Key words: China's agricultural sector. WTO, mechanization, food import and export, structure of agricultural production

L. A. VOLKOVA

Candidate of Economic Sciences Institute of the Far East of the Russian Academy of Sciences

China's accession to the WTO (December 2001) was preceded by a multi-year (more than 10 years) and multilateral preparation of the country's economy, including agriculture, for work in the context of market legalization.

By the time of joining the WTO, unlike developed countries, not all Chinese enterprises engaged in primary processing of agricultural raw materials had the technical capabilities to control the quality of products at the proper level. In the first years of the country's membership in the WTO, there were 11 thousand enterprises preparing export products. And only about 200 large enterprises, whose production volume was more than $10 million, were relatively well equipped technically. During the entire period after China's accession to the WTO, work was carried out and funds were allocated for new technical equipment for agricultural enterprises. Special attention was paid to food safety issues, and funds were allocated for product quality control. The State Council of the People's Republic of China has issued relevant resolutions and notifications on these matters.¹

In general, the preparatory work carried out in China before joining the WTO played a positive role in adapting the country's agricultural sector to the conditions of this international organization, and contributed to the growth of foreign trade in agricultural products. A certain contribution to the development of China's trade cooperation with WTO member countries was also made by the positive results of the development of the agricultural sector during the last decade - 2001-2011. The possibility of increasing the import of individual crops, such as soybeans, helped to meet mainly domestic demand for these products without revising the structure of acreage with limited arable land resources.

During the years of its membership in the WTO, China collected rich grain harvests for seven consecutive years, and within 5 years their volume exceeded 500 million tons, which allowed us to talk about achieving food security in the country. There is no doubt that these successes were achieved not only due to WTO membership, but also its positive role cannot be ignored. The volume of foreign trade turnover of agricultural products in 2010 was $121.96 billion, compared to $27.92 billion in 2001, i.e. increased 4.4 times. At the same time, the growth of imports - an average annual rate of 22.3% - significantly exceeded the average annual growth of exports - 13.3%.

In 2008, China was second only to the European Union and the United States in terms of import operations with agricultural products, taking the 3rd place in the world. And in terms of export volume - the 5th place, after the EU countries, the USA, Brazil and Canada.

ON THE EVE OF JOINING THE WTO

Taking into account the success of market reforms in the agricultural sector and the requirements of the international market sphere, the Chinese leadership and academia conducted an "Analysis of China's agricultural policy and its modeling for the future" (CAPSIM) on the eve of WTO accession.

Two projects for the development of the agricultural sector were considered.

The first one was based on the fact that even in the era of globalization, the state will be able to provide price support to the domestic market of the country, and the price level in this market will be determined by the ratio of supply and demand within the domestic market.

The second project was based on the liberalization of the domestic market, which will develop particularly rapidly from the 2000s.It was assumed that by 2005 the domestic market for agricultural products will be fully liberalized, the degree of price support and control will be reduced to zero. This will help to balance the prices of domestic and foreign markets, which will be the biggest constraint on the impact of market liberalization on agriculture.

The authors of the projects envisioned the possibility of mutual influence of the two projects in practice and their combination in the future.

Table 1

Opportunities to supply livestock products for the period 1995-2020, thousand tons

Source: 1999-2000 Nannies: Zhongguo nongcun jingji xingshi Fenxi yu yuze (1999-2000: Economic situation in the Chinese countryside and forecast). Beijing, 2000, p. 53.

specific conditions. Balances of production, consumption, necessary import or possible export of certain types of agricultural products for the period 1995-2020 were compiled.

It was planned to increase grain imports, but its total volume should not exceed 4% of the volume of its consumption in the country. In 2020, it was planned to increase grain production to 548.2 million tons under the project of market liberalization, or to 557.6 million tons in accordance with the project of partial preservation of its state regulation. ³ Both figures were surpassed in 2011 - the gross grain harvest was 571.2 million tons ⁴.

