China is gearing up for more outbound investment in agriculture and scientific cooperation.
China's five-year plan for the rural economy includes four paragraphs on "coordinated utilization of domestic and foreign markets and resources" tucked away among the ambitious initiatives for a makeover of the countryside. The paragraphs have diverse objectives to project China's influence abroad along the "new silk road," create world-beating agribusiness companies to supply China's food needs, gain more control over the flow of imports, and boost China's exports of horticultural crops and aquaculture products.
China wants to have more and better international cooperation with everybody in agricultural science to get the best technology and project its influence in the developing world. The plan calls for "deepening" cooperation with "neighboring countries," Africa, Latin America, and central and eastern Europe--with a focus on the "One Belt One Road" countries--and "strengthening" cooperation with developed countries in North America, Western Europe and Oceania. China hopes to play a more active role through engagement with international organizations, actively participating in setting international rules and standards.
The plan hopes to help agricultural companies “go global,” fostering a set of multinational grain trading, marketing and agricultural enterprise conglomerates that are internationally competitive and well-known brands. Big, well-funded companies will be chosen to act as models for outbound investment, including companies in the Ministry of agriculture's industrialized leading enterprise program (virtually all major agribusiness companies), and enterprises affiliated with the state farm system (like Bright Foods, Beidahuang, and Jiusan). The plan encourages Chinese enterprises to establish agricultural production, processing, storage and transportation bases outside the country’s borders to create global agricultural industry chains. The plan encourages alliances and ventures with international agricultural enterprises to promote "production capacity cooperation" in areas such as agricultural machinery and equipment, pesticides, and fertilizer. Another strategy is to build overseas "agricultural cooperation parks" where conditions are ripe and where they can play a strong demonstration role.
The plan has several measures to boost China's exports of fruit, vegetable products, tea, aquaproducts and products with special features and high value. It encourages multinational agricultural e-commerce and creation of agricultural export exchange platforms. "Green" and organic fruit and vegetable production and export bases will be constructed in border regions.
Authorities also want to get a grip on the flow of agricultural imports. They promise to encourage imports of items that are in short supply in China while using trade remedy and compensation measures to shield domestic industries whose survival is threatened by import competition. The plan calls for "improving" the mix of global suppliers, diversifying sources of imports, and establishing stable suppliers of imports. Officials hope to collect more information, do more analysis of imports, and issue "early warnings." Inspection and quarantine measures will be improved and authorities will crack down on smuggling of agricultural products into China.
China aspires to "bring in" as well as "go out" in agriculture. China will try to attract inbound foreign investment to key areas like livestock, poultry, aquaculture processing, manufacturing agricultural machinery and equipment, and agricultural environmental protection. China plans to establish a complete foreign investment access and security management system, gradually adopting a management model of “before entry, national treatment, clear negative list”. Interestingly, China still hopes to get preferential loans from international financial organizations (e.g. World Bank, Asian Development Bank) despite having massive amounts of capital in its own banks and having started up its own competitor for the World Bank. According to the plan, China also aspires to get grants and aid from foreign governments for its major national agricultural development strategies.
Several articles on the Ministry of Agriculture web site this week indicate that "international cooperation" is the flavor of the month. On November 16, the Chinese Academy of Agricultural Sciences held a meeting to launch a "Global Agricultural Big Data Information Services Alliance". The alliance members are research institutes, universities, and agribusiness enterprises. The main function appears to be to act as a clearinghouse and think tank to collect information on agricultural science and technology around the world that Chinese agribusiness companies can use for their overseas investments and international cooperation projects, with emphasis on the "One Belt, One Road" strategy.
An Overseas Agricultural Research Center will be the "wings" that provide science, technology and information for agricultural companies "going global" to take off. The center says it has developed remote sensing to estimate crop yields in key countries, and issues information through the center's web site, a Wechat public account and publications called “overseas agriculture observer” and “agricultural science and technology cutting edge and policy advice.” It has supplied over 20 advisory reports to the Ministries of Agriculture, Science and Technology, and Finance, and the National Development and Reform Commission.
On November 14, the Tropical Science Institute held a meeting to form networks of scientific experts on tropical agriculture to support Chinese companies sharing technology with "One Belt, One Road" countries. Strategies include setting up agricultural demonstration parks overseas and "external cooperation experimental areas" to disseminate tropical agriculture technology, share personnel and set up industrial incubators. Target countries are in Southeast Asia, Africa, South Asia, and South Sea islands. Crops include rubber, woody oil crops, cassava, sugar, and sisal. The meeting held in Hainan was attended by 14 companies working in Colombia, Philippines, Vietnam, Cambodia, Laos, and Sri Lanka, and 12 research institutes.
The 13th Five-year Plan for China's grain industry calls for fostering "a certain number" of large multinational grain conglomerates. The government will encourage and support grain enterprises to develop diverse forms of multinational businesses engaged in large scale production, marketing and processing of rice, corn, soybean and palm oil in countries along the "One Road, One Belt."