Voluntary Report - public distribution

**Date:** 2/17/2005

**GAIN Report Number:** CH5016

CH5016

**China, Peoples Republic of**

**Agricultural Situation**

**World\'s Largest Farm Producer Now a \$6 Billion Market for the U.S.**

**2005**

**Approved by:**

![](media/image1.wmf)Maurice W. House

U.S. Embassy, Beijing

**Prepared by:**

Adam Branson and Casey E. Bean

**Report Highlights:**

China is the world\'s most populous nation and the largest producer (by
volume) of agricultural products. Due to rising incomes, limited arable
land, and strong import demand, China has become a \$6 billion market
for U.S. agricultural and food products. USDA\'s Foreign Agricultural
Service offices in China, in partnership with USDA Cooperators, play a
major role facilitating trade and leading market access initiatives.
This report provides background information on China\'s agricultural
production and trade using reports from the United Nations Food and
Agriculture Organization, the Chinese Ministry of Agriculture, the
Chinese Customs Administration, the United States Department of Commerce
Census Bureau, and the USDA.

Includes PSD Changes: No

Includes Trade Matrix: No

Unscheduled Report

Beijing \[CH1\]

\[CH\]

Table of Contents

[Introduction 3](#introduction)

[China is the World's Number 1 Producer and Consumer of Farm Products
3](#china-is-the-worlds-1-producer-and-consumer-of-farm-products)

[China is a Major Importer of Agricultural Products
3](#china-is-a-major-importer-of-agricultural-products)

[China is a Major Exporter of Agricultural Products
4](#china-is-a-major-exporter-of-agricultural-products)

[Future for United States Agricultural Exports to China
4](#future-for-united-states-agricultural-exports-to-china)

[Post WTO Entry and Impact on China's Agricultural Trade
5](#post-wto-entry-and-impact-on-chinas-agricultural-trade)

[USDA China Office Contact Information and Report Access
6](#usda-china-office-contact-information-and-report-access)

[USDA Cooperator Offices in China Contact Information
7](#usda-cooperator-offices-in-china-contact-information)

# Introduction

China is the world's most populous nation and the largest farm producer,
by volume. Due to rising incomes, strong consumer demand, and limited
arable land for crop production, China has become the United States 4th
largest overseas market for raw agricultural materials and food
products. United States exports of agriculture, fisheries and wood
products to China exceeded \$6 billion during 2004, representing 10
percent of all U.S. exports to the world, an increase of \$1 billion
from the year before.

USDA\'s Foreign Agricultural Service offices in China, in partnership
with the USDA Cooperators (see page 7) who have offices here, play a
major role facilitating trade and leading market access initiatives.
Although China's has emerged as a major importer of agriculture
products, continued smooth trading relationships with the United States
will hinge on USDA's continued cooperation with China's Government and
private sector in the areas of market access, market intelligence,
market development, foreign policy, crop production/research, food
safety and capacity building.

This report provides background information on China\'s agricultural
production and trade using reports from the United Nations Food and
Agriculture Organization, the Chinese Ministry of Agriculture, the
Chinese Customs Administration, the U.S. Department of Commerce Census
Bureau, and the USDA.

# China is the World's #1 Producer and Consumer of Farm Products

-   China has one-tenth of the world's arable land and one-fifth of the
    world's population. On a per capita basis, China's arable land is
    one-sixth of the United States. In total arable land area, it is
    four-fifths of the United States.

-   China is the world's #1 producer of vegetables and melons (50
    percent world total), pork (48 percent), poultry eggs (45 percent),
    groundnuts (39 percent), apples (35 percent), paddy rice (31
    percent), sheep and goat meat (30 percent), rapeseed (27 percent),
    primary fibers (24 percent), potatoes (23 percent), and wheat (15
    percent).

-   China is the world's #2 producer of maize (19 percent) and poultry
    meat (17 percent).

-   China's is the world's #3 producer of citrus (13 percent), beef and
    veal (11 percent), bananas (9 percent), and sugarcane (7 percent).

-   China's is the world's #4 producer of soybeans (9 percent)

-   China's is the world's #5 producer of grapes (8 percent) and natural
    rubber (7 percent).

-   China is the world's #1 consumer of rice, wheat, corn, pork,
    oilseeds, vegetable oils, and cotton.

-   One of China's stated priorities for 2005 is increasing rural,
    namely farmer, incomes. The 2004 per capita rural and urban incomes
    were respectively \$353 (up 6.8 percent) and \$1135 (up 7.7
    percent).

