China – now the world's biggest consumer of energy, grains and many raw materials – is aiming to become more "self-sufficient" even as globalized markets tie the world closer together. On Wednesday, Bloomberg News reported that Zeng Liying, the deputy director of China's State Administration of Grain, projected a bumper autumn crop that will provide enough grain for domestic demand.
The government is trying to limit imports of foreign corn – this next year, it may produces as much as 156 million tons while importing between 3 million and 5 million tons.
In a world where countries are increasingly interdependent on each other for basic commodity staples, China's approach is notable. The nation welcomes globalization – insofar as it can export manufactured goods to the developed world and receive outside investment – but it charts its own course in terms of securing supplies of certain goods.
The country may also be reacting to the disastrous drought and high temperatures which seared crops across the Black Sea region, causing Russia to lock down grain exports until 2011. The Ukraine also imposed export quotas, and the result has been chaos across European commodity markets and many poor nations.
Riots have erupted in Mozambique, just as they did in 2008-2009 when food prices spiked globally. Commodity futures brokers in Paris and other European trading centers worried that Russian exports might be stopped at the harbor and not arrive for delivery, and countries like Egypt, which import huge amounts of grain, were forced to turn to the U.S. and other suppliers.
In this context, China's emphasis on self-sufficiency makes a lot of sense. It also has a vast population of poor farmers and laborers who rely on subsidized grain to survive, and it needs to make sure that these people remain content.
"It's really hard to gauge what the government may do, but my guess is they may not participate in the procurement of the harvest fearing that will drive up prices," Feng Lichen, the general manager at Yigu Information Consulting, told Bloomberg News. "It’s possible China may abandon its policy of maintaining a certain level of stockpiles."
It's not just grain, either – China has invested heavily in mines and farmland across Africa, building a small empire of commercial and political interests in one of the few undeveloped frontiers remaining. It's investing heavily in renewable energy like solar and wind power to reduce its dependence on foreign oil imports, and it's recently come under fire for limiting exports of key rare-earth minerals used in manufacturing high technology.
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