Food Security and Economic Reform: The Challenges Facing China’s Grain Marketing System

280 Pages·1999·29.725 MB·English

by  Christopher Findlay, Andrew Watson (eds.)

STUDIES ON THE CHINESE ECONOMY
General Editors: Peter Nolan, Sinyi Professor of Chinese Management,
Judge Institute of Management Studies, University of Cambridge, and
Fellow of Jesus College, Cambridge, England; and Dong Fureng, Professor,
Chinese Academy of Social Sciences, Beijing, China
This series analyses issues in China's current economic development, and
sheds light upon that process by examining China's economic history. It
contains a wide range of books on the Chinese economy past and present,
and includes not only studies written by leading Western authorities, but also
translations of the most important works on the Chinese economy produced
within China. It intends to make a major contribution towards understanding
this immensely important part of the world economy.
Titles include:
Thomas Chan, Noel Tracy, Zhu Wenhui
CHINA'S EXPORT MIRACLE
Xu Dixin and Wu Chengming (editors)
CHINESE CAPITALISM, 1522-1840
Christopher Findlay and Andrew Watson (editors)
FOOD SECURITY AND ECONOMIC REFORM
Samuel P. S. Ho and Y. Y. Kueh
SUSTAINABLE ECONOMIC DEVELOPMENT IN SOUTH CHINA
Kali P. Kalirajan and Yanrui Wu (editors)
PRODUCTIVITY AND GROWTH IN CHINESE AGRICULTURE
Bozhong Li
AGRICULTURAL DEVELOPMENT IN JIANGNAN, 1620-1850
Alfred H. Y Lin
THE RURAL ECONOMY OF GUANGDONG, 1870-1937
Die Lo
MARKET AND INSTITUTIONAL REGULATION IN CHINESE
INDUSTRIALIZATION
Jun Ma
THE CHINESE ECONOMY IN THE 1990s
Guo Rongxing
HOW THE CHINESE ECONOMY WORKS
Sally Sargeson
REWORKING CHINA'S PROLETARIAT
Ng Sek Hong and Malcolm Warner
CHINA'S TRADE UNIONS AND MANAGEMENT
Michael Twohey
AUTHORITY AND WELFARE IN CHINA
Wang Xiao-qiang
CHINA'S PRICE AND ENTERPRISE REFORM
Xiaoping Xu
CHINA'S FINANCIAL SYSTEM UNDER TRANSITION
Yanni Yan
INTERNATIONAL JOINT VENTURES IN CHINA
Xiao-guang Zhang
CHINA'S TRADE PATTERNS AND INTERNATIONAL COMPARATIVE
ADVANTAGE
Studies on the Chinese Economy
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Food Security and
Economic Reform
The Challenges Facing China's
Grain Marketing System
Edited by
Christopher Findlay
Associate Professor
Department of Economics
University of Adelaide
and
Andrew Watson
Professor of Asian Studies
Centre for Asian Studies
University of Adelaide
&
First published in Great Britain 1999 by
-== MACMILLAN PRESS LTD
Houndmills, Basingstoke, Hampshire RG21 6XS and London
Companies and representatives throughout the world
A catalogue record for this book is available from the British Library.
ISBN 978-1-349-40481-0 ISBN 978-0-230-39011-9 (eBook)
DOI 10.1057/9780230390119
First published in the United States of America 1999 by
-== ST. MARTIN'S PRESS, INC.,
Scholarly and Reference Division,
175 Fifth Avenue, New York, N.Y. 10010
Library of Congress Cataloging-in-Publication Data
Food security and economic reform: the challenges facing China's
grain marketing system/ edited by Christopher Findlay, Andrew
Watson.
p. em,-(Studies on the Chinese Economy)
Includes bibliographical references and index.
I_ Food supply-China. 2. Agriculture and state-China. 3. Grain
trade-China. L Findlay. Christopher C (Christopher Charles)
lL Watson. Andrew. 19-12- liL Series.
HD90 16.C62F63 1999
:us_
1' 951-de21 99-11250
CIP
Selection. editorial matter, and Chapters I and 2 0 Christopher Findlay
and Andrew Watson 1999
Chapter 5 1D Harry X. Wu and Christopher Findlay 1999
Chapter 61D Andrew Watson 1999
Chapter 121D Christopher Findlay, Andrew Watson, Cheng Enjiang and Harry X. Wu 1999
Chapters 3. 4 and 7-11 1D Macmillan Press Ltd 1999
Softcover reprint of the hardcover 1st edition !999 978-0-333-72089-9
All rights reserved. No reproduction. copy or transmission of this publication may be made
without written permi"ion_
No paragraph of this publication may he reproduced, copied or transmitted save with
written permission or in accordance with the provisions of the Copyright, Designs and
Patents Act 1988. or under the terms of any licence permitting limited copying issued by
the Copyright Licensing Agency, 90 Totten ham Court Road, London WI P OLP.
Any person who docs any unauthorised act in relation to this publication may he liable to
criminal prosecution and civil claims for damages.
The authors have asserted their rights to he identified as the authors of this work in
accordance with the Copyright, Designs and Patents Act 198~.
This book is printed on paper suitable for recycling and made from fully managed and
sustained forest sources.
10 9 !! 7 6 s 4 3 2
0!! 07 06 05 04 03 02 01 ()() 99
Contents
List of Tables vii
List of Figures ix
A cknowledgemen ts x
List of Abbreviations xi
Notes on the Contributors xii
1 Introduction 1
Christopher Findlay and Andrew Watson
2 Food and Profit: The Political Economy and Grain Market
Reform in China 5
Andrew Watson and Christopher Findlay
