Abstracts of AARC Working Papers
No.41, 12/07 Determinants of beef consumption in China
China has experienced rapid economic growth over the last 27 years. As per capita income has increased, household consumption has become greatly diversified; many new products have entered the market. Beef as a meat product is slowly gaining ground relative to the more traditional pork products.
With working paper 39 dealing with meat consumption in general, this paper focuses on factors affecting beef purchasing decisions in China. Using probit regression analysis, the effect of socioeconomic and demographic characteristics was estimated as well as other influences on preferences as they affect beef purchasing decisions.
The relatively high price of beef (34%) and consumers' unfamiliarity with its cooking method (26%) are the main limitations for beef consumption when compared with other meats, followed by 'don't like the taste and smell' which shows that compared with pork, beef is still relatively new to Chinese consumers and some of them are not used to the flavour of beef products. The characteristics of target consumers who show a preference towards beef are: residents of urban areas, a small family or a family with more than average males over 16 years old, the young (below 45 years old) and well educated, possessing a good income and considering safety, price and ease of preparation as important purchasing criteria.
No.40, 12/07 Determinants of meat consumption in China
The remarkable economic changes occurring within the People's Republic of China since 1978 have resulted in striking alteration in food consumption patterns, and one marked change is the increasing meat consumption. Given China's large population, a small percentage change in per capita meat consumption could lead to a dramatic impact on the production and trade of agricultural products. Such changes have major implications for policy makers and food marketers.
This paper focuses on both at-home and away-from-home meat consumption in China, aiming to provide a deeper insight into the changing meat consumption patterns and their determinants in China. Data were collected in 2005 from two separate consumer surveys - one urban and one rural. A censored linear approximate Almost Ideal Demand System (LA-AIDS) model was employed in the study, and major economic parameters were estimated for different meat items. A Tobit model for away-from-home meat expenditure, and a system of multivariate Tobit equations were estimated. This enabled an examination of the links between at-home and away-from-home meat consumption. Moreover, it may be more important than it seems, and under-recording of away-from-home consumption could partly explain the widening gap in official statistics between China's livestock production and meat consumption.
AARC Working Paper 40 is going to provide a deeper insight into the specific beef consumption patterns in China.
No.38, 10/04 China's Grain Trade: Recent Developments
This paper examines some recent developments in China’s grain trade. In the first section, the patterns of domestic grain trade are highlighted. In section two, developments in China’s grain import and export are presented. The final section provides concluding remarks.
No.37, 09/04 Trend in China's Grain Production
Grain is China’s most significant agricultural product, its output being the most watched indicator by government officials, traders and researchers both inside and outside China. In this paper, China’s grain production trends in the last decade are examined. To understand China’s grain production and how its trend evolves, it is useful to appreciate the characteristics of China’s grain production (Section 1). In Section 2, the changes in total grain output and in grain crop composition is examined. Section 3 highlights the dynamics in regional distribution of grain production and Section 4 presents the dynamics in production technologies and costs. In Section 5, a number of emerging issues are addressed that are likely to affect future grain production.
No.36, 08/04 China's Grain Policy: Retrospect and Prospect
Because of China’s limited agricultural resources but huge demand for grains, the Chinese government has assumed a major role in setting the nation’s grain policies. China’s grain policies have experienced some major changes in the recent decade. Developments in China’s grain policies have enormous implications not only on China’s domestic grain trade but also on the international grain market. This paper reviews China’s grain policy since the early 1990s and projects its prospects in the near future. It traces the evolution of major components of government grain policy and institutional arrangements and examines changes in major variables that are likely to influence China’s grain policy in the future. Based on examining the past developments of China’s grain policy and conjecturing its future prospects, the paper points out that the key objective of China’s future grain policy will still be to achieve national food security. China’s grain policy will also increasingly accommodate the needs for (1) raising farmer income and reducing poverty incidence, (2) fulfilling commitments made to WTO to further opening up its grain market, and (3) protecting the environment and natural resources. The paper also addresses key areas to which the Chinese government needs to pay increasing attention in order to achieve the objectives of its grain policy.
