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The 11th Five-year Development Plan on Export of Agricultural Products
The Ministry of Commerce
Contents
Preamble
I. Guiding Concepts and Principles
II. Analysis on Export Competitiveness of Agricultural Products
III. Development Objectives for Export of Agricultural Products
IV. Policy Measures to Enlarge Export of Agricultural Products
Preamble
China is a big agrarian country, and the Communist Party of China (CPC) and Chinese Government regard the settlement of the issues
concerning rural areas, agriculture and farmers as their long-term task. The formulation of this 11th Five-year Development Plan
on Export of Agricultural Products, the analyses on the situation in the international trade of agricultural products, and the definition
of the development objectives and strategic measures constitute an important measure to enhance the international competitiveness
of China’s agricultural products, to enlarge the export of agricultural products and to solve the employment problems in rural areas
and increase the income of farmers, reflect the implementation of the scientific concept of development, the balancing of urban and
rural development, the balancing of development among regions, the balancing of economic and social development, the balancing of
development of man and nature, and the balancing of domestic development and opening wider to the outside world, and are also a necessary
requirement to build an all-round well-off society.
With the continual enhancement of the international competitiveness of China’s agricultural products in the 10th Five-year period,
China’s export of agricultural products has seen a strong development and an increasingly-expanded scale, increasing from $16 billion
USD at the beginning of the 10th Five-year period to $27.18 billion USD in 2005 with a growth rate of 70%, accounting for 3.6% of
China’s total export amount ($762 billion USD) of that year and 9.6% of the added value of agriculture (RMB 2271.8 billion Yuan)
of that year. Besides, China’s ranking in world’s trade of agricultural products has incessantly moved upwards, and according to
the statistics by the World Trade Organization (WTO), China’s export of agricultural products ranked the 5th place in the world in
2004, accounting for 3.2% of world’s trade of agricultural products and enjoying a growth compared to the beginning of the 10th Five-year
period.
In the 10th Five-year period, China’s export of agricultural products has experienced 4 changes:
(1)
Changes have taken place in the structure of commodities in that the labor-intensive products with comparative advantages have played
a leading role in the export. Such advantageous commodities as horticultural, livestock and poultry, and aquatic and marine products
had an export amount of $18.36 billion USD in 2005, accounting for 67.5% of the whole export amount of agricultural products. Meanwhile
the exported agricultural products have rapidly been diversified, having now more than 1300 kinds over the former more than 900 kinds,
and many miscellaneous articles have become leading exports. China now has the largest export volume of such agricultural products
as garlic, peanut, broiled eel, canned mushroom, cider, shiitake fungus, bee honey etc., and the second largest export volume of
tea, canned tomato paste, sausage casing, tobacco, maize etc. As far as the geographic distribution is concerned, a series of bases
for the production and processing of agricultural products have taken shape everywhere, such as the vegetable export base in Shandong
Province, the flower export base in Yunnan Province, the processing of broiled eel in Fujian Province, the shiitake fungus in the
Provinces of Zhejiang, Fujian and Henan, the apple and cider in the Provinces of Shanxi and Shandong etc. And the processing skill
of agricultural products has constantly been improved in that some products have had a mature and complete industrial chain covering
the breeding, processing, packaging, transporting, marketing and development of new products.
(2)
Changes have taken place in the composition of exporters in that foreign-funded and private enterprises have become main exporters.
The situation in the export of agricultural products at the beginning of the reform and opening-up characterized by a monopoly of
a few foreign trade companies and a purpose of earning foreign exchanges has now been replaced by one characterized by an exporter
composition of 17,600 enterprises and an active participation in the international competition upon the comparative advantages, and
the enterprises with an integrated system covering growing, producing and trading have become leading exporters.
The amount of agricultural products exported by foreign-funded enterprises in 2005 reached $11.7 billion USD, accounting for 43% of
China’s whole export amount of agricultural products, and running ahead of state-owned enterprises as top exporters. And the amount
of agricultural products exported by private enterprises has now accounted for 25% of China’s whole export amount of agricultural
products instead of a share of 7% at the beginning of the 10th Five-year period.
