China’s Agriculture at the Crossroads by Yongzheng Yang, Weiming Tian (eds.)

By Yongzheng Yang, Weiming Tian (eds.)

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Grain net imports are projected at 92 million tonnes for the conservative income projection and 138 million tonnes for the optimistic income projection. Garnaut and Ma (1992), another Australian study, use estimates of price and income elasticities to project China’s consumption of food and feed grains by the year 2000. They project China’s per capita grain consumption to increase from 397 kilograms in 1990 to 421 kilograms by the year 2000 under a ‘normal’ growth scenario. (The difference in 1990 levels of grain consumption between the three studies is due to Garnaut and Ma using unmilled grain data while Mitchell et al.

The stable domestic market has created the much needed social and political environment for further reform. Past experience has proved that reform can be much more easily carried out during economic upturns. Second, the overall macroeconomic environment is also conducive to further agricultural reform. After several years of serious macroeconomic instability, China achieved high economic growth with low inflation in 1996 and 1997. This looks likely to be maintained if the government continues to follow prudent macroeconomic policy.

The lack of agricultural investment raises the question of the sustainability of China’s agricultural development. These problems are well recognised, but there is disagreement about the timing of further reform. This has more to do with political will than the economic environment. There are several favourable conditions for the acceleration of economic reform at present. First, the domestic agricultural market has stabilised after the price hikes in 1993 and 1994. The bumper harvests in 1995 and 1996 played a critical role in changing market conditions.

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