No.35, 02/04 Animal Product Consumption in China
How much animal product do the Chinese consume at present? How much animal product will the Chinese consume in the near future? Plausible estimates that can answer these questions seem to be extremely scarce. On the other hand, there has been strong demand for such estimates by many in trade and government departments who are concerned about China’s livestock industry development and animal product market potential but are puzzled by the fact that China’s consumption of animal products only accounts for about 40 % of their availability. We believe that the present level of animal product consumption in China is underestimated, which subsequently causes enormous difficulty in projecting China’s future animal product consumption. This paper contributes to the literature by estimating a set of animal product consumption levels for China at present and in the near future. It first derives the present level of animal product consumption in China by establishing a production-consumption balance sheet. Based on this adjusted consumption level, the paper then projects likely scenarios of China’s animal product consumption in 2010 by considering the key factors that may affect China’s future animal product consumption.
No.34, 12/03 Beef Supply Chains in Australia: Implications for Korean Beef Industry
Australia has over time developed a 'whole of beef supply chains' approach involving the production, processing and distribution sectors to provide consistent high quality beef to consumers both domestically and overseas. The Australian beef supply chains have proved to be effective, which in turn have contributed to the further development and success of the beef industry. The Australian experience in developing and managing its beef supply chains can be of great relevance to beef industries of other countries. This paper highlights the development and management of the Australian beef supply chains and draws implications for the future development of Korean beef industry.
No.33, 10/03 Feed versus Food: The Future Challenge and Balance for Farming
Demand for livestock products in the past three decades has increased rapidly, especially in developing countries. This increase has resulted in, and will continue to cause, increased demand for feed. This paper examines existing projections of global feed demand and supply with an emphasis on China. It first presents the emerging trends in demand for feed and food, followed by global perspectives of feed demand and supply. It then highlights the challenges facing future farming in its endeavour to meet the increasing demand for feed. Finally, the paper sheds light on whether the livestock revolution will offer much opportunity to farmers, especially small farmers in the developing countries and those at home in Australia.
No.32, 10/03 Regional Feedgrain Demand and Supply in China: Possible Scenarios after the WTO Accession
Regional Feedgrain Demand and Supply in China: Possible Scenarios after the WTO AccessionDespite increased research on China's feedgrain demand and supply issues, previous research has primarily focused on the feedgrain market at the national level. Little effort has been made to examine the feedgrain market at the regional level. Using a non-linear spatial equilibrium model, this paper examines changes in regional feedgrain demand, supply, and regional trade flows by simulating internal trade liberalisation, technological improvement in feedgrain and animal production, income growth, and livestock export growth. The findings suggest that China would gain if the government takes measures to eliminate restrictions on inter-regional movement of feedgrain. While technological improvements in feedgrain production will increase both feedgrain supply and demand and reduce feedgrain price, technological improvements in animal raising will reduce feedgrain supply, demand and price. China's feedgrain market development will also depend on China's economic growth increased consumer income will lead to increased demand for animal products and hence feedgrains. If China can expand livestock exports, demand for feedgrain will increase and regional feedgrain trade patterns will also change.
No.31, 07/03 China's Experience with Agricultural Cooperatives in the Era of Economic Reforms
Agricultural cooperatives have been an important means through which farmers get themselves organised. As in many other countries, agricultural cooperatives in China have been used as a way to get farmers organised and once received strong favour in the mid 1950s. This paper addresses issues related to China's agricultural cooperatives with an emphasis on cooperative development in the era of economic reforms.
No.30, 05/03 Feedgrain and Foodgrain Consumption in China: Emerging Trends and Trade Implications
Feedgrain and Foodgrain Consumption in China: Emerging Trends and Trade ImplicationsAs Chinese consumption of feed-related food increases, demand for feed and hence feedgrain has attracted a lot of attention both inside and outside China. This is not only because of food security concern but also due to the potential implication for international trade given the sheer size of the Chinese market. This paper deals with some of the issues associated with China's demand for feedgrain. In particular, it sheds light on the relationship between feedgrain requirement and foodgrain consumption in China. It especially focuses on examining the impact of economic growth and demographic changes on demand for feedgrain in the near future. The findings are used to draw implications for international grain trade.
