An Empirical Analysis of Factors Affecting China's Comprehensive Grain Production Capacity

Jingrou Luo

Financial Economics Insights, 2024, vol. 1, issue 1, 1-9

Abstract: China, with the largest population in the world, is also the largest grain consumer. Grain security is fundamental to national welfare and the economy, playing a crucial role in socioeconomic development. Since the reform and opening-up, China's grain output has doubled, successfully overcoming the global grain crisis in 2006 and the global food crisis caused by the COVID-19 pandemic in 2020. However, we cannot be overly optimistic; we must realize that China's grain output growth has relied on soil fertility depletion and excessive pesticide and fertilizer usage, putting significant pressure on the environment. This paper analyzes the factors influencing China's grain output based on data from 1980 to 2020. Through this, it reflects the comprehensive grain production capacity and offers feasible suggestions based on the findings. The analysis is carried out from both theoretical and empirical perspectives. On the theoretical side, the paper considers the impact of variables such as the area of irrigated arable land (X1, in thousand hectares), total agricultural machinery power (X2, in ten thousand kilowatts), grain crop sowing area (X3, in thousand hectares), fertilizer use (X4, in ten thousand tons), and natural population growth rate (X5, in percentage) on grain output. On the empirical side, five grain-related indicators are selected for principal component analysis, and the model is tested using Eviews. The relative importance of factors affecting comprehensive grain production capacity varies with different stages of grain production and development. Finally, the paper offers recommendations for improving China's comprehensive grain production capacity based on the research findings.

Keywords: grain security; comprehensive grain production capacity; significance test (search for similar items in EconPapers)
Date: 2024
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