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China's Global Agricultural Strategy: Supportive Policies and Guarantee Measures for Its Implementation

By Cheng Guoqiang 2015-07-03

I. Further Opening-up Agricultural Sector

From the perspective of China's basic national conditions and the overall situation of reform and opening up, we should, in one or two decades to come, enhance our strategic awareness of further opening-up agricultural sector, focus on safeguarding national food security and supply of major agricultural products and target at better utilization of overseas and domestic markets and resources in all respects, so as to comprehensively expand the scope in terms of the opening-up of agricultural sector.

First, we should formulate the overall plan for expanding agricultural opening-up and implementing the global agricultural strategy as soon as possible. We should bear in mind the actual food production capacity of China and be fully aware of the importance and complexity of food security for such a populous developing country as well as the shortage of resources restraining China's agricultural development. We will make an overall plan and use domestic and foreign market and resources in a coordinated way while pursuing grain self-sufficiency, so as to ensure food security and the effective supply of major agricultural products and promote China's agricultural modernization. We need to make an overall plan and arrangement for overseas agricultural investment and cooperation and the establishment of the global supply network of agricultural product import and incorporate it into the national strategy. Meanwhile, we will study and work out a special plan for implementing the global agricultural strategy to guide joint efforts in developing and utilizing global agricultural resources and building the global agricultural product supply chain.

Second, we will deepen the reform of agricultural management system to strengthen and improve the system of supportive policies for agricultural opening-up. We will push forward the reform of agricultural management system and fundamentally solve the systematic problem related to department segmentation, overlapping and missing of management, in order to establish and improve the system of coordinately managing the agricultural sector for its opening-up. We should include staple food grain products concerning national food security, such as rice, into the national food security strategy, in order to further improve and strengthen the domestic policy support to protect foreign trade and investment. We will set up and improve the system of supportive policies for the export and import of agricultural products serving the strategic interests of the national food security, and tighten the management of imports. We will establish and improve the system for foreign capital access and security management and the mechanism for the report and safety inspection regarding the merger and acquisition of domestic agri-business by foreign investment. These will provide strong system support and institutional guarantee for expanding agricultural opening-up and safeguarding the industrial security of agriculture.

Third, we will set up and improve the coordination mechanism for trade and investment of agricultural products. We will seek to establish a mechanism steadily linking the domestic production with import of agricultural products, according to the change of the supply-demand relationship and price of agricultural products both at home and abroad, and effectively regulate imports to avoid shocks induced by imported agricultural products on domestic production and market. We will create the monitoring system on agricultural imports and early warning system against damages to domestic industries as well as a quick response mechanism, and make full use of trade remedy measures such as anti-dumping, anti-subsidies and protective measures to put in place an emergency response mechanism to cope with the huge agricultural subsidies by other countries.

Fourth, we will improve the environment for agricultural opening-up. First, China needs to actively participate in global agricultural governance and push forward multilateral negotiations such as WTO negotiation. In this way, it will promote the establishment of a fair and reasonable new order related to international agricultural investment and trade and meanwhile formulate global rules which could effectively curb bio-energy and agricultural products speculation. Second, we will promote bilateral negotiation and coordination, with more efforts focused on negotiating with major countries on free trade zones and facilitate extensive cooperation with developing countries, thereby speeding up regional economic integration. We will develop a sound inter-governmental cooperation with foreign grain exporters. Third, we will support international institutions such as the Food and Agriculture Organization (FAO) and non-governmental organizations, and conduct activities related to information sharing, consulting advice and assistance work for global food security and international agricultural development.

II. Formulating the Supportive Policies and Guarantee System for Implementing the Global Agricultural Strategy

We should implement the global agricultural strategy and build a sustainable, stable and safe global supply network of agricultural products. This is an important support to coordinately capitalize on domestic and international markets and resources, so as to guarantee national food security and the effective supply of major agricultural products. We must accelerate the innovation of institutional mechanisms, offer better government planning and services, improve policy support and guarantee mechanism.

1. We will build an overseas agricultural investment and cooperation mechanism which is market-oriented and led by enterprises with government support.

We must be aware of the fact that the major role in implementing overseas agricultural investment strategy is played by enterprises rather than government, as the latter is mainly responsible for creating a good investment environment and offering necessary support and assistance to enterprises. It is necessary to streamline relevant institutions for management and approval and to innovate systems and mechanisms, reduce the government's intervention, uplift restrictions on overseas agricultural investment and cooperation and simplify procedures and formalities for examination and approval. We will encourage and support Chinese enterprises to operate in a market-based way by following its rules and meeting its demands. These enterprises can adopt various forms, such as international agricultural trade, overseas investment and cooperation, and get closely associated with major grain producers and global major grain trade network. In this way, the operation mechanism for the global agricultural import supply chain will be established with the joint efforts of enterprises and the government, in order to ensure stable domestic supply. We need to improve and innovate foreign-aid forms to support overseas agricultural investment and cooperation in terms of mechanisms and policies. We will give full play to policies related to foreign-aid funds and concessional loans, and prioritize overseas agricultural investment and cooperation as major projects in providing government assistance.

The article was published in China Development Review, No 1, 2014.

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