A significant increase in feed grain imports was expected due to the growing demand for livestock products within the country. If in the early 1990s it was measured at 108 million tons, then by 2020 it should have grown to 215 million tons. In this regard, the need for feed grain could have increased by 2020, i.e. by 37%. The level of self-sufficiency of the country in grain at the beginning of the XXI century-96% was supposed to be preserved.

Due to the expected growth in domestic consumption of oilseeds and sugar, it was necessary to import these products, but their volumes should not exceed about 5% of the demand.

Exports of fruit and vegetable products were expected to grow, but it was assumed that due to high competition in the global market, their volumes would be limited and unlikely to exceed 2% of the gross production of these products by 2020.

With regard to livestock products: the first option provided for the possibility of exporting pork in the amount of 188 thousand tons by 2020 (exceeding production over domestic consumption), beef-10 thousand tons, and poultry meat was supposed to import approximately 260 million tons (see Table 1). The second option assumed a more impressive volume of pork exports - 6.017 million tons and poultry meat - 1.9 million tons, with a net import of beef of 346 million tons.

In connection with the planned WTO accession in the early 2000s, it was proposed to: 1) improve the structure of agricultural production, optimize it, reduce the acreage and production of agricultural crops with high production costs as much as possible. These crops include: maize, wheat, oilseeds and sucrose, legumes, and cotton. And increase the share of fruit and vegetable production.

In the overall structure of the agricultural sector - to increase the share of the livestock sector, whose products (except for milk and sheep wool) have relative advantages on the world market.

2) The next of the proposed measures in the agricultural policy that preceded WTO accession was the provision of support to

projects related to financing, lending, and expanding the information sphere. Financial support was provided for farmers who, in the first years after joining the WTO, might face employment problems and a possible decline in income. In this regard, local authorities at the level of the municipality and county were recommended to conduct explanatory work among farmers, as well as to ensure professional and moral training of farmers to work in the new market conditions dictated by the country's membership in the WTO.

In the years leading up to WTO accession and the first years in this organization, investment in fixed assets of the country increased annually: in 1999 - by 9.4% compared to the previous year, in 2000, 2001 and 2002-by 9.4%, 7.7% and 10.1%, respectively, which was not much lower than the rate of investment in fixed assets of the country. the growth of this item in the entire national economy of the country is ⁵.

3) Recommendations were proposed for the formation of a fair and competitive labor market, not to hinder its free movement in the regions of the country. Specific measures have been developed to move some of the people employed in the production of corn, wheat, legumes, cotton, and oilseeds to livestock and other non-agricultural sectors. Particular attention was paid to limiting the possibility of increasing differences in the incomes of farmers, which could negatively affect social stability in rural areas.

4) To increase the competitiveness of agricultural products in the international market, investments were increased in research and development, in the modernization of the production base in order to reduce its cost and improve quality, and special attention was paid to the fight against epizootics in livestock areas*.

5) Active support of production in industries with comparative advantages in the market was also considered as one of the conditions for the necessary preparation for WTO accession.

6) The prepared recommendations also included proposals for optimizing the structure of land use and enlarging its scale. Prior to this, the system of contract land use and property rights to land prevented the formation of larger farms. By the early 2000s, a single crop farm was cultivating an average of 0.4 hectares of land, while in many other countries crop farms had between several hundred and several thousand hectares of land. This allowed them to reduce the cost of fertilizers, insecticides, and most importantly-on labor per unit of production, which makes it more competitive in the global market. The share of labor costs in the cost of agricultural production in China is 40-60%, and in developed countries-about 5%⁶.

7) With regard to the openness of the market and the formation of market infrastructure, it was recommended to create market intermediary organizations that could establish links with market participants not only within the country, but also on an international scale. Construction of warehouses, transport and information networks in the country, classification of indicators of quality and grade of agricultural products, it was also necessary to prepare all this for effective functioning within the framework of the world trade organization. It was noted that cooperation with this organization could be facilitated by the creation of specialized peasant organizations, such as international organizations of farmers - producers of a particular type of agricultural products.

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