John S. Van Oudenaren
One of the defining themes of General Secretary Xi Jinping’s first decade in power has been to promote self-sufficiency to insulate the People’s Republic of China’s (PRC) economy and political system from external shocks. These efforts have assumed added urgency as a result of the combined economic ramifications of the COVID-19 pandemic and the Russian invasion of Ukraine, which have precipitated price spikes in global food and energy markets. According to China’s official Consumer Price Index figures, from April 2021 to April 2022, fresh vegetable prices rose by 24 percent, fresh fruit by 14.1 percent, eggs by 13.3 percent, and potatoes by 11.8 percent (National Bureau of Statistics (NBS), May 11). Meanwhile, the prices of gasoline, diesel and liquefied petroleum increased by 29.0 percent, 31.7 percent and 26.9 percent respectively. In seeking to tame runaway prices, the PRC must also overcome a domestic externality of its dynamic clearance zero-COVID policy, which is panic buying of food and other essentials. People are naturally driven to stockpile food to safeguard against the shortages that have occurred due to the logistical difficulties of sustaining home deliveries to tens of millions of urban residents during the recent mass lockdowns in Shanghai, Xi’an and other cities (China Brief, April 8; January 14). This dynamic played out again last week in Shanghai when another round of mass testing was announced for about half of the population, which sparked fears that the city was on the verge of a return to the sort of draconian lockdown it had endured in April and May (VOA Chinese, June 10). Despite government reassurances that a city-wide lockdown was not imminent, panic buying ensued at many supermarkets with shelves stripped of vegetables and instant noodles (NetEase, June 12, 2022).
Sichuan Shakeup
On June 8 and 9, Xi traveled to Sichuan province for an inspection tour (Xinhua, June 8). The visit was notable for several reasons. First, it comes at the height of China’s political season amidst supposition that Xi has been forced to cede ground to rivals on economic policy and personnel appointments ahead of the 20th Party Congress this autumn. Xi used the occasion to highlight his role in guiding the disaster response to the 6.1-magnitude earthquake that struck Ya’an City, Sichuan on June 1, which was proclaimed a success because mass casualties were largely averted with four total deaths reported (Xinhuanet, June 9). Xi also conveyed full confidence in his policy agenda emphasizing that “the country’s dynamic zero-COVID approach must be unswervingly continued,” while also citing other policy prerogatives: stable economic growth, green development, poverty alleviation, youth employment, scientific and technological innovation, and rural revitalization. Throughout the inspection tour, Xi and most of his entourage went without masks. Last month, Xi’s longtime political rival, Premier Li Keqiang opted not to wear a mask during a tour of Yunnan University in Kunming at the height of the Shanghai lockdown— a move that attracted considerable attention, with some seeing it as an implicit rebuke of the zero-COVID policy championed by Xi (Creaders.net, May 19). However, Xi’s decision to go without a mask during his Sichuan tour suggests not so much a tit-for-tat with Li, but an effort to convey health and confidence at a moment when long suppressed frustration with his leadership is increasingly evident.
On a visit to an advanced rice farm in Meishan City to learn about experimental rice planting and breeding, Xi emphasized that he attaches great importance to food safety and production (Dangjian, June 13). Based on Xi’s remarks, state media ran a series of pieces announcing a new “great country ‘grain’ policy” (大国“粮”策, daguo “liang”ce). The significance of putting the word “粮”(liang) in quotes is in substituting the first character of 良策 (“good policy”- a common term) with the homonym 粮, a double entendre with the implication being that this agricultural policy is indeed a “good” one. Hence, the policy stresses the key role of agriculture in attaining a more prosperous and productive society, emphasizing the application of advanced technology including planting high-yield grain strains, and effective agricultural management business practices to achieve bumper harvests (Xinhua, June 15). The 14th five year plan (2021-2025) already emphasizes boosting domestic agricultural production through implementing supply-side structural reform, ensuring effective sustainment of national farmland of at least 120 million hectares, and fostering technological innovation (Fujian Provincial Government, August 9, 2021). Nevertheless, the new grain policy provides additional impetus as the PRC closes in on its longstanding goal of achieving self-sufficiency in key grains such as wheat and rice. A 2021 report by the Chinese Academy of Agricultural Sciences and International Food Policy Research Institute found that China will be 99.3% self-sufficient in the production of staple grains including wheat and rice by 2025 (Jingji cankao bao, May 25, 2021).
A Doctrine of Self-Reliance
Efforts to achieve self-sufficiency in the agricultural sector are part of a broader series of policy measures that seek to make China more self-sufficient, and to rely primarily on the domestic economy as the engine of growth. The current five year plan formalizes Xi’s dual circulation policy to reorient China’s economy to become more self-reliant on its domestic market not only to provide resources and technology, but also to stimulate demand (China Leadership Monitor, September 1, 2021). Dual circulation dovetails with other efforts to achieve greater self-reliance including the push to internationalize the Yuan and create a digital currency so as to reduce dependence on the international financial system; promotion of indigenous technological development and innovation through the Made in China 2025 Initiative in order to obviate reliance on foreign technology; and leveraging of domestic enterprises to achieve a world class military through Military Civil Fusion.
