Commentary on Political Economy

Thursday 20 August 2020

STARVE THE CHINKS TO DEATH !

 

Xi’s Crusade on Food Waste Triggers Rare Anxiety Over Supplies

Bloomberg News
Updated on 
  • Timing of massive ‘Clean Plates’ campaign is puzzling experts
  • Country’s food supply chain in spotlight after a volatile year
Employees of a catering company throw out expired food in Changsha, March 2020.
Employees of a catering company throw out expired food in Changsha, March 2020. Photographer: Yang Huafeng/China News Service via Getty Images

A new national campaign against food waste in China has sparked a rare bout of speculation over the government’s ability to safely feed its 1.4 billion citizens when faced with floods, epidemics, locusts and rising tensions with some of its biggest trading partners.

The sudden and massive push to curb the problem of discarded leftovers -- known as the “Clean Plates Campaign” -- has puzzled experts who keep a close watch on the world’s biggest consumer of everything from grains to meat. Government officials have stressed that the country’s food reserves are ample, but some observers have nevertheless questioned the timing of a campaign aimed at reducing consumption when China’s economy is still recovering from the effects of the coronavirus epidemic.

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Bloomberg spoke with almost a dozen agricultural traders, food company officials and industry researchers this week about the initiative, the majority of whom said they believed the push was targeted at reducing dependence on food imports in preparation for possible supply disruptions. China’s Ministry of Agriculture did not immediately respond to a request for comment.

“Fears of supply disruptions due to Covid-19 have caused China’s leaders to re-emphasize food security and self-sufficiency,” said Darin Friedrichs, a senior analyst at StoneX Group Inc. in Shanghai. “This includes diversifying where grain is sourced from abroad, but also making efforts to reduce food waste domestically,” he said.

Political tensions have threatened trade flows in some commodities, and earlier this year governments started reducing exports and safeguarding local supplies because of worries over the coronavirus -- limiting the availability of food shipments to other countries. Heavily reliant on protein imports to feed its citizens, concerns about breaks in the global food supply chain are particularly salient for China, whose Communist Party leaders have long made economic development and personal enrichment a centerpiece of their rule.

The world could be facing “multiple famines of biblical proportions within a short few months,” Executive Director of the World Food Programme David Beasley warned in April, citing the impact of the coronavirus epidemic as well as more frequent natural disasters and changing weather patterns.

Pestilence and locusts

Biblical developments have contributed to concerns over China’s food supply this year. The country’s southern provinces have experienced massive flooding and swarms of locusts. Pork prices are beginning to tick up, even as China attempts to rebuild its supply of pigs after an outbreak of African Swine Fever devastated herds, contributing to an overall jump in food inflation.

Rising pork prices in China fuels consumer inflation

Fears that imported goods might be contaminated by the coronavirus have added to the pressure, with the southern city of Guangzhou ordering cold storage companies to suspend imports of frozen meat and seafood from virus-hit regions after the local government in nearby Shenzhen discovered Covid-19 on chicken wings imported from Brazil.

President Xi Jinping’s push to tackle the “shocking and distressing” problem of discarded leftovers has been swift and intense, with the national legislature scheduled to fast-track new rules as part of the effort. Livestreamers who film themselves eating huge amounts of food have been censured (such ‘eating shows’ are popular in parts of North Asia), while catering associations have urged restaurants to put limits on the number of dishes patrons can order.

Xi has been encouraging his country to build-up its domestic economic strength in the face of intensifying external risks, including rising tensions with the U.S. Some veteran China watchers believe the food waste campaign, kicked off by the president last week, is part of a similar long-term effort to increase self-sufficiency in food. Agriculture Minister Han Changfu stressed this month the importance of keeping the people’s rice bowl filled with locally grown grain.

Rising Trade

Chinese imports of food products continue to rise

Source: China General Administration of Customs, Bloomberg calculations

As China releases combined Jan. & Feb. trade data, Bloomberg assigned half of imports to each month. Some data not available for July yet.

The campaign suggests that the government has started preparing for a theoretical worst-case scenario of a food supply shortage, said three of the people surveyed by Bloomberg. They declined to be identified given the topic’s sensitivity in a country where food holds pride of place in many homes, and where memories of the Great Famine under Chairman Mao Zedong still linger.

“Food security is an important foundation for state security. Food wastage appears to be about individual behavior, but it could lead to extensive perils,” a People’s Daily analysis said last week. There are about 35 million tons of food wasted in China every year, representing almost 6% of total output, it said. Food supply in China will be tightly balanced for an extended period given rising costs, limited resources and solid demand, the analysis added.

CHINA-ECONOMY-FOOD
A staff member sets up signs encouraging people not to waste food at a restaurant in Hebei province on Aug. 13. Photographer: AFP via Getty Images

Great Decoupling in Grains

China’s rapid economic development has drastically altered the nation’s food needs, with citizens in cosmopolitan coastal provinces demanding much more meat, chocolate, wine and coffee in recent years. That’s helped contribute to skyrocketing consumption of animal feed, and dramatically increased China’s dependence on foreign crops including American soybeans, Australian barley, and African cocoa and coffee beans.

So far there’s no sign that China has been procuring less food from overseas. Imports of farm products have been growing fast this year, with purchases of U.S. corn and soybeans accelerating in recent months. China has also boosted its estimate for soybean imports for the current marketing year to a record of 96 million tons, citing strong demand for protein-rich soymeal for animal feed.

Although U.S. exports of agricultural and related products to China in the first half of this year reached about 20% of the 2020 target of $36.5 billion agreed under the phase one deal, the Trump administration still says Beijing is trying to comply with the agreement. Shipments were 6.3% higher than the same period in 2019, according to data from the U.S. Department of Agriculture.

“They’re buying a ton of commodities, particularly agriculture commodities,” Larry Kudlow, Trump’s top economic adviser, told Fox News on Thursday. “So far, so good.”

China's imports of farm products still growing fast despite Covid

Still, China has often used trade restrictions to advance its geopolitical goals. Xi’s government halted some beef imports from Australia, and placed tariffs on the country’s barley shipments in May following the conclusion of an earlier anti-dumping probe. China’s ambassador to Canberra said in April that his country’s consumers might choose to boycott Australian goods.

“In the context of the Great Decoupling, Beijing will, where possible, buy from countries in its sphere of political and economic influence,” Diana Choyleva, chief economist at Enodo Economics, wrote in a report published last week, noting that the country’s large grain reserves were likely “overstated.”

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