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China Announces Agricultural Trade Deficit

posted on February 25, 2005


A World Bank economist said this week that the success of the current round of global trade talks could lift millions of Chinese farmers out of poverty. He says China's entry into the World Trade Organization helped bring new jobs to urban areas of the country. But he adds that trade barriers actually have led incomes to decline even further on some of the poorest Chinese farms.

China is among a group of developing nations pushing for reduced farm subsidies in rich nations, like the United States. The Chinese claim the subsidies help prevent farm goods in poor nations from reaching lucrative markets.

Throw in certain domestic problems, and the farm export picture for places like China can turn sour in a hurry.

China Announces Agricultural Trade Deficit While China is the world's largest producer of agricultural products, its 1.3 billion people own the distinction of being the world's largest consumers as well. With 20 percent of the earth's people depending upon 10 percent of its arable land, it's becoming evident that China is struggling to sustain itself.

That fact was driven home this week when the Ministry of Agriculture announced that China posted a trade deficit of $4.6 billion in 2004. According to the Chinese government, the deficit was caused by tight local supplies and an influx of agricultural goods.

Typically, China is a net agricultural exporter. As recently as 2003, the Chinese enjoyed an agricultural trade surplus of $2.5 billion. But domestic supplies declined in 2004 leading to a surge of imports.

China is the world's largest consumer of corn, (pause) oilseeds (pause), wheat (pause), rice (pause), cotton (pause) and pork.

While the country recorded an agricultural trade deficit in 2004, the Chinese enjoyed an overall trade surplus of nearly $32 billion.


Tags: agriculture China deficit economy markets news trade