With the coming of a transition period after China's joining the WTO, where the domestic industries will go has become a heavy topic of discussion. In the past two years, domestic industries have been struggling to find a foothold for themselves.

Prior to China's access to the WTO, many people felt concerned for China's agriculture after entry into the WTO. After two eventful years, however, China's agriculture was not so weak as being unable to stand competition, even though it experienced two years' hardship. But tougher test given by the open market to agriculture is yet to come and impact on agriculture will not thus end. What is more, the import and export of agricultural products underwent some subtle changes in the second year after China's WTO entry. In 2003, the import and export of farm products (excluding aquatic products) reached US$32.44 billion, up 36.9 percent year on year, of which, the value of exports hit US$15.97 billion, up 18.2 percent; imports US$16.47 billion, an upshot of 61.5 percent. The trade in agricultural products saw a deficit of US$490 million, while in 2002 China enjoyed a surplus of US$3.3 billion of trade in agricultural products.

In the first half of 2003, China's export of agricultural products bore the brunt of the invasion of SARS. Plus the fact that the technical barriers set up by foreign countries against the export of China's agricultural are on the increase, they are more covert in form, harsher in condition and more frequent in use, consequently, the environment for the export of China's agricultural products allows of no optimism. In May 2003, Japan banned import of all poultry products from China under the pretext that bird flue virus was detected in duck meat. This act caused a sharp decrease in China's export of frozen chickens. China's export amount that year was valued at US$280 million, down 22.5 percent. On July 8, 2003, Japan formally put into practice the Seeding Amendment Act, stipulating that organizations or individuals who reproduce and sell protected seeding will be penalized. Furthermore, enterprises or individuals who purchase and cultivate protected seeding, and sell and import and export harvested products are also listed as targets of punishment. Many Japanese companies entrusted Chinese agricultural enterprises with the cultivation of onion, spinach, ginger, and garlic, which made it highly possible for the Chinese agricultural enterprises to unconsciously become Japan's target of attack in its effort to protect its patented products.

With further opening up of the Chinese market for agricultural products, foreign agricultural products will swarm into the domestic market. The trend had emerged in 2003, when soybeans, cotton and other material farm products began to launch a massive offensive.

With the rapid expansion in the ability to process soybeans, home-produced soybean had fallen short of demand long before. In 2003, China imported 20.74 million tons of soybeans valued at US$5.42 billion, a sharp rise of 83.3 percent and 120 percent respectively. The amount of imported soybeans already outstrips soybeans produced in China, thus restraining the rapid swell of the capacity of domestic soybeans markets. Similarly, the decrease of domestic cotton output has resulted in a sharp rise of imported cotton. In 2003, China imported a total of 870, 000 tons of cotton worth US$1.17 billion, up 390 percent and 530 percent respectively, making it the only commodity that used up the year's quota among all tariff quota commodities. While in the previous year, only 22 percent of the cotton tariff quota was used.

Influenced by natural disasters in some countries in 2003, there was a substantial rise in the price for China's imported soybeans, vegetable oil, cotton and natural rubber, the average price for the imports of the above-mentioned commodities rose 20 percent, 16.1 percent, 29.7 percent and 33.1 percent respectively over the previous year. Additional US$1.78 billion was spent in 2003 over 2002 on the import of the aforementioned products due to price rise. The interaction between the price rise for imported agricultural products and the domestic market also spurred a price surge for domestic grain and oil, thus further stimulating a drastic increase in the import of related foreign products. In 2003, China imported 5.41 million tons of edible vegetable oil worth US$2.58 billion, up 69.9 percent and 96.9 percent respectively.

Chinese agriculture is in its most difficult period. Although the short supply of agricultural products has been alleviated, the problems concerning the irrational structure of agriculture and rural economy, low composite agricultural efficiency and slow increase of farmers' income have become increasingly prominent.

Against the backdrop of China's entry into the WTO, there are two basic facts that Chinese agriculture cannot avoid: First, the situation in which small-scale scattered traditional agriculture can hardly compete with foreign modern agriculture, and this situation will not be reversed in a relatively long period of time. Second, the unfair competition environment resulting from developed countries' high subsidies to and protection of agriculture, will not change fundamentally in a short period of time. In its extensive and important commitments made during negotiations on China's WTO membership, Beijing neither gave its agriculture high amount support and export subsidy as the developed countries did, nor did it impose high tariff to protect its own agriculture as the developing members did. Therefore, the challenges facing China's agriculture will exist for a long time.

By People's Daily Online