Eyeing Global Food Crisis, Beijing Revives Elements of Planned Economy

China could revive key elements of its 20th-century economy to ensure domestic stability as a way to reduce its dependence on the West for imports, especially food from war-torn Ukraine, experts say.

Beijing is encouraging the development of agribusinesses and state-run canteens to help the government control the distribution of essential foods as relations between China and Western democracies falter. The canteens are similar to college cafeterias with limited offerings and prices that Beijing’s authorities consider cheap.

Xia Ming, a professor of political science at the City University of New York, told VOA Mandarin in a telephone interview on November 4, “The exit of retail and trading companies is often the result of a lack of funds. Many economic problems. If these problems lead to financial shortages, the country it must regulate things, especially these important things, to maintain order.

Wen Guanzhong, an independent professor of economics at Trinity College, told VOA Mandarin by phone on November 4 that “In general, because (Chinese president) Xi Jinping knows that he is taking a path that is different from the deep path. He also knows that China’s relationship with countries in the world the whole world, especially the Western countries, will be very difficult.

Xie Tian, ​​a professor of business at the University of South Carolina Aiken, said in an interview with VOA Mandarin on November 4 that, “I think that the CCP’s ambitions and desire to use power in Taiwan can happen soon. Canteens and supply and trade. cooperatives they can control the equipment and food during the war, which is the best way for China.”

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In Hubei province alone, authorities have restored and rebuilt 1,373 grassroots organizations with 452,000 members, according to a report last month in the Hubei Daily. Officials told a reporter that by 2025, cooperatives will have 1.5 million members.

In 2014, there were 696 co-ops in the province, a 61% decrease from a peak of 1,800 in 1984, according to a November 2 report by the government-affiliated Beijing Business Daily (BBD). Globally, BBD said, there are currently 31,000 sales and marketing organizations in China, with approximately 400,000 locations.

At the 20th National Congress of the Communist Party of China, which closed on October 22, Liang Huiling, who headed the All China Federation of Supply and Marketing Cooperatives, was promoted to a member of the CCP Central Committee. After the meeting, the organization also issued a recruitment document, which experts saw as a sign that China’s economic development will be led by a government that wants to improve self-reliance and economic security.

World food crisis

China is one of the world’s leading food exporters. According to a 2018 report by CSIS, a Washington-based think tank, China’s exports exceed its imports, resulting in a trade deficit.

Xia said China is looking for other sources of grain because of difficult relations with exporters such as the United States, Canada and Australia. Beijing’s fear is that if exporting countries cut back on trade with China for political reasons or to meet their domestic needs, prices could rise in China and cause domestic discontent.

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According to Reuters, the IMF said in September that disruptions to global grain flows caused by the war in Ukraine have led to the worst food security crisis since the 2007-2008 global financial crisis.

Xia said China’s refusal to publicly criticize Russia for its February invasion of Ukraine has deepened Western democracies’ dissatisfaction with China.

“When China wants to cooperate with Russia and fight the West, I think it will create more problems for itself in terms of food and energy security,” said VOA Mandarin. “So, if it wants to be anti-Western or use wolf warrior rhetoric, I think it should deal with (its consequences).”

Agricultural trade and marketing organizations first appeared in China in the 1950s as Beijing organized and controlled the economy. When Deng Xiaoping wanted to reform and open up the economy in 1978, trade and commerce organizations began to weaken, but they did not disappear.

Under the leadership of President Xi Jinping, the Chinese government has called for reforms to cooperatives and trade as part of its push to improve economic performance.

In 2021, Beijing decided to create a pilot project of “three-in-one” comprehensive cooperation in the production, supply and marketing of food that includes loans to farmers and retailers. About 49,000 government employees manage all sales and marketing activities from the regional level, according to the official website.

According to the figures for the first half of 2022 from the All-China Federation of Supply and Marketing Cooperatives, the sales and marketing of the whole system exceeded $435 billion (2.9 trillion yuan) – a year-on-year increase of 19.1%. In 2021, trade will reach about $926.9 billion (6.26 trillion yuan), according to government statistics.

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Concerned consumers

Consumers are worried that Beijing’s new focus on the retail and marketing industry and canteens could spell the death knell for traditional shops and restaurants, which are fueling the growing economy.

According to Chinese reports, Chinese officials last week tried to allay these concerns, saying that the re-opening of trade and marketing agencies will allow them to “use more of their land, improve regional sector activities, and promote rural renewal. .”

The officials added that community testing activities, including the construction of canteens, “are not mandatory, not everything on file should be tested.”

Wen said the difference between the cooperatives of the past and today “depends on how private enterprises are treated in the future, whether they are banned or whether the public sector provides and advertises products and is given a chance as a self-governing power.”

Xie believes that the state-led economy will have no influence on the market economy, which will ultimately affect the lives of the Chinese people.

He said, “Just like the canteens and cooperatives of the past, it is impossible to have the strength of the market economy when you return to the economy that you planned.” … can be provided, which will have a great impact on the lives of the Chinese people. ”


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