China relies little on the global food market, despite its increasing openness and growing trade.

According to Cheng Guoqiang, deputy director with the institute of market economy under the Development and Research Center of the State Council, the country has witnessed an annual 11-percent increase in its food exports following its entry into the WTO in 2001, and an annual 22-percent increase in its food imports.

Between 1998 and 2001, imports grew at 3 percent a year and exports at 2 percent.

However, in recent years the value of food exports has been less than 10 percent of agriculture GDP while food imports accounted for about 10 percent of that figure, which demonstrates a low reliance on the global market.

"The percentage ratio shows that the growth in the agriculture sector is mainly driven by domestic need," Cheng said at the 11th Sino-French Seminar on Wheat held yesterday in Kunming.

According to Cheng, China has become one of world's most open markets in the food trade as the country offers a relatively low tax rate of 15 percent.

But he warned that as the country has entered a period of fast development, it will also enter a phase of rapid increase in food imports in the next five to 10 years, which has been demonstrated by the growth patterns of other developed countries.

The country is expected to import 24.7 million tons of corn and 36.3 million tons of soybeans in 2020 compared with the 10.48 million tons of corn it exported and 10.21 million tons of soyabeans it imported in 2000.

As a result, the self-sufficiency ratio of the country's corn supply will drop from 97.4 percent in 2000 to 74 percent in 2020. For soybeans, the ratio will fall from 46.1 percent in 2000 to 20.6 percent in 2020.It is estimated that the imported grain value will account for 15 percent of the agriculture GDP by then, according to Cheng.

With its huge trade volume, the country will possibly overtake Brazil as the fourth largest food exporter and overtake Japan as the third largest food importer within the next five to 10 years, Cheng said.

However, despite the huge food trade volume, Cheng said the country's food trade structure remains relatively rational.

According to figures from 2005, the major food categories imported were those for production resources, like soybeans, and the exported were labor-intensive ones such as food and aquatic products.

"The import and export structure reflects the comparative advantages of the country and also China's intention of making use of global agriculture resources," Cheng said.

But he said that the world food trade framework had experienced profound changes.

Major food producers including the US and the European Union have adjusted their agriculture policies and increased their allowance to farmers to sharpen their competitiveness in the global food market, he said.

Cheng also said that global food competition could lead to the concentration of resources in the hands of several transnational food giants.

He called for an urgent policy from the central government to protect the country's soybean sector from being totally manipulated by global food giants.

Source: China Daily