No.29, 04/03 Agricultural Trade Liberalisation and Development of World Feedgrains Market: Implications for China and Australia
Agricultural Trade Liberalisation and Development of World Feedgrains Market: Implications for China and AustraliaIn view of China's rapid increase in animal production and the commonly held view that China's ability to increase feedgrains is limited, it is useful to examine China's feedgrian international trade prospects in a broad context. This has become even more important given that China is now a member of the WTO and its trade will be more affected by the international market and by the reforms in international trade arrangements. In this paper, with the aid of the GTAP model, a simulation exercise is carried out to evaluate quantitatively how the world feedgrain market will change under different scenarios of trade policy reforms in general and how China's feedgrain trade may be affected by such reforms in particular. According to the simulation results, (1) China is likely to turn from being a net exporter into a net importer of agricultural products after WTO accession; (2) the volumes of China's feedgrain trade as well as some other major agricultural products will remain relatively small in terms of their shares in domestic trade and in world trade; (3) the removal of existing trade distortions by major developed countries will strengthen China's competitiveness in some agricultural products such as animal products and coarse grains; and (4) there is potential for further expansion of bilateral agricultural trade between China and Australia but this prospect is dependent upon policy reforms of other major players in the world market. Implications are discussed.
No.28, 03/03 China's Feed Industry: Developments and Trends
In the past two decades, China's feed industry has grown rapidly and has become an important industry in China. It is now the second largest in the world. Given that feedgrains constitute a large portion of feed products, it is useful for any feedgrain demand and supply studies to look into major issues that are related to China's feed industry development. In this paper, we highlight major aspects of China's feed industry and point out major challenges that it faces. We will also look into the development prospects of this industry.
No.27, 10/02 China's Feedgrain: Production, Trade and its Usage in the Feed Industry
Based on analysis of domestic production conditions, the status of imports and exports and the market changes of China feedgrain in recent years, this paper reviews the structural change in demand and supply of feedgrain in Guangdong Province, the increasing trend of feedgrain consumption of the Hope Group in China, and analyzes the reasons for China's feedgrain market development. The way forward for the development of China's feedgrain market is pointed out, namely that production may become regionalised and specialised with improved quality, imports may be increasing, market prices may have the trend of steadily decreasing, and feedgrain consumption will continue to maintain vigor.
No.26, 10/02 Developments and Trends in Household Animal Raising Practice in China: A Survey Report
Due to the dominant role of household animal raising in China's animal production, an improved understanding of household animal raising practices is essential to study China's feedgrain markets. Rural household surveys were conducted in several regions in China to examine issues related to household animal raising practices such as animal raising scale, feed composition, sources of feed and feeding efficiency. This paper reports the findings from these surveys. Implications of the survey findings are discussed.
No.25, 08/02 Developments in China's Animal Husbandry Industry
In the past two decades, China has merged as the largest animal product producer in the world. In view of its huge population and the growing economy, changes in China's domestic demand for animal products will have further influence on the development of China's livestock industry and will also inevitably impact on the world animal product market and feedgrains market. Further, the recent WTO accession is also expected to generate significant impacts on the development of China's livestock sector. While the removal of non-tariff barriers and the reduction of tariff rates applied to animal products will place domestic producers under intensified pressure to competing with imports, the accession may lead to increased export opportunities as well. Thus, it is relevant and important to fully understand how China's livestock industry has evolved in the past but more importantly how this industry will develop into the future. This paper presents an overview on the development of China's livestock industry. It highlights the performance of China's livestock industry in the past two decades and identifies key factors that have contributed to the development of this industry. It also addresses major issues that are likely to affect future development of China's livestock industry.
No.24, 07/02 How Much Animal Product Do the Chinese Consume? Empirical Evidence from Household Surveys
Reliable information about animal product consumption in China is extremely important for policy formulation and marketing activities. However, publications by China's State Statistical Bureau underestimate animal product consumption. Such underestimated statistics affect policy making and marketing initiatives and also lead to the estimation of distorted parameters that are crucial for other research work. Based on a large-scale household survey, this paper presents findings on animal product consumption in China. Our results show that the consumption of animal products in China has reached a much higher level than was previously held and the SSB statistics underestimate this consumption by as much as 30 to 60%. The paper also identifies the major factors that affect animal product consumption in China. Implications of the findings are discussed.
No.23, 05/02 China's PSE: Are Chinese Farmers Subsidised?
