Download Current Issue - SAIS

When, as a result of market reforms,
agricultural productivity began to rise
steeply in the early 1980s, surplus labor
began to move away from the farm, first
to emerging rural industries—usually
collectively owned—in nearby towns
and later, from the early 1990s, to the
big cities in eastern China, where the
demand for cheap labor was exploding.
China’s total migrant population living
in urban areas, often without access
to subsidized urban services such as
health and education (because many
lack a permanent urban registration
certificate, or hukou), is estimated at
175 million. The share of agricultural
employment in China today is about
one-third, roughly the same as in Japan
in 1960 and South Korea in 1970. The
migration of agricultural surplus labor
to higher-productivity jobs will continue
for at least another decade, supporting
high economic growth for the
country as a whole.
Food Security and International Trade
China’s traditional preoccupation with
food security—which means grain selfsufficiency—is
more easily understood
when one realizes the country’s share of
the world’s arable land and freshwater
resources (7 percent in both instances)
is only a fraction of the country’s share
of the global population (20 percent).
Joining the WTO was a breakthrough
of historical importance for China and
the world for many reasons, including
confirmation of China’s willingness
to increase its dependence on international
trade for food security. Most
agricultural trade, both imports and
exports, is now relatively unrestricted.
But for basic food grains, including
wheat, corn and rice, China continues
to aim at 95 percent self-sufficiency.
The recent surge in corn imports,
however, suggests Beijing is willing to
compromise.
Increased reliance on imports for
wheat and corn is in the country’s
long-term interest. Those grains are
mostly grown on irrigated fields in
northeastern China, where the shortage
of surface and groundwater has become
acute. China has no comparative
advantage in the production of those
grains, as it has for rice. Rice yields
in irrigated fields in southern China,
where water resources are still relatively
abundant, are typically among the highest
in the world.
It would be better for China—and
for the world—if it used scarce water
resources in the Northeast for the production
of fruits, vegetables, fish and
poultry (products that typically require
much less water and land per dollar of
value added than course grains) and
exported those products to pay for grain
imported from Argentina, Canada, the
United States and other countries that
do have a comparative advantage.
China should also use more “virtual
water” embedded in imported grains
and other products. (For an explanation
of how trade in virtual water can
help alleviate regional water shortages,
see “Water and Development”
by this author in the 2008 issue of
SAISPHERE.)
By joining WTO and opening to
international trade in agricultural
products, China can make more efficient
use of scarce water resources in
the Northeast, home to more than 300
million people—and thereby achieve
higher income growth for farmers and
more jobs in horticulture and animal
husbandry, a win-win for all.
Agriculture Versus Urban Development
Preserving agricultural land is an ongoing
struggle in China, especially in light
of the claim on land for urban development.
As in Hong Kong, there is no
private land ownership in (mainland)
China. Since 1987, urban land, owned
and administered by local governments,
has been made available on the basis
2011–2012 19