In addition to seeking to boost domestic agricultural production, the push for self-reliance appears focused on two other areas this year: leveraging internal infrastructure development to foster indigenous technological development and boost domestic demand; and developing domestic energy production in pursuit of energy security and independence. At a Central Financial and Economic Affairs Commission on April 26, Xi announced a new “all-out” push to increase construction of infrastructure, which he asserted is essential to bolstering economic and social development. According to Xi, this is because infrastructure construction is vital to “ensuring national security, smoothing domestic circulation, facilitating the ‘dual circulation’ of domestic and overseas markets, expanding domestic demand and promoting high-quality development” (CCTV, April 27).
Energy production is another area where the PRC has sought to bolster its self-sufficiency due to high global demand and tight supply, and concerns about threats to its energy security and international supply lines. For now, the PRC appears to be addressing this problem by stockpiling coal (Beijing has pledged that its coal usage will peak in 2025), and seeking new sources of energy by developing both its extractive and renewable energy capacities (CGTN, March 30; Global Times, November 30, 2021). On the former front, China has substantially increased its offshore drilling activities and currently manages 61 platforms that operate at water depths exceeding 3,000 meters (CGTN, June 12). Earlier this month, China National Petroleum Corporation (CNPC) announced it had made two new breakthroughs in offshore drilling — setting up Asia’s highest deep-water offshore jacket in the South China Sea, and laying over 100 kilometers of pipeline for Bangladesh’s first offshore project, which was undertaken through the Belt and Road Initiative (Sina, June 11).
Mouths to Feed
Over the last two years, global food prices have risen approximately 55 percent (Deloitte, May 31). China, which emerged at the end of the last decade as the world’s largest purchaser of agricultural products with imports totaling $133.1 billion in 2019, is particularly vulnerable to these rising food costs (U.S. Department of Agriculture, September 29, 2020). As a result of skyrocketing food prices due to the war in Ukraine, China has even had to temporarily stall its efforts to diversify away from U.S. agricultural imports and has recently increased its corn and soybean purchases (South China Morning Post, April 25). This underscores that the current supply shocks in the global food market have imposed difficult choices on Beijing and highlights the importance of boosting domestic agricultural production.
The announcement of the new “great country ‘grain’ policy” was accompanied by a China Central Television (CCTV) video that tells the story of a genetically modified “tiny [wheat] seed” (小小的种子, xiao xiao de zhongzi) (CCTV, June 14). The seed goes from research laboratory to farm and becomes wheat that is transformed in to noodles, which make their way to restaurants, kitchen tables, and even the distant Chinese space station. The propaganda video then turns metaphorical, likening the Chinese people to the “tiny seeds” that become great stalks of wheat in a bountiful harvest, providing a broader vignette of the intimate connection between food production and national prosperity. The video closes on a common theme espoused under Xi that China’s current relative prosperity has only been accomplished through great effort, self-reliance and striving, which must be sustained: “We can live in this age of abundance, free from hunger only because generations of Chinese have watered the earth with painstaking efforts.”
On June 14, Sichuan Daily carried an editorial that was widely shared by other state media outlets entitled “Thoroughly study and implement the spirit of key instructions during General Secretary Xi Jinping’s visit to Sichuan, keep the bottom line of food security and make every effort to stabilize economic growth” (People.cn, June 15). The article notes that the Deputy Party Secretary and Provincial Governor of Sichuan Huang Qiang (黄强) recently inspected soybean and corn farms in Anyue county to learn how to better implement Xi’s directives, and pledged to take measures to “resolutely curb” the “de-agriculturalization” (非农化, fei nonghua) of farmland.
On June 15, the Ministry of Agriculture issued a statement that although winter and fall planting got off to a poor start, a strong recovery has been made this spring, and the situation has improved dramatically with a strong harvest in store for this summer and fall (People.cn, June 15). The Ministry of Agriculture credited the turnabout to: 1) effective scientific disaster prevention and mitigation, which helped to overcome the damage caused by unprecedented autumn flooding last year; 2) effective implementation of central directives at all levels, such as increasing the application of green fertilizer; and 3) planting and cultivation of high-quality wheat varieties — Zhongmai 578, Zhengmai 379, and Xinong 511 — in order to achieve high-yield production levels on par with advanced European producers.
Conclusion
The immediate drivers of the PRC’s efforts to attain greater self-sufficiency in food and energy are the imperatives to ensure steady supply, and safeguard economic and political stability at a moment of intense international upheaval. However, over the longer-term, decreasing the PRC’s reliance on foreign food and energy sources helps to insulate the Chinese economy from potential sanctions and interruptions to its supply lines, which could occur if the geopolitical struggle with the U.S. and its allies continues to escalate.
No comments:
Post a Comment