Measuring the level of policy support to agriculture in China is complicated not only by the lack of adequate data and policy information, but also by the nature of the semi-subsistent agricultural economy and by the prevalence of rent-seeking behaviour of many policy-implementing bodies. This paper argues that, due to such complications, measurements of the level of support may be distorted when applying OECD's methodology to China. Hence, in this paper, we propose some modifications to the OECD approach. Using the revised methodology, some major indicators of support for the period of 1990 to 2000 are calculated and compared with the standard treatment. Our results suggest that if the semi-subsistent nature of rural households is disregarded, policy-related income transfers tend to become exaggerated. Such effects can be substantial for developing countries, which are commonly characterised by their large agrarian economies. Leakage of policy benefits to rent-seekers is probably large as well due to weak social institutions in such countries. Consequently, policy supports to agriculture in developing countries are often nominal rather than real, as has been the case in China in recent years.
No.22, 04/02 Animal Raising Behaviour in China's Major Pig-raising Regions: the Case of Sichuan Province
Due to the dominant role of household animal raising in China's animal production, an improved understanding of household animal raising practices is essential to study China's feedgrain markets. This paper reports the findings from a rural household survey we conducted recently in a traditional pig-raising region of China. It was specially designed to examine issues related to household animal raising practices such as animal raising scale, sources of feed, composition of feed and feeding efficiency. Discussed also are implications of the findings on China's regional feedgrain markets.
No.21, 04/02 Animal Raising Behaviour in China's Less Developed Regions: The Case of Henan Province
Due to the dominant role of household animal raising in China's animal production, an improved understanding of household animal raising practices is essential to study China's feedgrain markets. It is also noted that the level of local economic development affects animal raising practices and the development of feedgrain markets. This paper reports the findings from a rural household survey we conducted recently in a less developed province of China. It was specially designed to examine issues related to household animal raising practices such as animal raising scale, sources of feed, feed composition and feeding efficiency in an economically less developed area. Discussed also are implications of the findings on China's regional feedgrain markets.
No.20, 12/01 The Emerging Dairy Economy in China: Production, Consumption and Trade Prospects
Currently per capita consumption of dairy products in China is low. In view of China's strong economic growth and the resulting higher consumer income, whether this would represent a great market potential for dairy products has drawn much interest from the dairy industry both within and outside China. This paper overviews China's dairy market with up-to-date information and highlights important factors affecting its development. The study shows that the growth of demand for dairy products in China is promising. However, despite the fact that China's accession to the WTO will result in reductions in trade barriers, a substantial increase in exports of dairy products to the Chinese market is unlikely in the near future. This is due to a number of reasons including taste differences between the Chinese and the consumers of those major dairy exporters. Increased understanding of the Chinese dairy markets and increased attention to modifying their products to suit the tastes of the Chinese are essential for dairy exporters to succeed in the Chinese market.
No.19, 11/01 Household Animal Raising Behaviour in China's Developed Regions: The Case of Zhejiang Province
Due to the dominant role of household animal raising in China's animal production, an improved understanding of household animal raising practices is essential to study China's feedgrain markets. It is also noted that the level of local economic development affects animal raising practices and the development of feedgrain markets. This paper reports the findings from a rural household survey we conducted recently in a China's coastal and developed province. It was specially designed to examine issues related to household animal raising practices such as animal raising scale, sources of feed, feed processing and feeding efficiency in a developed area. Discussed also are implications of the findings on China's regional feedgrain markets.
No.18, 11/01 Beef Consumption, Supply and Trade in Korea
Until recently the Korean beef market was heavily protected. However, since the beginning of 2001 there have been significant changes to the protection of this market. In January 2001 beef import quotas were lifted and replaced by an import tariff. The dual retail system - where domestic and imported beef are sold separately - was abolished in September 2001 and now domestic and imported beef can be sold in the same outlet. In addition, any retailer is now permitted to sell imported beef. As a major beef producer and exporter, Australia can benefit from the changes in the Korean beef market. In this study, we examine beef consumption trends in Korea; Korea's beef cattle production and its beef supply potential; beef import prospects; likely responses in the Korean beef industry as a result of the beef import tariffication; and beef trading arrangements in Korea. We also draw implications on how the Australian beef industry may capitalise on the opening up of the Korean beef market.
No.17, 10/01 Household Animal Raising Behaviour in China's Feedgrain Surplus Regions: The Case of Jilin
When studying China's feedgrain demand and supply, one of the major challenges is related to the diversity and complexity of animal raising practices. Broadly, there are three major animal raising practices in China: feedlot, specialised animal raising household, and traditional very small-scale backyard animal raising. The latter two animal raising practices still together occupy an important share. An understanding of household animal raising practice is therefore essential to study China's feedgrain demand and supply and this can be best done through field surveys. In this paper, we report the findings from a rural household survey in a northeast province of China. The survey was specially designed to examine issues related to farm household animal raising, such as the sources of feed, the use of bought feed and feed conversion ratios. The implications of the findings on policy issues are discussed.