(3)
Changes have taken place in the export modes, and the business modes of “company plus base” and “company, base plus farmer” have gradually
been popularized, and the export enterprises have had a stronger consciousness of quality safety. Most export enterprises of agricultural
products have possessed their own production bases, carried out a standardized production, established gradually a scientific and
effective quality monitoring system, enhanced their consciousness of quality safety, and done better in breaking the technical barriers.
Some enterprises have accomplished an integration of growing, producing and trading, marching towards a modernized agriculture characterized
by high quality, high yield, high efficiency, environmental friendliness and safeness. More and more export enterprises have obtained
universal certifications in that there are now nearly 1,000 enterprises having obtained the Quality Assurance International Organic
Certification and there are more than 2,000 enterprises having obtained the certification of the HACCP (Hazard Analysis and Critical
Control Point).
(4)
Improvements have taken place in the market structure, and a diversified market structure has gradually been taking shape. Despite
the fact that Japan, Hong Kong Special Administrative Region, the European Union, the United States, Republic of Korea and the ASEAN
countries have long remained China’s traditional market for export of agricultural products, and that the 6 main markets still share
more than 80% of China’s total export volume, China’s export to the emergent markets has seen a far rapid growth rate compared to
that of the traditional markets, and up to 2005, China’s agricultural products have been sold to more than 200 countries and regions.
In the 10th Five-year period, some commodities have experienced a diversified market structure, entering into the developed countries
and emergent markets: realizing a large-scale export of grain products to Taiwan Province, and the African and West Asian markets
etc., thus breaking the former market structure with Japan, Republic of Korea and Southeast Asia as the main market; experiencing
a breakthrough in the export of fruits to North America, Europe and Latin America; resuming the export of livestock to the Mid-Eastern
region after a suspension of 8 years.
For a long time, the export of agricultural products has played an important role in encouraging employment in the rural areas, increasing
the income of farmers, optimizing the industrial structure in the rural areas, enhancing the international competitiveness of the
agricultural products, promoting the level of domestic relevant industries, and settling the issues concerning rural areas, agriculture
and farmers.
(1)
Increasing the income of farmers. Although under the present condition the agricultural products are oversupplied in domestic markets,
the export of agricultural products still bring more profits than being sold domestically. In some main producing areas, the export
of agricultural products has become the main income source for the farmers there.
(2)
Encouraging employment in rural areas. The export of agricultural products has brought about the development of the agricultural,
manufacturing and service industries, creating a large quantity of jobs for these industries. According to the statistics by experts,
every $10,000-USD export of agricultural products can create about 20 jobs both directly and indirectly. Based on the export amount
of agricultural products in 2005, the export of agricultural products has totally created more than 54 million jobs.
(3)
Promoting the development of agriculture. In order to accommodate the high standard and strict requirement in the international market,
the standards for China’s export of agricultural products have incessantly been optimized in the aspects of base building, variety,
quality, packaging, warehousing and transportation, brand etc., meanwhile China has introduced in a large amount of foreign varieties,
capitals, technologies and advanced managerial experiences during the opening-up of its agriculture. The export-oriented agriculture
has been developed in many regions, and some bases for the production and export of advantageous agricultural products have taken
form, such as the vegetable export base in Shandong Province, the flower and tricholoma matsutake export base in Yunnan Province,
the processing of broiled eel in Fujian Province, the apple and cider in Shaanxi Province, and the tomato in Xinjiang Uyghur Autonomous
Region etc.
