Filled with endless loyalty to the party and deep sympathy for the farmers, I tearfully write this letter to you. But at least his plea was noticed, with Premier Zhu responding by dispatching an inspection team led by the provincial governor to investigate the situation. In many cases, the ring leaders have been arrested and executed. China's imminent entry into the World Trade Organisation will only make the situation worse. For the first time since the 1930s, China's domestic grain prices will have to fall in line with those on the world market.
Prices are too low and the taxes are too high.
From next year, China will start opening its markets to competition, even before it has succeeded in creating a functioning domestic grain market. Domestic prices will move in line with world demand and the state will stop planning harvests. This could lead to China becoming a much larger importer of grain than ever before, depending on how global commodity markets fluctuate. Chinese grain production is already dropping for the first time in five years, with the wheat harvest down this year by 10 per cent and corn by 20 per cent in some parts of the country. This is the third attempt in 20 years to remove the state from the role of planning harvests.