Washington, DC – The rise of trade protectionism and antiglobalism around the world pose a considerable threat to global food security and nutrition. Two new reports launched in Beijing today provided critical analyses on the impact of trade disputes and protectionism on US and Chinese economies.
Despite the challenging current environment, China and many other countries continued to make progress toward a sustainable future through greater economic integration and commitment to ending poverty and malnutrition, according to the International Food Policy Research Institute’s (IFPRI) 2018 Global Food Policy Report, launched in Beijing today.
In July 2017, China issued a new National Nutrition Plan for 2017–2030 that sets nutrition and health goals for anemia, stunting, and breastfeeding. At the 19th CPC National Congress in October, China pledged to pursue a rural vitalization strategy, prioritizing the development of agriculture and rural areas in the coming years.
“Increased country-level commitments to sustainability and nutrition are among the most important drivers of change,” said Shenggen Fan, director general of IFPRI. “We need more champions in both developed and developing countries to maintain the momentum to meet the ambitious Sustainable Development Goals.”
Each year, the Global Food Policy Report reviews major developments and events in food policy around the world. Despite strong economic recovery in 2017, global hunger levels increased, as conflicts, famine, and refugee crises persisted, and rising antiglobalism threatened to slow global progress on food security and nutrition. This seventh annual report explores the concerns raised by this trend and how global integration can be harnessed to benefit our global food system.
“It is encouraging that despite rising isolationism around the world, China is pursuing deeper regional integration and technology cooperation through initiatives like Belt and Road,” said Fan. “Policies that encouraged global integration through more open trade and knowledge sharing have been critical to recent unprecedented reductions in hunger and poverty.”
Deeper regional and global market integration remain a high priority in China, following 40 years of economic reform and opening that have expanded China’s role in international trade and investment. The Belt and Road Initiative provides engaged countries new opportunities to address infrastructure needs and enables China to strengthen economic connectivity and science and technology cooperation with these countries.
Fan emphasized how, amidst ongoing trade disputes, rural vitalization and the Belt and Road initiative are wise strategies for creating job opportunities, stimulating domestic demand, and reducing dependence on imports.
China now has the world’s largest middle class, with a growing demand for diversified and higher-quality diets. This growing demand, along with open trade policies, has boosted agricultural trade. In 2017, China imported 95.53 million tons of soybean—53 percent from Brazil, 34 percent from the US and 7 percent from Argentina. In 15 years, China has increased the diversity of its internationally traded food suppliers by 50 percent on average, from 9.4 to 14.5 countries. Trade also reduces the risk of overexploitation of natural resources. China saved substantial resources through trade, because imports allow the country to reduce local water, land, and fertilizer use.
The first-ever China Agricultural Sector Development Report, which was released by the Chinese Academy of Agricultural Sciences (CAAS) today at the same event, assesses the impact of US-China trade frictions, the Belt and Road Initiative, the food price support policy, and the environmental tax reform on China’s agricultural sector. Using the integrated GTAP (Global Trade Analysis Project) and China Agricultural Sector Model (CASM), developed by CAAS and IFPRI, the report examines China’s agricultural sector in the context of antiglobalization and supply-side structural reform, and provides policy recommendations.
The possibility of a US-China trade war, with agriculture on the front line, creates uncertainties for the agricultural sectors in both countries. The CASM helps researchers explore the effects of rising tariffs. Overall, a US-China trade war would have a considerable negative impact on both sides, and Chinese consumers may be affected by rising imported food prices. According to the model, tariff increase between China and the United States will lead to a significant reduction of total US agricultural products exports to China by about 40%, in particular, exports of US soybean, cotton, beef, mutton, and other grains will decline by nearly half. The prices of China’s imported agricultural products will rise slightly, for instance, soybeans and cotton prices will rise by 5.88% and 7.53%, respectively. Trade war may affect domestic production and consumption, and constrain overall economic development in both China the United States in the coming years.
“The relationship between China and the United States is highly complementary,” said Dr. Xurong Mei, CAAS Vice President. “Trade frictions will potentially bring negative macroeconomic impact that cannot be underestimated. Resolving trade disputes through dialogues and negotiations helps to avert a trade war and its damaging impact. Promoting economic and trade cooperation between China and the United States can create win-win outcomes for both nations.”
For more information on the report, click here: http://gfpr.ifpri.info/
The International Food Policy Research Institute (IFPRI) seeks sustainable solutions for ending hunger and poverty. IFPRI was established in 1975 to identify and analyze alternative national and international strategies and policies for meeting the food needs of the developing world, with a particular emphasis on low-income countries and on the poorer groups in those countries. www.ifpri.org.
The Chinese Academy of Agricultural Sciences (CAAS), established in 1957, is a national, integrative agricultural scientific research organization with responsibility for carrying out both basic and applied research, as well as research new technologies impacting agriculture. CAAS is dedicated to providing solutions to a wide range of challenges impacting agricultural development and supporting local rural economy. www.caas.cn/en