China agricultural service firms eye overseas market

Date:10-28-2021

By Zhong Nan

Trade in agricultural services will become a fresh growth point for domestic companies to invest in related projects abroad, as well as help ensure the world's food supply going forward, said government officials on Tuesday.

The global agricultural products market has been challenged by hindered international circulation, volatile trade policies and increased labor shortages since the outbreak of COVID-19, said Peng Yanjun, deputy director-general of the department of international cooperation at the Ministry of Agriculture and Rural Affairs.

To tackle these issues, the official said that promoting high-quality growth of China's trade in agricultural products requires industry players to focus on trade in agricultural services and build an advanced domestic base for business of this kind.

From the perspective of the industrial chain, the import and export of agricultural services can occur in the areas of production, processing, research and development, packaging, storage and transportation, marketing and retail.

Because the increasingly complex international investment environment has presented more difficulties for domestic companies to pursue "going global" strategies, Peng said, trade in agricultural services is a practical option to meet Chinese firms' demand to invest in overseas agricultural projects.

By providing full-process solutions for agricultural production in other parts of the world, this move will drive China's products, funds and technologies to be used overseas and expand the supply of staple foods as well as promote the upgrading of agricultural production in host countries, Peng added.

For example, China Railway 20th Bureau Group Corp, or CR20G－a subsidiary of State-owned China Railway Construction Corp Ltd－has helped farmers in its markets in Mozambique and other African nations achieve stable and high yields by introducing China's practical agricultural technologies, conducting related services and applying modern machinery for more than half a decade.

Backed by the China-Africa Development Fund, CR20G built a rice processing plant in Xai-Xai, capital of Gaza province, Mozambique, in 2017. The company has been running this project, China's largest rice planting project on the continent, for more than four years.

By the end of June, the project completed harvesting rice for the 2020-21 planting season, with a harvested area of 36,000 mu (2,400 hectares), yielding 16,600 metric tons of rice. All of the rice from the harvest has been sold in local markets, said Guo Wei, CR20G's country head for Mozambique operations.

Mozambican farmers harvest rice at the Wanbao Mozambique farm in the Xai-Xai district of the southern province of Gaza. [China-Africa Development Fund]

Zhang Jianping, director-general of the China Center for Regional Economic Cooperation in Beijing, said China's growing outbound direct investment in high-end manufacturing, agriculture, digital and innovation businesses is likely to lead a new round of "going global "for domestic companies.

This will provide opportunities for other countries to enhance ties with China and increase their ability to avoid risk as the country has ensured the smooth operation of the global supply chain, Zhang said.

Nie Fengying, deputy director of the Agricultural Information Institute of Beijing-based Chinese Academy of Agricultural Sciences, said that based on the institute's latest study, both the output and consumption of various grain and livestock products in China will continue to increase over the next 15 years.

"China's imports of rice, soybeans, beef and dairy products will grow during this period, while imports of wheat, corn, pork and poultry will decline," said Nie, adding that the country is fully capable of ensuring absolute safety of rations and basic self-sufficiency in staple grains and pork throughout this period.

China saw imports of agricultural products surge 12.3 percent to 1.07 trillion yuan ($167.67 billion) in the first three quarters, including 160.79 billion yuan worth of meat and 102.08 billion yuan worth of grain, said the General Administration of Customs.