In this issue: China’s new food security law, Canada’s role in China amid food security concerns, Belt and Road and Five-Year Plan Monitor

China’s new food security law

An article in China-based Global Times notes that for the 19th year in a row agriculture, especially stabilizing full-year domestic grain production, was the focus of one of China’s important indicators of policy priorities – the “No.1 central document” published by the country’s central authorities. According to the National People’s Congress (NPC) Standing Committee, a food security law will be developed in 2022 to target five regions that have experienced delayed planting and dozens of other regions that are at risk of extreme weather conditions. A total of 1.6 billion yuan ($253 million) has been allocated to stabilize wheat production under this food security law. President Xi Jinping told the Chinese People’s Political Consultative Conference (CPPCC) that the end goal of this law is to ensure that “Chinese bowls are mainly filled with Chinese food.”

A recent report released by China’s agriculture minister states China’s wheat crop conditions have never been worse due to heavy rainfall. Some are saying the report could mean that China imports wheat for a little while longer.

Yicai Global, a Chinese business-focused news service, writes that in 2021 Canada accounted for 26 per cent of China’s wheat imports. Stay tuned for next month’s China Brief when we ask experts about the feasibility of China achieving food security through domestic measures and what it could mean for Canadian agriculture.

Canada’s role in China amid food security concerns

An article in the Financial Post notes that Chinese food security is at risk from the impact of the Ukraine crisis on existing global logistical disruptions and China’s flooding concerns. To help address these concerns, China recently lifted all wheat-import restrictions and dropped all phytosanitary rules for Russia. The crisis is also causing complications for Canadian farmers who may wish to pivot seeding plans to meet Chinese and global demand, particularly for wheat, as experts and farmers recently told CBC News.

  • President of the Alberta Federation of Agriculture, Lynn Jacobson, explains that “while the chance for farmers to take advantage of the global food shortage is there, it comes with strings attached.
  • For wheat farmers, the Russian invasion of Ukraine is putting 29 percent of the world’s wheat exports at risk. If given enough time Canadian farmers could work to fill global demand. Unfortunately, “the nature of harvest and seeding cycles means that farmers aren’t always in a place to react to trends broadly and quickly,” says Stephen Vandervalk, a fourth-generation farmer.
  • Tom Steve, General Manager of the Alberta Wheat and Barley Commission (AWBC), says that “[Regarding] high wheat prices, it’s whether farmers will be able to broker a crop to satisfy the needs in the marketplace.”
  • Dan Dias, CEO of Cereals Canada, also told CBC News in separate report that Canadian wheat tends to be of higher quality and more expensive than Ukrainian and Russian wheat. Canada would have “enough supply [for] high-quality end users” but can’t “fill every wheat requirement around the world.”

High prices of inputs for wheat, like fuel and fertilizer, have left farmers with a tough decision – do they expand their output or not. Farmers must also consider whether there will be another drought this summer. Some farmers may have already bought their seeds or pre-sold their crops at pre-crisis prices.  In short, this growing season will be one to watch to see how producers pivot their plans.

 In other news

CWF’s Belt and Road and Five-Year Plan Monitor

China’s multibillion dollar Belt and Road Initiative (BRI), the state-backed global infrastructure development strategy, has the potential to enormously shift global trade through new levels of infrastructure and supply chain integration, in the Asia-Pacific region as well as globally. China’s most recent five-year plan (FYP) sets the country’s priorities for 2021 to 2025 as well as the vision for 2035. These shifts have the potential to alter both the Chinese and global markets for Western Canadian-produced commodities. The China Brief now includes a section with relevant BRI and FYP developments. We welcome feedback as we continue to develop this new feature.

China – U.S. cooperation on projects?

Wang Yi, China’s Foreign Minister, recently invited the United States to cooperate on the Belt and Road Initiative, Reuters reports. China also said it is willing to work with the G-7 on the Build Back Better World (B3W) initiative which was, ironically enough, created to counter China’s rising global influence. The minister said that the opportunity to work together would create “openness, inclusiveness, innovation, growth, connectivity and win-win cooperation” between the U.S. and China.

War in Ukraine impacts BRI

The South China Morning Post explained how the China-Europe Railway Express, a “critical pipeline for Chinese exports to Europe,” has been indirectly impacted by the war in Ukraine. Chinese exporters and European importers have started to switch to sea cargo as there are concerns railway operations could be impacted. The switch to sea transport is compounding supply chain issues for global shipping and could result in “more delays, less capacity, and higher costs,” according to the South China Morning Post. The Silk Road Briefing says that Southern BRI routes through Kazakhstan to the Caspian Sea should also see a boom in investment if EU demand for Chinese products continues.

Argentina joins BRI

Following a trend among Latin American countries, the Asia Times reports that Argentina has signed on to the BRI. The move will allow the country to transition away from the International Monetary Fund (IMF) given its new access to the Asian Infrastructure Bank and BRICS New Development Bank. As the Globe and Mail points out, Argentina is also a large supplier of beef and soybeans to China so this move will be of interest to Western Canadian exporters. Canada and Argentina both increased barley exports to China following Chinese sanctions on Australian barley (see this China Brief for more).

China’s Two Sessions sets 2022 targets

The Chinese government recently completed the Two Sessions, annual meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference. As part of the sessions, the Chinese government has set its priorities for 2022, with thanks to the China Briefing for the English summary. The priorities are:

  • Target GDP of “around 5.5 percent”
  • Preferential tax incentives
  • Stimulating consumption
  • Foreign trade and investment
  • COVID-19 prevention measures in 2022
  • Guaranteeing employment
  • Climate and environment
  • Elderly care and childcare

Gobi Desert energy project

The China Daily recently summarized China’s climate and environment workplan for 2022, which is part of the broader five-year plan. Reuters reports that as part of this plan, China will construct facilities to generate 450 GW of wind and solar capacity in the Gobi Desert.

– Stephany Laverty and Taylor Blaisdell, policy analysts

The China Brief is a compilation of stories and links related to China and its relationship with Canada’s West. The opinions expressed in the links are those of the articles’ authors and don’t necessarily reflect the views of the Canada West Foundation and our affiliates.