At present, many problems still exist in China’s export of agricultural products, for instance, the quality safety remaining to be
improved, a strong impact of foreign technical barriers, a failure of establishing and perfecting the policy system for the promotion
of the export and development of agricultural products, a lack of core competitiveness in the export enterprises of agricultural
products etc. And if these problems remain unsettled, the growth and sustainable development of the export of agricultural products
will be seriously restrained. China is now in the WTO post-transition period when its agriculture is confronted with a fully-increased
competition pressure, and China’s traditional small-sized and decentralized operation of agriculture cannot pose a threat towards
the large-scale modernized agriculture of foreign countries, and this situation will not be fundamentally reversed in rather a long
time. The unfair international environment for the trade of agricultural products due to the strongly-subsidized and highly-protected
agriculture of the developed countries will not either be fundamentally changed in a short term. Therefore, during the 11th Five-year
period, stress shall be put in the settlement of a series of policy issues that influence the export of agricultural products, in
the creation of sound policy and trade environment, in the improvement of the export-promoting mechanism, in the full enhancement
of the quality safety of the products, in the support of the export enterprises of agricultural products, and in the enhancement
of the international competitiveness of China’s agricultural products so as to make the export of agricultural products play an active
role in readjusting the agricultural productive structure and in advancing a modern agricultural construction.
I.
Guiding Concepts and Principles
1.
Guiding Concepts
To uphold Deng Xiaoping Theory and the Important Thought of “Three Represents” as the guidance, to fully implement the spirit of the
16th National Congress of the CPC and the 5th Plenary Session of the 16th Central Committee of the CPC, to closely center on the
objective of building a new socialist countryside, to implement of the scientific concept of development, to employ all available
means to enlarge the export of agricultural products, to promote the change of the growing mode for the export of agricultural products
and the readjustment of the export structure, to improve the quality and hygienic safety of agricultural products, to develop the
agriculture characterized by high yield, high quality, high efficiency, environmental-friendliness and safeness, to promote the agricultural
products to rise in value through processing and transformation, to enhance the export competitiveness of agricultural products,
to foster the export enterprises of agricultural products, and to advance the sustainable development for the export of agricultural
products, so as to make China’s agriculture more open to the outside world, and make contributions to increase the income of farmers,
to optimize the agricultural productive structure, to promote the industrialized operation of the agriculture, and to advance the
agricultural modernization.
2.
Fundamental Principles
(1)
To adhere to the scientific concept of development and to encourage employment in rural areas and increase the income of farmers.
To promote the settlement of the issues concerning rural areas, agriculture and farmers serves as the current basic task in enlarging
the export of agricultural products. The development of the export of agricultural products shall be based on serving the overall
situation of the economic and societal development so as to bring into full play its important roles in encouraging employment in
rural areas, in promoting the increase of the income of farmers and the readjustment of the agricultural productive structure, and
in enhancing the competitiveness of the agriculture.
(2)
To adhere to proceed according to the practical situation, and to bring into full play the comparative advantages. China’s export
of agricultural products is still in its primary phase, in that it remains far behind China’s overall development of foreign trade,
that the export enterprises have a smaller scale and a weak strength, that the quality and processing of products remain unsatisfactory,
that the quality and efficiency of the export of agricultural products remain unsatisfactory, and that its roles in encouraging employment
in rural areas, in increasing the income of farmers and in readjusting the industrial structure of the agriculture remain to be further
strengthened. Therefore, the extension and development of the export of agricultural products shall be based on the characteristics
of China’s agricultural resources and giving full play to the advantage of an abundant labor force, and on the avoidance of disadvantages
of shortage of land and water, shall proceed according to the practical situation and scientifically formulate the development objectives
and strategic measures and put them into implementation.
(3)
To adhere to technological innovation, and to emphasize the fostering of the core competitiveness. The essence of the international
competition of agricultural products is the technological competition, and thus the technological innovation is the orientation for
the future competition of agricultural products. In the 11th Five-year period, we shall carry out the strategy of thriving the trade
through science and technology, and shall quicken the pace of technological innovation and structural update, enhance the processing
of agricultural products, optimize the structure of the export products, and strive to enhance the technological content and added
value of the export agricultural products through the introduction and self-development of new products and technologies.