A better understanding of the development of part-time farming in China would be invaluable both for academic inquiry and policy formulation. This study, using farm-level survey data, examines the development of part-time farming in China. The two key questions examined are: how part-time farming evolves over time and how part-time farming may be related to regional economic development. This study also highlights part-time farming in Japan and Korea and compares China's with them. Given the many similarities in agrarian arrangements between these three countries, it should be valuable to examine part-time farming and related policy issues in China with a reference to Japan and Korea.
No.16, 06/01 Changing Patterns of Feedgrain Production and Marketing in China
Increased disposable income has, in the past two decades, led Chinese consumers to demanding more animal products. China's animal husbandry industry has responded to this demand by producing more animal products. Indeed, not only has this increase in animal products been very impressive in recent years, but it has been achieved with little feedgrain imports. The question as to whether China's domestic resources will be able to continue supplying the animal husbandry industry with the needed feedgrains has attracted much attention from government officials and academics both within and outside China. Many believe that China's future demand for feedgrain will exceed its supply and imports are inevitable. Among the many factors that affect the quantity of feedgrain that China will import are two important ones: China's own capacity to produce and its feedgrain marketing arrangements. It is thus imperative to examine closely the changing patterns of China's feedgrain production and marketing. This paper fulfils this task by providing some important facts and updating information of the latest developments that are related to China's feedgrain production and marketing.
No.15, 04/01 An Issue of Debate: China's Feedgrain Demand and Supply
In the past decade or so, China's feedgrain demand and supply has attracted increased attention from both academia and government departments within and outside China. In this paper, we examine when and how China's feedgrain demand and supply became a topical issue and why it is important. We will highlight, from earlier studies, key findings regarding how much feedgrain China will demand and whether China can supply the amount demanded. We will also elaborate on the reasons for the vast discrepancies in China's feedgrain research findings and discuss the problems and difficulties encountered in studying China's feedgrain issues. The paper concludes by pointing out the areas where further research efforts are needed.
No.14, 12/00 China's Joining the WTO: Opportunities for the Australian Agribusiness Sector
When China gets accepted to the WTO, a market with 1.3 billion consumers will be more widely open to the rest of the world. This represents enormous market opportunities for exporters and investors of many other countries. What, then, is in it for the Australian agribusiness sector? What opportunities may Australia expect? What are the likely challenges Australia may encounter? In this paper, after briefly describing China's preparation for joining the WTO, we highlight the changes that are likely to take place in the market environment after China joins the WTO. We then attempt to identify areas where opportunities may exist for the Australian agribusiness sector to gain increased access to the Chinese market and where cooperation may be possible between the Australian and Chinese agribusiness sectors. We will also point out possible challenges and competition facing the Australian agribusiness sector in the Chinese market. We conclude this paper by addressing some issues that need to be taken into account for the Australian agribusiness sector to be successful in the Chinese market.
No.13, 12/00 Wheat Economy of India: Development, Nature and Trade Prospects
Wheat production in India has increased by over ten times in the past five decades and India has become the second largest wheat producer in the world. Today wheat plays an increasingly important role in the management of India's food economy. However, studies that research the wheat economy of the country as a whole remain scarce. This present study examines the characteristics and developments of India's evolving wheat economy. It seeks to answer questions such as, what is the nature of India's wheat economy? Will the production be able to keep pace with consumption growth? What are the prospects for international trade? Our analyses show that India's wheat production increase is driven principally by yield growth, and to some extent by shift in production from other crops to wheat and an increase in cropping intensity. Among the major factors that affect yield, fertiliser use appears to have less effect in recent years while expansion in irrigated and high yielding variety (HYV) area seem to play a more important role in raising yield. However, with irrigation and HYV having already reached 85-90 per cent area coverage for wheat, future growth in wheat production will be constrained. On the other hand, the demand for wheat is likely to grow fairly rapidly. Depending on the population and income growth, poverty alleviation and the rate of urbanisation, a demand-supply gap may open at a rate of about 1 to 2 per cent per year which is equivalent to 0.7 to 1.4 million tonnes of wheat, growing larger over the years. Promoting rapid economic development and income growth in India which embraces the poor, and particularly the rural poor, may lead to considerable growth in demand for wheat and thus an expansion in trade opportunities.
