farms to cities, but without a corresponding rise in farm productivity such as seen in developed countries.
Then came 2020, and COVID-related lockdowns. Travel was reduced to practically zero during the Chinese Spring Festival when, typically, Chinese migrant workers spend the holiday with their families, then go to farms to plant food. But in 2020, everything changed. Farmers didn’t go to the farms, because nobody was going anywhere. So millions of acres of cropland never got planted at all.
So what happened the NEXT year, when the cupboards began to run empty?:
In 2021, (China) imported 28.35 million tonnes of corn, an increase of 152% from 11.3 million in 2020, according to data from the General Administration of Customs. Wheat imports also hit a record 9.77 million tonnes, an increase of 16.6% from 8.38 million in 2020.
Demand for imported corn skyrocketed a shocking 152% year on year. Wheat saw a YOY surge of over 16%.
These catastrophic trends are compelling Beijing to act with urgency. China’s National Development and Reform Commission, the Agricultural Ministry, and economic agencies at the province levels are implementing urgent directives to secure food supplies abroad, coupled with demands to dramatically increase domestic food production.
((It is crucial to understand the context of this. It is not akin to Joe Biden’s council of economic advisors getting on a Zoom call with some other departments and governors in the Corn Belt to brainstorm ideas. In China’s command economy, it is equivalent to mobilization for war, with the full resources of the government marshaled behind these ambitions, and with propaganda and rhetoric to match.))
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With respect to the first point, and Beijing’s efforts to secure food supplies abroad, the Russia/Ukraine war will almost certainly result in the demise of all those efforts, and a decade of China’s investments in Africa are now at risk in the face of desperate food shortages there.
A key feature of China’s Belt-and-Road Initiative, which poured tens of billions of dollars into logistics projects across South Asia and Africa, is the idea that Africa especially would serve as a huge import market for Chinese industry, and – even more critically – a giant reservoir of food, oil, copper, and cobalt with which to feed China.
And this had been working out pretty much as planned. So far in 2022:
Africa exported goods worth USD 105.9 billion to China, an increase of 43.7% from the previous year. China is increasingly importing agricultural products and manufacturing goods from Africa, in addition to its continued strong focus on oil, precious minerals and metals. African imports from China mainly focus on manufactured goods such as electronics, clothing and appliances, and technology.
And
33 of the poorest jurisdictions in Africa export 97% of their exports to China with no tariffs and no customs duties. This (McKinsey) report noted that bilateral trade was still heavily centered on China’s import of Africa’s natural resources.
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In September of last year, China’s foreign ministry announced that
China wants to expand the sale of African agricultural products across its e-commerce platforms.
Wu Peng, director general of the ministry's department of African affairs, said at a launch ceremony of "African Products Online Promoting Season" that . . . the online promotion will help African products, particularly agricultural products, gain more market shares in China.
An observer might be curious just why the China Foreign Ministry would weigh in on the issue of African farmers selling their food on Taobao (an Alibaba company, similar to Amazon). Would that not be the purview of the Agriculture Ministry, or Commerce? It does serve to demonstrate, however, that the securing of food supplies is an all-hands effect by the whole of the China government.
More to the point, by allowing large farmers and ag companies in Africa to sell directly to the China market, it is hoped that food producers there will circumvent their own governments’ (in Africa) efforts to retain food supplies for their own populations.
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Blowback is now inevitable. The Russia/Ukraine war will force governments in Africa to look after themselves first. While the war has pushed up consumer prices in the developed world because the flow of energy is being choked off, it is threatening famine and acute starvation in Africa and the Middle East. Russia and the Ukraine supply huge swathes of the Middle East and Africa with grains and cereals, and these regions are already seeing double-digit food inflation. Sixty percent of the world’s malnourished populations are already being affected by the conflict, Ghana has already announced a ban on food exports, and India’s wheat crop has been devastated by high temperatures and they announced an export ban of the their own.
It is already evident that it is every country for itself. Food security presents existential challenges for governments, and failing to meet them will cause governments and states to fail.
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Growing and eating food is a zero-sum game. Food grown in and shipped from Africa to China can not, definitionally, be consumed in a hungry Africa. And as the entire world is choking down higher food prices, governments everywhere have caught on to China’s role in how they have—until now—been supplying their own hungry populations. To that end, China’s Consul General in Nigeria, Africa’s most populous country, is trying to get ahead of mounting global criticisms that China is hoarding the world’s grains, particularly at the expense of African nations. Chu Maoming blamed food waste in developed countries and claimed that it alone was equal to the entire agricultural output of sub-Saharan Africa, and said
"it is unnecessary for China to hoard grains". . . "(T)he year 2021 marks the seventh consecutive year that China secured an annual grain production of over 650 million tonnes . . . China has the capability and confidence of being self-reliant in securing her own food supply. It is unnecessary for China to 'hoard grains' in the international market."
Only time will tell if these assurances will assuage Africa’s fear that their already catastrophic food outlook won’t be worsened by continued exports to China.
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There seems to be no end to the bad news in the short term. For China, however, the emergency won’t end when the war in Europe ends and lower temperatures and rains resume elsewhere: domestic food shortages will be a chronic feature of Chinese life for decades to come, and this fact will force Beijing’s hand in unforeseeable ways.