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China in the Global Economy

China in the Global Economy

Edited by P. J. Lloyd and Xiao-guang Zhang

China in the Global Economy focuses on the theme of twin transitions occurring in the Chinese economy: the transition from a centrally planned economic system to a market oriented one, and from an agrarian to a modern industrialised society. China’s exporters face unprecedented competition in the world market and the flow of foreign direct investment has fallen restraining the growth of the domestic economy. These new challenges have fuelled debate on the perspective of the Chinese economy and its role in the global economy.

Chapter 14: Are food embargoes a real threat to China?

Yongzheng Yang

Subjects: asian studies, asian business, asian economics, business and management, asia business, international business, economics and finance, asian economics


Yongzheng Yang* INTRODUCTION Food security has been the paramount objective of China’s agricultural policy. Despite substantial improvement in agricultural production since the rural economic reform beginning in the late 1970s, concerns over food security in China have intensified as the Chinese economy is increasingly integrated with the rest of the world. With remarkable growth in the past 20 years, China is losing its comparative advantage in land-intensive agricultural commodities, especially grain (Zhang 2000). Economic efficiency dictates that China may have to increase its grain imports, which would be paid for by foreign exchange earnings from its increasing exports of labour-intensive manufactured goods. Since 1994 domestic grain prices have approached or even exceeded their world levels. It was also at this time that Lester Brown warned that China would have to increase its grain imports on such a scale that it would cause major disruptions to the world grain market (Brown 1995). China’s World Trade Organization (WTO) accession process has heightened the concerns over food security. The government has been reluctant to commit itself to liberal trade in agriculture. China is not alone in this regard, as agricultural liberalization proceeds following the Uruguay Round Agreements and many countries increase their grain imports over time. Thus, food security could be a major issue in future rounds of multilateral trade negotiations.1 Such an issue has already been examined in the context of the Asia Pacific Economic Cooperation (APEC) process (DFAT 1996). Aggravating China’s food security concerns have been its increasing...

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