China junks limits on import of US soybeans and pork for now

Chinese consumers are not happy about higher prices and decreased supplies of food.  Yesterday, Chinese buyers snapped up "at least 10 boatloads of soybeans," according to Reuters, as the U.S.-China trade war showed signs of compromise.  The South China Morning Post reports:

Beijing will allow Chinese businesses to purchase a "certain amount of farm products such as soybeans and pork" from the United States, according to the Xinhua report. "China's market is big enough and there's great potential to import high-quality US farm products."

The official Xinhua News Agency reported on Friday that China's National Development and Reform Commission and the Ministry of Commerce made the exemption in response to the US' decision of postpone an increase in the tariff rate on $250 billion of Chinese goods from October 1 to October 15.

It comes after US President Donald Trump spoke on Thursday of the possibility of an "interim trade deal" over the coming weeks.

It added that Chinese authorities hoped that "the US will honour its word and fulfil its promises to create favourable conditions for cooperation for the two countries in the agriculture sector".

A two-week delay in higher U.S. tariffs and vague mention of a "possibility" led China to take a move that created a surge in U.S. exports to China.  Gordon Change sees this as indicating China's lack of leverage:

The last thing China's leadership wants is for people there to be unable to afford eating meat.  Starvation is a persistent theme in Chinese history, and under Mao, tens of millions died of it.  A current epidemic of swine flu is severely affecting China:

An epidemic of African Swine Fever is sweeping through China's hog farms, and the effects are rippling across the globe, because China is a superpower of pork. Half of the world's pigs live in China — or at least they did before the epidemic began a year ago.

"Every day, we hear of more outbreaks," says Christine McCracken, a senior analyst at RaboResearch, which is affiliated with the global financial firm Rabobank.

McCracken and her colleagues now estimate that by the end of 2019, China's production of pork could be cut in half. "That's roughly 300 million to 350 million pigs lost in China, which is almost a quarter of the world's pork supply," she says. "It's a massive number." (This measures the reduction in pigs slaughtered annually, which is roughly twice the number of animals in China's swine herd at any one time.)

The pork shortage that is resulting will affect celebrations of the 70th anniversary of the Chinese Communist Revolution on October 1.  In traditional China, where ordinary people could not afford to eat meat (pre-eminently, pork) on a regular basis, they did eat meat at holiday festivals.  It would be extremely embarrassing for the regime to be unable to supply affordable meat for the tables of the country as the celebration of the anniversary is underway.

Soybeans are used to feed pigs, as well as to make tofu and soy sauce.  So Gordon Chang is correct that China really, really needs American food, especially right now.  It's much easier to postpone a new iPhone or flat-screen TV for the duration of the trade war than to postpone eating.

Photo credit: Pxhere.

Chinese consumers are not happy about higher prices and decreased supplies of food.  Yesterday, Chinese buyers snapped up "at least 10 boatloads of soybeans," according to Reuters, as the U.S.-China trade war showed signs of compromise.  The South China Morning Post reports:

Beijing will allow Chinese businesses to purchase a "certain amount of farm products such as soybeans and pork" from the United States, according to the Xinhua report. "China's market is big enough and there's great potential to import high-quality US farm products."

The official Xinhua News Agency reported on Friday that China's National Development and Reform Commission and the Ministry of Commerce made the exemption in response to the US' decision of postpone an increase in the tariff rate on $250 billion of Chinese goods from October 1 to October 15.

It comes after US President Donald Trump spoke on Thursday of the possibility of an "interim trade deal" over the coming weeks.

It added that Chinese authorities hoped that "the US will honour its word and fulfil its promises to create favourable conditions for cooperation for the two countries in the agriculture sector".

A two-week delay in higher U.S. tariffs and vague mention of a "possibility" led China to take a move that created a surge in U.S. exports to China.  Gordon Change sees this as indicating China's lack of leverage:

The last thing China's leadership wants is for people there to be unable to afford eating meat.  Starvation is a persistent theme in Chinese history, and under Mao, tens of millions died of it.  A current epidemic of swine flu is severely affecting China:

An epidemic of African Swine Fever is sweeping through China's hog farms, and the effects are rippling across the globe, because China is a superpower of pork. Half of the world's pigs live in China — or at least they did before the epidemic began a year ago.

"Every day, we hear of more outbreaks," says Christine McCracken, a senior analyst at RaboResearch, which is affiliated with the global financial firm Rabobank.

McCracken and her colleagues now estimate that by the end of 2019, China's production of pork could be cut in half. "That's roughly 300 million to 350 million pigs lost in China, which is almost a quarter of the world's pork supply," she says. "It's a massive number." (This measures the reduction in pigs slaughtered annually, which is roughly twice the number of animals in China's swine herd at any one time.)

The pork shortage that is resulting will affect celebrations of the 70th anniversary of the Chinese Communist Revolution on October 1.  In traditional China, where ordinary people could not afford to eat meat (pre-eminently, pork) on a regular basis, they did eat meat at holiday festivals.  It would be extremely embarrassing for the regime to be unable to supply affordable meat for the tables of the country as the celebration of the anniversary is underway.

Soybeans are used to feed pigs, as well as to make tofu and soy sauce.  So Gordon Chang is correct that China really, really needs American food, especially right now.  It's much easier to postpone a new iPhone or flat-screen TV for the duration of the trade war than to postpone eating.

Photo credit: Pxhere.