No.12, 12/00 Part-time Farming Trends in China: A Comparison with the Japanese and Korean Experience
No.11, 06/00 Changing Patterns of Wheat Production and Consumption in China: Trade Implications
In the 1980s and early 1990s, wheat imports accounted for about four-fifths of China's import of cereals, and imported wheat accounted for about 30 percent of commercial supply. As a result of the recent breakthrough in China's WTO accession negotiations as well as many recent developments in the Chinese government's policy on wheat production and marketing, how the Chinese wheat market will evolve presents an interesting and important area for policy makers and major wheat trading companies both within and outside China. In this paper, we highlight recent changes in China's wheat production and consumption patterns and marketing arrangements. Then, by taking into account the likely government policy scenarios, we analyse implications of such changes on wheat market development in China and on wheat trade in the international market.
No.10, 08/99 Supply Response of Marketed Surplus of Grains in China: A Tobit Analysis
When grain production is largely subsistence in nature, information as to how farmers dispose of their grains is of great value for policy formulation. Of special importance is the amount of surplus grains that are actually marketed, because the availability of an adequate level of the marketed surplus grains is crucial in promoting and sustaining the economic development of a country. This study, using farm-level survey data, examines factors affecting the level of the marketed surplus of grains in China. It is found that output price, crop output level, family net non-grain income, family size, and local market development level, are all important factors that influence the size of the marketed surplus of grains. It is also found that farm households tend to reduce grain sales over time and that there exist significant regional variations in farmers' grain disposal behaviour. Policy implications are explored.
No.09, 04/99 Australian Barley Prospects in China's Growing Brewery Industry
Available records indicate that China imports about half Australia's total exports of malting barley and is Australia's major market. Increasing demand for malting barley in China, due to increasing demand for beer, indicates a potential market of about 1 to 1.5 million tonnes of malting barley imports. Australia has renewed its efforts in plant breeding, quality control and industry deregulation in order to improve quality and ensure its future competitiveness in world malting barley markets. Growth in production of malting barley in Australia, which could help satisfy Chinese demand, will depend mainly on these initiatives as well as the world price being attractive enough compared with wheat, its main competitor for cropping land in Australia.
No.08, 03/99 Urban Consumer Attitudes to Beef in China
The ability of domestic and foreign entrepreneurs to market beef in China is not related to a simple economic equation between supply and demand. It is essential to understand the attitudes of Chinese people to beef. These attitudes arise from traditional and historical experiences, as well as social and cultural understandings. Current consumption patterns of beef, in China, are also affected by recent history, social migrations, recent urbanisation and living conditions. The data on which this paper is based is not exhaustive. It raises some issues which previous reports seem to have overlooked. The societal questions it develops need future thorough research before a confident marketing initiative for beef in China can be undertaken.
No.07, 10/98 Estimating Supply Response of Marketed Surplus of Grains for China
China's grain production is still largely of a subsistent nature, with some 65 percent of grain output being consumed by farmers themselves. A continued and increased supply of surplus grains from producers to the non-grain producing population is of crucial importance for China to sustain its high rate of economic growth. Studies on marketed supply response can help the Chinese government choose policy instruments to encourage greater production and market supply of grains. This study, using farm-level data from China, estimates the supply response of the marketed surplus of grains at the village, provincial and national levels. Results confirm that farmers are responsive to grain prices in general but more so in major grain-producing regions or economically less developed regions, and that higher output will increase market supply of grains. As expected, farmers' own consumption has a significant negative impact on the supply of grains to the market. Policy implications are explored.
No.06, 09/98 China's Feed Grain Market: Development and Prospect
The future growth of demand for grains in China is expected to be driven mainly by the growth of feed grain demand. Many studies suggest that continued population growth and high incomes will lead to a sustained increase in consumption of animal products, while scarce land and water resources will limit expansion in grain production, leading to growing pressure for increasing grain import. With the recent adjustment of official statistics by the Chinese government, it is apparent that these forecasts are likely to over-estimate demand for animal products and hence feed grains, and under-estimate potential for yield improvement. This paper analyses the real situation of China's feed grain and animal product markets and the policy options faced by the Chinese government. The major conclusion is that the requirement for feed grains will be determined by the quantity of animal products produced, the methods used, the price of feed sources, the price of animal products and government policy.
