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Prospects of Chinese Grain Supply and Demand in 2010: A Regionalized Multimarket Model Simulation and Policy Implication

Wencong Lu () and Lutz Kersten

No 25662, 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia from International Association of Agricultural Economists

Abstract: Based on China's Agricultural Regional Market Equilibrium Model (CARMEM), the paper projects the production and consumption of rice, wheat and maize in China toward 2010 at both national and regional level under two different scenarios. The results show that China can ensure a stable grain market development under more liberalized internal and external conditions. Transmission of the world market prices as projected by the World Bank (2003) to the Chinese domestic market would lead to a long-run recovery of the growth in grain production. Total production of paddy rice, wheat and maize is forecast to increase from 386 million tons in the base period 2002 to over 420 million tons in 2010. However, the rate of grain self-supply will be 91% due to higher demand. This may be significantly lower than the target of the Chinese government. The corresponding deficit would amount to about 35 million tons, to be compared with 38.5 million tons in 2002 when China had huge grain stocks available. Three fifths of the grain deficit is wheat. China would also become a net importer of maize. The regional results indicate an increasing grain deficit in East and South China. Northeast and North China will achieve higher production growth mainly due to a rapid increase in maize production. The Central South will be able to increase production faster than consumption. The Southwest and Northwest will maintain their current deficit. Finally, some implications for future Chinese grain policies are discussed.

Keywords: Crop; Production/Industries (search for similar items in EconPapers)
Pages: 15
Date: 2006
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DOI: 10.22004/ag.econ.25662

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