(4)
To adhere to the market-oriented reform, and to actively foster exporters. We shall bring into full play the fundamental role of market
in distributing resources, emphasize the creation of a sound operational environment for market subjects, coordinate the state’s
macroscopic objectives and the microscopic behaviors of market subjects, and promote the sustainable development of the export of
agricultural products.
(5)
To adhere to the development principles of stressing key points and making overall plans. In the 11th Five-year period, we shall mainly
support the extension of export in the areas where the export of agricultural products is obviously advantageous, the export of such
advantageous agricultural products as vegetables, fruits, tea, aquatic and sea foods, poultry etc., and the enterprises have an integrated
system of growing, processing, and trading, a productive base of their own, a guarantee of product quality, a strong processing capability,
and obvious competition advantages. Meanwhile, due attention shall be given to a balanced development among different regions, industries,
enterprises, products and markets, and the short-term and long-term objectives shall be planed as a whole.
3.
Development Strategy
According to the abovementioned guiding concepts and fundamental principles, China’s overall strategy in enlarging the export of agricultural
products during the 11th Five-year period is to establish a strategy of comparative advantages based on the export of low-cost and
labor-intensive agricultural products, to enhance the international competitiveness of the export of agricultural products with the
quality safety as core, and to establish a global export system of agricultural products characterized by a diversification of markets.
To improve the policy measures in promoting the export of agricultural products, to actively cope with the complicated international
competition, to make China’s agriculture more open to the outside world, to optimize the industrial structure, to encourage employment
in rural areas, and to increase the income of farmers.
(1)
To establish a strategy of comparative advantages based on the export of low-cost and labor-intensive agricultural products
In quite a long time henceforth, such labor-intensive agricultural products as aquatic products, livestock, horticultural products
and processed products etc. will still have a strong comparative advantage in the division of labor and competition in the international
market. To establish an export development strategy of comparative advantages is for the purposes of promoting the strategic readjustment
of the agricultural structure and enhancing the efficiency in resources distribution, and of releasing the employment pressure in
rural areas and changing the function of export from “foreign exchanges contribution” to “employment contribution”. This is not only
the need of bringing into full play the advantages in China’s agriculture and taking part in the international competition, but also
a strategic choice to build a modernized agriculture, to develop rural economy, and to increase the income of farmers.
(2)
To enhance the international competitiveness of the export agricultural products with the quality safety as core
At present, China’s export agricultural products are vulnerable to the restriction of technical barriers of foreign countries due
to such quality safety issues as the epidemic diseases, residue of pesticide and veterinary medicine, and environmental pollution
etc, restraining the full play of the advantages of aquatic products, livestock, fruits and vegetables etc. Besides the full play
of the competition advantages of labor-intensive agricultural products, we shall fully enhance the core competitiveness of China’s
agricultural products and establish a reputation in the international market through enhancing the quality safety of products, incorporating
technological innovations and structural updates, introducing from developed countries and regions the quality varieties, food processing
technologies, marketing modes, advanced experiences in international operations so as to enhance the core competitiveness of the
export of agricultural products and hold a good reputation in the international market.
(3)
To establish an export market system of agricultural products characterized by a diversification of markets
In recent years, China has exported more agricultural products to Oceania and South America, however, the high dependence on such
traditional markets as Japan, Republic of Korea, the ASEAN, and the European Union etc. remains unchanged. Because international
trade frictions are frequent in the trade of agricultural products, the over-concentration of export markets makes China’s products
vulnerable to restrictions of technical barriers, antidumping and other non-tariff barriers from importer countries, and goes against
the avoidance of risks in the international market and the establishment of a stable export-promoting mechanism for agricultural
products. Therefore, we shall gradually readjust the market structure for the export of agricultural products, establish a global
export system of agricultural products characterized by a diversification of markets, by means of stabilizing and enlarging such
traditional markets as Japan, Republic of Korea and the ASEAN etc., deeply developing such markets with huge potentials as the European
Union and the United States, and actively developing such emergent markets as Middle East and the Commonwealth of Independent States
etc.