# China is a Major Importer of Agricultural Products

-   Using China Customs data, in 2004, China imported \$35 billion in
    agricultural, fishery, and forestry products. 2003 imports were \$25
    billion.

-   Using China Customs data, the United States was the #1 supplier,
    responsible for \$8.1 billion, 23 percent of China's total imports.
    Brazil (9 percent), Argentina (8 percent), Malaysia (7 percent),
    Australia (7 percent), Russia (7 percent), Thailand (6 percent), and
    the EU-25 (5 percent) were other major suppliers.

-   Using United States Census Data aggregated by USDA FAS into Bulk,
    Intermediate, Consumer-Oriented, Forestry, and Fishery (BICO)
    categories, China imported \$6.1 billion in 2004 with a composition
    of: 69 percent bulk, 13 percent intermediate, 8 percent
    consumer-oriented, 6 percent forestry, and 4 percent fishery.

-   From 1992 to 2004, using United States Census data, United States
    agricultural exports to China increased nearly 900 percent. During
    the ten years from 1995 to 2004, United States exports grew 226
    percent, faster than to any other major market.

-   China was the #1 destination for United States bulk agricultural
    exports (17 percent of world total), #4 destination for intermediate
    agricultural (6 percent), forestry (7 percent), and fishery (7
    percent) exports, and #10 destination for consumer-oriented (2
    percent) agricultural exports.

-   China was the #1 destination for United States soybeans, cotton,
    hides and skins, #2 destination for wheat, #4 for red meats, food
    preparations, and "other" intermediate products, #5 market for dairy
    products, and #9 destination for fresh fruit.

-   In 2004, China accounted for 35 percent of all United States soybean
    exports, 33 percent of all cotton exports, 10 percent of all wheat
    exports, 30 percent of all hides and skins exports, 4 percent of all
    dairy exports, 10 percent of all hardwood exports, 6 percent of all
    softwood exports, 29 percent of all crab and crabmeat exports, and
    11 percent of all salmon exports.

-   Per capita, China is a small market. 2004 United States per capita
    exports to China were \$4.75. Per capita exports to other markets
    are much larger: e.g., South Korea-\$61, Japan-\$78, Mexico-\$86,
    and Canada-\$373.

# China is a Major Exporter of Agricultural Products

-   In 2004, China's agricultural exports were \$28 billion; this is
    double the amount of ten years ago.

-   China is typically a net agricultural exporter. In 2003, China
    Customs data indicates imports outpaced exports by \$348 million,
    the first time since 1995. In 2004, imports outpaced exports by \$7
    billion, a considerably wider volume. The export data, however, does
    not include any textile and furniture exports made from raw
    agricultural goods and thus, it is not a useful exercise to assume
    China has an agricultural trade deficit.

-   Using 2004 export values, the largest exported goods included
    processed fishery and forestry products, animal meats and casings,
    and vegetables.

-   Japan is China's #1 agricultural commodity export destination (\$8.4
    billion in 2004). The United States has been a top-5 destination for
    Chinese agricultural exports since 1995. China Customs indicates the
    United States imported \$3.8 billion in Chinese agricultural
    commodities in 2004.

-   China has a competitive advantage in producing and then exporting
    several labor-intensive agricultural commodities; including fruits,
    vegetables, and finished products like frozen fish fillets and
    wooden articles.

-   China is a competitor with the United States in several regional and
    other third country markets for swine and poultry meats, fruit, and
    occasionally corn and rice.

# Future for United States Agricultural Exports to China

-   China's overall gross domestic product (GDP) is growing faster than
    agricultural GDP. This often indicates agricultural imports will
    likely grow as domestic consumption outpaces domestic supply.

-   The proportion of added value of agriculture in the GDP in 1990 was
    28.4 percent, 20.8 percent in 1995, 15.8 percent in 2001, and 14.5
    percent in 2002. Again, this is an indication that other sectors of
    the economy are growing faster than the food sector and could
    indicate that imports will grow.

# Post WTO Entry and Impact on China's Agricultural Trade

-   There are some agricultural trade policy concerns with China that
    remain in spite of its WTO accession:

    -   China maintains a Quarantine Import Permit (QIP) is required
        prior to signing contracts to import a wide variety of
        agricultural commodities.

    -   Certain terms and specifics of TRQ management remain undefined.

