<div dir="ltr"><div class="gmail_default" style="font-family:verdana,sans-serif">This article contains some observations, hopes, and worries related to agricultural developments and food exports and imports between the U.S. and China. Some of the issues are also facing Vietnam, or will be in the future. <br>
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</span></font></i><h1 class=""><font size="4">Advancing Sino-US Relations: Putting Agriculture First – Analysis</font></h1><p>By <a href="http://www.eurasiareview.com/author/rsis/" title="Posts by RSIS" rel="author">RSIS</a></p>
<p>August 21, 2013</p><p><i>Notwithstanding the remarkable progress in agricultural
cooperation between China and US, potential threats lie ahead. Still
expanding agricultural ties can be the ballast in advancing Sino-US
relations.</i></p>
<p><b>By Zhang Hongzhou</b></p>
<p>TOP US and Chinese officials stressed the importance of building
mutual trust to ensure a strong, stable and mutually beneficial
Sino-American relationship, when they met in Washington last month.
While much of the focus of the annual US-China Strategic and Economic
Dialogue has been on hot topics such as cyber security, North Korean
nuclear issue and maritime security disputes in the Asia Pacific,
expanding agricultural ties should be made top priority to stabilise
Sino-US relations.</p>
<p>Agriculture is of great importance to both China and the United
States —the two biggest agricultural countries in the world. After three
decades of interaction both sides have developed strong agricultural
trade and investment ties, as well as extensive exchanges and
collaboration in other agriculture- related areas.</p>
<h2><font>Strong and mutually beneficial agricultural ties</font></h2>
<p>Building on this solid foundation, there are great opportunities to
further expand agricultural ties between two countries, which could
significantly contribute to overall Sino-US relations. Meanwhile, there
are also a number of urgent agriculture-related issues that might
potentially generate mutual distrust if their agricultural ties are not
well managed.</p>
<p>Sino-US agricultural trade has increased by over 900 per cent since
China’s accession to the WTO in 2001. The US enjoyed an agricultural
trade surplus of over USD 20 billion in 2012 with China, which was the
largest recipient of US agricultural exports. China was the US third
largest supplier of agricultural products while the US was the second
largest destination for China’s agricultural exports in 2012.</p>
<p>Rapid expansion of agricultural trade has brought enormous mutual
benefits in terms of improved food security, job creation, and overall
trade imbalance, to name but a few. Huge imports of soybean and cotton
from the US allow China to achieve 95 per cent cereal self-sufficiency,
which is the cornerstone of China’s food security. For the US, close to
USD 26 billion in agricultural exports to China provided jobs for over
200,000 Americans and generated an additional USD 36 billion in economic
activity in 2012.</p>
<p>Next, Sino-US agricultural investment cooperation has expanded
significantly over the last three decades. <span style="background-color:rgb(207,226,243)">American agribusiness firms
such as Monsanto, DuPont, ADM, Cargill and Bunge have invested billions
of dollars</span> in a wide range of China’s agricultural production
enterprises, ranging from cereal and soybean processing to production of
animal feeds, machinery, and seed. China’s investment in the United
States’ agricultural sector is also rising. Shuanghui’s purchase of
Smithfield at USD 4.7 billion in May 2013, the largest-ever purchase of
an American company by a Chinese firm, underlines the growing Chinese
agribusiness investment in the United States and the beginning of an
important new trend.</p>
<p>Sino-US cooperation in other agricultural areas has been very
impressive as well. Since 1980, with the establishment of a working
group on agricultural science and technology cooperation, both countries
have launched more than 500 exchange programmes, involving about 3,000
experts. Both countries have worked together very closely on issues
relating to food security and safety as well. In 2012, during Xi
Jinping’s visit to the United States, the two countries signed a
five-year Plan of Strategic Cooperation to guide discussions on food
security, food safety and sustainable agriculture.</p>
<h2><font>Expanding Sino-US agricultural ties</font></h2>
<p>China’s agriculture is undergoing the transition from small household
farming to commercial farming. This presents a golden opportunity for
the American agribusinesses, well-equipped with advanced technology,
top-notch management expertise, extensive experience and wide access to
information and markets. Likewise, as China increasingly turns to
overseas markets to meet its agricultural needs, its investment in the
United States’ agricultural sector will grow rapidly.</p>
<p>Next, given the widening gap between food demand and supply, China
will have to import more food from abroad. According to the latest
forecast by OECD and FAO, China’s imports of oilseeds, grain, pork,
beef, poultry and other agricultural products will continue to surge in
the next decade. Given the scale of China’s needs, few if any country in
the world except the United States could meet the Chinese demand.
Hence, China’s food imports from the United States are set to rise
rapidly in the future.</p>
<p>In addition, both countries’ agricultural production and food
security are subject to acute threats from climate change, environmental
pollution and degradation of natural resources, both countries need
closer cooperation. While close cooperation between the United States
and China on traditional security issues may be very difficult to
materialise, agriculture and food security could be an ideal field for
Sino-US cooperation to co-lead the international efforts to combat
challenges in agricultural production, climate change and degradation of
natural resources. This could have a positive spill-over effect into
other areas of cooperation between China and the United States.</p>
<h2><font>Threats to overall Sino-US relations</font></h2>
<p>While there are great opportunities ahead for the expansion of
agricultural ties between China and the United States, there are also a
number of potential agricultural issues that could threaten Sino-US
relations. As the most populous and famine prone country in the world,
food self-sufficiency is of paramount political and strategic importance
to China. Thus, with China’s growing reliance on the US for food, more
people from China begin to worry that the US is waging a food war
against China, leading to strategic distrust of China towards the US.
Furthermore, <span style="background-color:rgb(207,226,243)">row over genetically modified crops</span>, agricultural trade and
investment disputes as well as food safety issues would also undermine
overall Sino-US relations.</p>
<p>With strong will and concrete policies from both sides, the current
close and mutually beneficial agricultural ties between two countries
could become the stabiliser or “ballast” of Sino-US relations. This will
keep the two countries’ overall relationship “upright” as they sail
through stormy waters.</p>
<p><em><strong>Zhang Hongzhou</strong> is an Associate Research Fellow
with the China Programme at the S. Rajaratnam School of International
Studies (RSIS), Nanyang Technological University.</em></p><br><br clear="all"><div dir="ltr"><i><font size="1"><span style="color:rgb(153,0,0)"><div class="gmail_default" style="font-family:verdana,sans-serif;display:inline">
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