II.
Analysis on Export Competitiveness of Agricultural Products
1.
International Environment for Export of China’s Agricultural Products
(1)
The global trade of agricultural products grows steadily. After a negative growth during the 3 years from 1997 to 1999, the global
trade of agricultural products began to grow steadily, and especially in 2003 and 2004 it kept a growth rate of more than 10%. According
to the statistics by the WTO, the global trade of agricultural products from 2000 to 2004 has seen an average annual growth rate
of 9%, tantamount to the growth rate of global goods trades.
(2)
The developed countries have more shares in the trade of agricultural products. Compared to the 1960s, the developed countries have
had a share of more than 70% against the former less than 60% in the international trade of agricultural products, and the developing
countries have now a share of less than 30%. This is because the developed countries are able to export and import more agricultural
products due to the strong competitiveness of their agricultures and their abundant purchasing power, and because the primary agricultural
products, as main exports of the developing countries, have had a continuously-dropping price.
(3)
The consumption structure has changed; the processed end-products have more shares. Grains have a continuously-decreasing share in
the consumption of foods, while the aquatic and marine products, vegetables, and fruits have a steadily-increasing share. Consumers
in the United States now annually consume 25% more vegetables and fruits than they did 20 years ago, and have a rapidly-growing demand
for organic foods. The end products that can be directly consumed have now a share of 30% against less than 20% in 1980.
(4)
The international environment for agricultural competition remains unfair. Agricultures in the United States, the European Union and
other developed countries remain highly subsidized, and such export-supporting policies as export subsidy and export credit etc.
remain applicable there. The huge subsidy gravely distorts the international trade of agricultural products in that the agricultural
competitiveness of developed countries is enhanced, and the competition advantages of agricultural products from developing countries
including China are neutralized, and that agricultures in developing countries are badly impacted, causing huge damages to those
developing countries that are unable to subsidize their agricultures and making China’s agricultural products difficult to enter
into the markets of developed countries. Besides, traditional tariff-rate quota, tariff peaks, tariff escalation, seasonal tariff,
and non-tariff barriers represented by technical trade barriers exist ubiquitously, acting as a big obstacle for China’s export of
agricultural products.
(5)
The new round WTO talk on agriculture proceeds slowly due to the anfractuosities of interests, and the effort to establish a new rule
and order for international agricultural trades proceeds with difficulties. In quite a long time henceforth, China’s export of agricultural
products will be confronted with extremely complicated international competition environment. The international market access conditions
for agricultural products have not been effectively improved, and serious problems exist in the tariff peaks and tariff escalation
for agricultural products, and the antidumping and special safeguards against China’s agricultural products may be continuously escalated.
2.
Comparative Advantages of China’s Export Agricultural Products
China has an arable land of 1.95 billion mu (1 hectare=15 mu), only 10.4% of China’s territory; China has a land per capita of 1.5
mu, less than 1/2 of world’s average, and has a tendency of further decrease; China’s water per capita is of 1/4 of world’s average.
Given China’s practical situation in agricultural resources, the development of land-intensive agricultural products is less advantageous;
as a result, such land-intensive products as wheat, cotton, and soybean etc. are disadvantaged in the international competition of
agricultural products. Contrarily, China has an abundant and low-cost labor force, and such labor-intensive agricultural products
as livestock, horticultural products etc. have relatively strong export potentials. During the 11th Five-year period, the export
of labor-intensive agricultural products will keep strong competitive advantages.
