Friday, February 18, 2011
China's Shifting Needs
According to USA Today China will have an increased demand for the US's agricultural resources. China is already the number one importer of US agricultural products, but due to China's rapid growth and a severe drought in northern China, their need for commodities like grain and meat from other countries has soared. The countries expanding middle class has also increased their need for imported foods because of the rising incomes. As increasingly well-off consumers get fewer of their calories from rice and wheat, they will demand more from high-value products such as meat, fish, dairy and fruit. China plans to use this demand to garner as much economic growth as possible. China's goal of course is to be as self sufficient as possible so they've increased the quantity of the staple foods like rice.
China's rapid urbanization has created a scarcity of land more so than a scarcity of labor. Because of the scarcity of labor China imports land intensive crops and exports labor extensive products. One example of that trend is China's purchases of raw soybeans to be crushed in China for oil. These shifts are obviously more in line with China's comparative advantage.