One way China still really,

really needs the U.S.

China needs way more soybeans, cotton and meat
than it can produce. The U.S. is happy to provide.
By Lydia DePillis-March 17 at 10:28 AM
On Monday, we took note of the fact that China's faltering construction sector
has meant that all the steel it's churning out -- which hasn't slowed down a bit -- is
flooding world markets. And that's the typical trade story with China, where the low
cost of production and strategic currency management helped propel its trade surplus
with the United States to arecord high last year.
But all that changes when it comes to food: China is importing more and more of its
agricultural commodities from the United States.
The U.S. Department of Agriculture has a new report that puts this in perspective. In
the years after the normalization of trade relations in 2000, U.S. manufacturing firms
rapidly shifted production to China, resulting in the loss of hundreds of thousands of
American jobs. Agricultural trade, however, is a mirror image: During that period, the
United States sold far more farm goods to China than it bought.

China has been importing a lot more from the United States than it's been exporting. (USDA)

Not only that, but the United States trounced most other countries in gaining access to

the Chinese market:

(USDA)

So why do trade flows in agriculture look so much different from those in

manufacturing? Partly, it has to do with evolving consumer tastes. Rising incomes in
China have meant more meat consumption. The Chinese government has tried to
prevent meat imports from growing too fast, but producing livestock domestically
requires a tremendous amount of feedstock -- especially soybeans -- which the United
States is well-equipped to supply.
At the same time, China hasn't been able to increase its food exports as dramatically,
because of the rising costs of labor and land, as well as concerns about food safety that
don't apply in the same way to things like textiles and electronics.
All of this is concerning to China, which is looking for ways to maintain as much
control over its food supply as possible, even if it can't produce it at home. That's given
rise to a breed of international relations known as "farm diplomacy," the study's
authors write, as the country negotiates agreements with other nations over
commodity imports. Chinese companies have also been buying U.S. agricultural
companies outright -- most notably in the2013 acquisition of Smithfield Foods, the
world's largest pork producer.
The United States' export success, however, probably won't have as big of an effect on
domestic employment as its manufacturing losses. The number of people needed to
produce food in America has declined steadily throughout the century, as
mechanization made most tasks obsolete, and it's projected to decline even
further through 2022. That means big profits for agribusiness but not much in the way
of new jobs.

Lydia DePillis is a reporter focusing on labor, business,

and housing. She previously worked at The New Republic and the
Washington City Paper. She's from Seattle.
Posted by Thavam