No.05, 08/98 Price Linkages in the Chinese Grain Market
China has carried out reforms on the grain marketing system for nearly two decades. The transportation facilities and market information system have also been improved significantly with the development of the national economy. It is interesting and important to examine how well China's grain marketing system works as a result of the reforms. This paper evaluates the functioning of the grain marketing system by analysing the price linkages between China's producer market and consumer market and between domestic market and the world market. Cointegration tests and Granger-causality tests are applied to the recent monthly price data for wheat, indica rice, japonica rice and corn. It is found that cointegration relationships do exist between different markets. However, results suggest that, under the present marketing regime, the domestic prices are more unstable than the world prices. While the determination of domestic prices seems to be efficient, their slow adjustment in correcting discrepancies from equilibrium price relations deserves further attention.
No.04, 07/98 Current Situation and Prospect of the Chinese Barley Market
China's strong economic growth and the rapid increase in per capita income since the late 1970s has pushed up demand for barley, primarily due to a rapid expansion of the beer industry. However, the domestic supply has not been able to meet the high demand for barley. As a result, China has become one of the largest barley importers in recent years. Australia is now the major supplier to China for malting barley. This paper examines the current situation of China's barley market and discusses the major issues related to its development. The prospect of China's trade position in the future and the likely impact on the world barley market are then analysed. It is recognised that while potential does exist for China to expand its barley production using domestic resources, its current marketing arrangements represent some impediments for this development. This deficiency is expected to be removed with further reforms of the marketing system. In the longer term, China is likely to remain as a major importer of malting barley, a situation which gives Australian barley producers a promising future. However, further expansion of the Chinese market requires Australian producers to maintain their competitiveness in prices and quality.
No.03, 08/97 Present Situation of Agribusiness in China
Agribusiness is still a new concept in China, although its development represents one of the major aspects of success brought about by China's policy reforms in the past two decades. The agribusiness system in China is undergoing dramatic changes in response to the restructuring of the Chinese economy and to the changing pattern of the world trade. The reform policies has resulted in an enhancement of integration between the farm and non-farm sectors, and between domestic economy and the world market. While the demand for agribusiness products is growing, the domestic suppliers are now facing severe competition among themselves and from foreign rivals.
The agribusiness system in China is administrated by a number of government branches. Consequently, the statistical information is fragmentary. This paper attempts to give a complete presentation of the current status of China's agribusiness system and the major problems in its development. It should be noted that the concept of agribusiness sector is not rigorously defined in this study. The presented information is based on available statistics from different sources with variation in the coverage.
No.02, 12/96 China's Grain Supply Response in the Era of Economic Reforms
In many developing countries food self-sufficiency is considered of overwhelming importance. Policies which could encourage greater production of food crops are sought and the formation of these policies necessitates supply response studies on food crops. While many such studies have been carried out for various developing countries, studies of this kind for China are limited. In this paper we examine grain supply response for China. A farmer's land allocation decision model in China is first presented in order to show the relationships between external factors and grain supply. We then provide an overview of developments in the Chinese grain economy in recent years, which lends us insights as to how these changes might have affected farmers' returns from grain production and hence their decision for producing grain. Finally we estimate grain supply response for China using pooled cross-sectional time-series data. The empirical evidence indicates that, besides weather conditions and technological changes, prices are important determinants of grain supply in China. Policy implications are discussed.
No.01, 11/96 Integration of Rice Markets in China (Abstract)
Since the 1950s, the Chinese government has opted to intervene in the grain markets. However, the degree and scope of the intervention have been significantly reduced in recent years. Free grain markets have been officially allowed since 1979, which has led to a rapid increase in the private grain sector. Further measures were undertaken by the government to reduce its intervention in the mid 1980s and in particular in the early 1990s, culminating with the abolition of the "unified grain sale system" in 1993. As a result of these developments, it is interesting and important to test for spatial market integration. Using cointegration approach and monthly japonica rice data, this research examines the integration of rice markets in China in recent years. The study indicates that there is generally a lack of integration in the Chinese japonica rice markets. Reasons for the weak integration are complex and are addressed. Policy implications are discussed.