(1)
Advantages in the diversity of agricultural resources. Spanning the subtropical zone and temperate zone, China has diversified climatic
conditions and natural resources, producing various kinds of agricultural products and thus meeting the diversified demands in the
international food market. China is now bringing full play the regional comparative advantages, emphasizing the fostering of advantageous
agricultural products and producing areas, and building producing bases for advantageous agricultural products, namely the main producing
areas of orange in the upper-and-middle reach of the Yangtze River, South of Jiangxi Province, South of Hunan Province, North of
Guangxi Zhuang Autonomous Region, South of Zhejiang Province, South of Fujian Province, and East of Guangdong Province, the apple
producing area in Bohai Bay and Loess Plateau in Northwest China, the beef cattle producing area in Central China and Northeast China,
the mutton sheep producing area in Central China, Inner Mongolia, Hebei Province, Northwest China, and Southwest China, the milk
producing area in Northeast China, North China, Beijing, Tianjin, and Shanghai, the aquatic products breeding area in Southeast Coastal
Area, Yellow Sea and Bohai Sea. In most areas of China, the raising of livestock and poultry and the growing of vegetables have all
comparative advantages.
(2)
Advantages in labor force resources. According to studies, China’s agricultural sector needs only a rational labor force of 196 million
persons, while in 2002 those employed in the agricultural sector reached 325 million persons with a surplus labor force of 129 million
persons. And according to the estimates by the Ministry of Agriculture, the surplus labor force in rural areas will reach 180 million
persons at the end of the 10th Five-year period, providing for quite a long time low-cost labor force to the production, processing
and service of export agricultural products. Those abovementioned conditions are very beneficial to the development of labor-intensive
agricultural products. China’s vegetables, fruits, livestock, aquatic products have an obvious lower domestic price compared to the
international one, possessing an advantage of cost and price competitiveness.
(3)
Advantages in market locations. Asia is a market with the most importance and growth potentials for world’s trade of agricultural
products, and Asian market imported 23% of world’s agricultural products with Japan, Republic of Korea, Hong Kong SAR, Taiwan Province,
Indonesia, Thailand etc. as important import countries and regions of agricultural products in 2004. Thanks to the short distance
and transportation and sale conveniences, China has an obvious location advantage in export to the Asian market such high-value agricultural
products as vegetables, fruits, aquatic products, meats etc.
3.
Main Problems that Impact China’s Export of Agricultural Products
Despite that China needs to readjust its strategy of low-cost competition advantage in the long run, China still needs to bring into
full play its comparative advantage and enlarge the export of agricultural products in the near future. At present, a series of problems
are impacting China’s full play of its export advantage, and restraining the effective translation of the resource and comparative
advantages of China’s agricultural products into competition advantages and export growth.
(1)
Quality safety management of export agricultural products needs to be further strengthened. In recent years, China’s export agricultural
products have enjoyed a constantly-raised quality safety level; the enterprises have enjoyed a constantly-strengthened consciousness
of quality, and most of export enterprises of agricultural products have obtained their own producing bases, realizing a standardized
production and gradually establishing a scientific and effective quality monitoring system. However, influenced by the overall agricultural
productive mode, the quality safety needs to be further enhanced, and the issues of quality and hygiene remain an important factor
in restraining China’s extension of export.
(2)
Foreign technical barriers will render a long-term obstacle to China’s export of agricultural products. Developed countries have continuously
elevated their technical standards on import of agricultural products, covering eco-environment, animal welfare, intellectual property
rights and other fields. Japan and the European Union have successively revised their laws concerning food safety and hygiene; Japan
formulated the Positive List System for Agricultural Chemical Residues in Foods, greatly elevating the testing standards for agricultural
chemical residues in foods; the European and American developed countries raised a demand of quality traceability for agricultural
products and foods, raising thresholds for China’s export of agricultural products.
(3)
The export-supporting policy system has not yet taken form. Difficulties in financing and the high credit threshold have become the
most important factor in restraining the development of exporter enterprises. The financial institutions in some areas offered to
export enterprises of agricultural products a one-year loan with interest rate of 9-10%, far beyond the capacity of these enterprises;
land, mountain forest, agricultural infrastructure and other assets cannot be mortgaged for loans; and the high export cost impacts
the benefits of the enterprises. The developed countries have continuously elevated the technical standards for import agricultural
products, as a result of which, China’s export agricultural products have to undergo more and more testing indexes and thus have
higher export co
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