    -   Some Chinese agencies do not understand China's WTO commitments
        or could be unwilling to fully cooperate.

    -   Growing number of sanitary and phytosanitary (SPS) barriers and
        technical barriers to trade (TBT) as China integrates itself
        into the WTO.

    -   Uncertainties on China's willingness to accept agricultural
        biotechnology.

    -   Non-transparent system of value added tax collection system and
        tariff rebates for exported commodities.

    -   Numerous unrealistic expectations from China's trading partners.
        Note: China did not join the WTO to import more commodities.

-   There are numerous positives with China's WTO accession, of which, a
    few include:

    -   China lowered tariffs on a broad range of agricultural
        commodities.

    -   There is more certainty and greater clarity on the rules of
        trade.

# USDA China Office Contact Information and Report Access

For reports about China's agricultural/food sector and market
opportunities for U.S. agricultural products in China, please see the
FAS website at [www.fas.usda.gov](http://www.fas.usda.gov/) (select
"Attache Reports"). You may also contact the following offices.

AMERICAN EMBASSY

AGRICULTURAL AFFAIRS OFFICE

Mr. Maurice House, Minister Counselor

AgBeijing@usda.gov

U.S. Embassy -- FAS

3 Xiu Shui Bei Jie, Beijing, 100600

Tel: (86-10) 65321953

Fax: (86-10) 65322962

AGRICULTURAL TRADE OFFICE BEIJING

Mr. LaVerne Brabant, Director

ATOBeijing@usda.gov

Kerry Center South Tower, 24^th^ Floor, Suite #2425

No.1 Guanghua Lu, Beijing, 100020

Tel: (86-10) 85296418

Fax: (86-10) 85296692

AGRICULTURAL TRADE OFFICE GUANGZHOU

Mr. Keith Schneller, Director

ATOGuangzhou@usda.gov

China Hotel Office Tower 14/F

Guangzhou, China 510015

Tel: (86-20) 86677553

Fax: (86-20) 86663388

AGRICULTURAL TRADE OFFICE SHANGHAI

Mr. Ross Kreamer, Director

ATOShanghai@usda.gov

Shanghai Center, Suite 331

1376 Nanjing West Road, Shanghai, 200040

Tel: (86-21) 62798622

Fax: (86-21) 62798336

ANIMAL AND PLANT HEALTH INSPECTION SERVICE

Dr. Eloisa Jones, China Director

Eloisa.F.Jones@aphis.usda.gov

Room 618, St. Regis Office Building

21 Jianguomenwai Ave

Tel: (86-10) 65323212

Fax: (86-10) 65325813

# USDA Cooperator Offices in China Contact Information

ALASKA SEAFOOD MARKETING INSTITUTE

CALIFORNIA PRUNE BOARD

SUNKIST GROWERS

Shanghai

Mr. Robin Wang

SHANGHAI SHENG MING INDUSTRIAL CO. LTD.

29G, Shanghai Pufa Tower

588 South Pudong Road, Pudong, Shanghai 200120

Tel: (86-21) 68889835/ 68889836

Fax: (86-21) 58775839

<Shengming@sh163.net>

Beijing

Mr. Henry Yang

Room 3-302, No.13, Building 1, Beishatan

Chaoyang District, Beijing 100083

Tel: (86-10) 64867316

Fax:(86-10) 64867316

ALMOND BOARD OF CALIFORNIA

CALIFORNIA CHERRY ADVISORY BOARD

US DAIRY EXPORT COUNCIL

US POTATO BOARD

Shanghai

Mr. Daniel Chan

PR Consultants Ltd.

Room 436, Shanghai Center

1376 Nanjing Xi Lu, Shanghai 200040

Tel: (86-21) 62798668

Fax: (86-21) 62798669

<Prc@prcon.com>

Beijing

Ms. Shirley Jiang

Room C-1-602, Landmrk Crystal Apartment

No.5 LiangmaQiao Road, Chao Yang District

Beijing, 100600

Tel: (86-10) 64331265

Fax: (86-10) 64331265

<shirleyj@prcon.com>

Chengdu

Ms. Tracy Chang

Flat 9-A-12-70 Ruisheng Garden

36 Fang Cao Street, Chengdu 610041

Tel: (86-28) 85133491

Fax: (86-28) 85133491

<tracyc@prcon.com>

Guangzhou

Ms. Fiona Chen

Tel/Fax: (86-20) 34523281

<fionac@prcon.com>

AMERICAN FOREST & PAPER ASSOCIATION (AF&PA)