3 Grain Purchases and Sales in China: The Evolution from
Plan to Market 39
Tang Renjian
4 The Relationship between Grain Prices and Inflation 54
Guo Shutian
5 Grain Demand 62
Harry X. Wu and Christopher Findlay
6 The Logic of Market Reform: The Development of Wholesale 80
Grain Markets in China
Andrew Watson
7 Supply of Funds for Grain Purchases in China since the 105
Middle 1980s
Cheng Enjiang
8 Self-Sufficiency and Regional Specialization 128
Yang Hong
9 Inflation and the Real Price of Grain in China 148
D. Gale Johnson and Song Guoqing
10 The Impact of China's Grain Reserve System on Import
Demand 163
Frederick W. Crook
v
VI Contents
11 Institutional Reform and Agricultural Productivity Growth
in China 202
Colin Carter
12 The Implications of Grain Market Reform for China's
International Grain Trade: An Overview 220
Christopher Findlay, Andrew Watson, Cheng Enjiang and
Harry X. Wu
References 237
Index 254
List of Tables
4.1 The relationship between changes in agricultural and industrial
prices and the growth rate of grain production 1979-93 57
5.1 Projections of China's grain demand 63
5.2 Projected population and the share of age groups in China 67
5.3 China's feeding efficiency, measured by grain-meat/egg/milk
conversion ratio, various findings 69
5.4 Seed input per unit of sown area and seed input/output ratio 70
5.5 Official and non-official estimates of China's grain losses 71
5.6 China's urban and rural per capita food consumption and
implied (unmilled) grain consumption, 1981-95 72
5.7 Assumed income elasticities of demand 74
5.8 Assumed per capital grain consumption by age group 75
5.9 Projections of China demand for food and feed grains by 2000,
2010 and 2020 under different income growth and feeding
efficiency scenarios 77
6.1 Agricultural wholesale market growth in China, 1986-93 90
6.2 Grain trade in free grain markets, 1992-5 92
6.3 Major wholesale markets in the ICB system, 1993 93
7.1 Rates of interest for loans provided by the ABC
andRCCs(%) 112
7.2 Monthly distribution of grain purchased by the grain bureau,
1978-88 114
7.3 Cash and deposits hoarding by average households in rural
China at year-end, 1980-91 115
7.4 Balance sheet of the ADBC, 1994 120
7.5 Rates of interest for loans provided by the ADBC as on
1 July 1995 122
8.1 Numbers of commercial grain base counties by provinces 135
8.2 Grain production in the commercial grain base areas
(170 counties) 138
8.3 Comparisons of the economic features of grain base areas and
the national average, 1990 139
9.1 Regression results 158
10.1 Civilian grain stocks in Yunnan Province, by grain type,
1751-56 167
10.2 Granary space, 1949-52 168
10.2 Total grain supply and use table for Hebei Province, 1984
and 1985 172
vn
Vlll List of Tables
10.4 Hebei province state-owned grain stocks, 1984-3 (tonnes) 173
10.5 PRC granary construction, 1949-84 174
10.6 National average per capita 1984-95 183
10.7 Estimated on-farm grain stocks, by province, 1991-4 187
10.8 Marketing years for China's grain crops 190
10.9 China's estimated on-farm 'true carry-over' stocks, 1991 191
10.10 Estimated true carry-over stocks for 1991 192
10.11 Estimated quantity of on-farm grain stocks held by 193
average farm households, 1991
10.12 Corn storage losses, 1992 196
11.1 Studies of the effects of reforms on agricultural productivity
in China 204
11.2 Real percentage growth rates of gross value of agricultural
output, 1979-83 209
11.3 Comparison of input production elasticity estimates for
China 213
11.4 Accounting for crop output growth: a reinterpretation 215
11.5 Results from growth accounting studies 217
12.1 Projections of China's grain trade 222
12.2 Trade implications of the projected demand for food and
feed grains for China under various scenarios 228
List of Figures
5.1 China's per capita food grain and grain-based food
consumption, 1991 66
7.1 Flow of funds for state grain purchases in China before 1993 108
7.2 Flow of funds for state grain purchases in China after 1993 119
7.3 Organizational structure of the ADBC 121
8.1 Spatial distribution of commercial grain base areas 134
9.1 Real price of grain, 1978-94 149
9.2 Supply index and trend line 150
9.3 Inflation rate and real price of grain 151
9.4 Inflation rate and interest rate on a one-year savings deposit 153
9.5 Real market grain price and estimates from fit (A) 159
9.6 Real market grain price and estimates from fit (B) 159
10.1 Qing dynasty grain stocks, 1741-1856 (millions of tonnes) 166
10.2 Qing dynasty grain stocks, 1741-1856 (kg per capita) 167
10.3 Year-end and carry-over on-farm grain stocks in China 183
10.4 Relationship between national grain production and on-farm
stocks 189
10.5 China's wheat imports, 1988-95 198
11.1 Allocative and technical efficiency 206
11.2 Total factor productivity index (TFPI) for China's agriculture,
1952-89 210
12.1 Grain trade scenarios 229
12.2 Quarterly maize prices, China vs. US, 1990-7 232
12.3 Quarterly wheat prices, China vs. US, 1990-7 232
IX