Beijing

Mr. Paul Boardman

605 CITIC Building

No. 19 Jianguomenwai Dajie, Chaoyang District

Beijing 100004

Tel: (86-10) 85263150

Fax:(86-10) 85263151

Cell phone: 1371-811-5752

<boardman@afandpa-china.org>

Shanghai

Mr. Xu Fang

Rm. 305, Bldg.A, Far East Int'l Plaza, 299 Xianxia Road

Shanghai 200051

Tel: (86-21) 62702222 x 320

Fax: (86-21) 62705555

<xu_fang@afandpa-china.org>

AMERICAN HARDWOOD EXPORT COUNCIL

Ms. Mabel Zhuang

Rm. 306, Bldg. A, Far East Int'l Plaza, 299 Xianxia Road

Shanghai 200051

Tel: (86-21) 62702222 x 316

Fax: (86) 21-6270-5555

<Mabel_zhuang@ahec-china.org>

AMERICAN LEGEND COOPERATIVE

CALIFORNIA WINE INSTITUTE

NATIONAL ASSOCIATION OF STATE DEPARTMENTS OF AGRICULTURE

PET FOOD INSTITUTE

Shanghai

Ms. Barbara Lee

LEE'S MARKET MAKERS Inc.

Room A, 3^rd^ Floor

No. 886, Tianbao Road, Shanghai 200086

Tel: (86-21) 65156497 / 55570142

Fax: (86-21) 65156498

<Leesmarket@sh163.net>

Beijing

Ms. Joanna Dai

Room 211, Xingxing Office Building

No. 72, No. 23 Yuan, Fuxing Road

Haidian District, Beijing 100036

Tel: (86-10) 68246925

Fax:(86-10) 68246927

<leesbj@public3.bta.net.cn>

AMERICAN SOYBEAN ASSOCIATION (ASA)

Beijing

Mr. Philip Laney, Country Director

Room 902, China World Tower 2

No.1 Jianguomenwai Avenue, Beijing 100004

Tel: (86-10) 65051830

Fax:(86-10) 65052201

<beisoya@asachina.org>

Shanghai

Ms. Claudia Chong

Room 1802, SITC

2201 Yannan Road (W)

Shanghai 200336

Tel: (86-21) 62191661

Fax: (86-21) 62195590

<claudiachong@asachina.org>

AMERICAN WOOL COUNCIL

Ms. Kitty Gu

156 Tongji Xincun, Suite 401

Shanghai 200081

Tel/Fax: (86-21) 65023824

<Kittygu@guomai.sh.cn>

CALIFORNIA PISTACHIO COMMISSION

CALIFORNIA TABLE GRAPE COMMISSION

FLORIDA DEPARTMENT OF CITRUS

RAISIN ADMINISTRATIVE COMMITTEE

Shanghai

Mr. Louis Ng

Louis Ng & Associates Ltd.

Room 1305, Guo Li Building

No. 1465 Beijing Rd. (West), Shanghai 200040

Tel: (86-21) 62473840 / 62473841

Fax: (86-21) 62473448

<lnash@sh163.net>

Beijing

Ms. Marjorie Jiang

Tel: 13387875796

E-mail: lnadl@hotmail.com

Guangzhou

Mr. Louis Ng

Louis Ng & Associates Ltd

Room 720, Bai Yun Hotel,

367 Huanshi Dong Road,

Guangzhou, 510060

Tel: (86-20) 83333998 ext 720

Fax: (86-20) 83333998 ext 790

Admin@Lnahk.com.hk

COTTON COUNCIL INTERNATIONAL

Mr. Haiying Yuan

902, China Resources Building

No. 8 Jianguomen Beidajie

Dongcheng District

Beijing 100005

Tel: (86-10) 85191588

Fax:(86-10) 65181088

<Haiying.yuan@edelman.com>

COTTON INCORPORATED

Mr. Jiarong Wang

Unit 2309 & 2310, Plaza 66

1266 Nan Jing Road(W),

Shanghai 200040

Tel: (86-21) 62881666

Fax: (86-21) 62883666

<Jwang@cottoninc.com>

NATIONAL CONFECTIONERS ASSOCIATION

Mr. Michael Reilly

Global Goods and Services Inc.

Suite I, 25^th^ Floor, 720 Pudong Ave.

Pudong, Shanghai China 200120

Tel: (86-21) 50366608

Fax: (86-21) 50366238

Email: <mreilly@ggs-inc.com>

NATIONAL RENDERERS ASSOCIATION, INC.

Mr. Wang Zheng

2-20 C, Tian Cheng Bldg., 96 Longkouxi Rd.

Tianhe, Guangzhou, 510635

Tel: (86-20) 85268086

Fax:(86-20) 87597710

USA POULTRY & EGG EXPORT COUNCIL

Beijing

Mr. Richard Hu

Room 419, Building A, Heqiao Mansion

No. 8A Guanghua Road, Chaoyang District, Beijing 100026

Tel: (86-10) 65811255

Fax:(86-10) 65812922

<bjoffice@usapeec.org.cn>

Shanghai

Mr. Carl Shi

1809-1810 Overseas Chinese Mansion

129 Yannan Road(W), Shanghai 200040

Tel: (86-21) 62492625

Fax: (86-21) 62491653

<shoffice@usapeec.org.cn>

U.S. DRY PEA AND LENTIL COUNCIL

Ms. Corine Schweiger

TRACTUS

No. 1800 Zhongshan West Road,

22 Floor (A), Shanghai 200235

Tel: (86-21) 64400990 / 64400991 / 64400992

Fax: (86-21) 64403173

Email: <corine@tca.sina.net>

U.S. DRY FRUIT & NUTS PROGRAM

WUSATA HEALTHY FOOD PROGRAM

Ms. Constance Mo

Constance Mo & Associates

23B Yong Ming Mansion

Xi Zang South Road, Shanghai 200011

Tel: (86-21) 63677408

Fax: (86-21) 63677409

Email: <mochina@vip.sina.com>

U.S. GRAINS COUNCIL (USGC)

Mr. Todd M. Meyer, Country Director

Room 901, China World Tower 2

No. 1 Jianguomenwai Avenue, Beijing 100004

Tel: (86-10) 65051314

Fax:(86-10) 65050236

<grainsbj@grains.org.cn>

U.S. MEAT EXPORT FEDERATION

Shanghai Representative Office

Ms. Jina Gao

Room 1010, Central Plaza

No. 227 Huangpi Bei Lu, Huangpu District

Shanghai 200003

Tel: (86-21) 62494640

Fax: (86-21) 62495810

<Shanghai@usmef.org>

Beijing Consultant

Ms. Xiaofei Li

Room 06A, 6^th^ Floor, Building No.52

Songyu Nanlu, Chaoyang District

Beijing 100021

Tel: (86-10) 87311328

Fax:(86-10) 87311339

<lsleebj@eastnet.com.cn>

Guangzhou Consultant

Mr. Steve Mo

Room A, 19^th^ Floor, Junhui Building

No. 7 Tiyu Road West, Tianhe District

Guangzhou, 510620, China

Tel: (86-20) 38891812

Fax:(86-20) 38891920

<canton@usmef.org>

Shenyang Contractor

Ms. Louisa Liu

Room 4-4-2, No.100 Yan He Street

Huanggu District, Shenyang 110036

Tel: (86-24) 86742533

Fax:(86-24) 86745331

<shenyang@usmef.org>

U.S. NORTHWEST CHERRY GROWERS

Mr. Victor Wang

Room 304, Block 1, Fortuan Carden, 23 Shuiyin St.

Guangzhou, 510075

Tel: (86-20) 87601455

Fax:(86-20) 87611395

<unipeace@public.guangzhou.gd.cn>

U.S. WHEAT ASSOCIATES (USWA)

Mr. Andy Zhao, Country Director

Room 903, China World Tower 2

No. 1 Jianguomenwai Avenue, Beijing 100004

Tel: (86-10) 65051278

Fax:(86-10) 65055138

<infobeijing@uswheat.org>

WASHINGTON APPLE COMMISSION

Shanghai

Mr. Yan Li

Rm. 1002, No. 6, 2455 Nong, Xie Tu Road

Xu Hui District, Shanghai 200030

Tel: (86-21) 54244336

Fax: (86-21) 64271514

<Liyan1_@163.com>

Guangzhou

Mr. Victor Wang

Room 304, Block 1, Fortuan Carden, 23 Shuiyin St.

Guangzhou, 510075

Tel: (86-20) 87601455

Fax:(86-20) 87611395

<unipeace@public.guangzhou.gd.cn>

Disclaimer: This list is provided for convenient reference and as such
does not imply discrimination towards or endorsement of any particular
company or individual.