Chinese Farms Go Global
Image Credit: flickr/Biawak_gila

Chinese Farms Go Global


If the Chinese government is to achieve its goal of accelerated urbanization, one issue it must deal with is food security.

Already, as China has developed more of its land, concerns have developed over whether enough arable land will be available to produce enough food to feed its massive population.

This problem has serious implications. As Katherine Morton, a specialist on Chinese environmental governance, notes: “Ten percent of the Chinese population is estimated to be undernourished, the rural labor force is declining, and agricultural productivity is increasingly vulnerable to climate change, natural disasters and water shortages.”

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She goes on to explain, “For planning purposes, China must have at least 120 million hectares of arable land to produce enough food to meet future demands. But around two-thirds of available land in China is now classified as either barren or low in agricultural potential…”

Despite its long-standing policy of being agriculturally self-sufficient, the Chinese government has tried to cope with rising food insecurity by encouraging overseas investment in agricultural farms around the world, including in Mexico, Cuba, Russia, Kazakhstan, Cameroon, Uganda, Tanzania, Laos, the Philippines, and Australia.

A 2012 report from the International Institute for Sustainable Development (IISD) examined China’s domestic and global agricultural investment strategies, and found that China is becoming increasingly dependent on agricultural imports. Indeed, the IISD report notes that soybeans have become China’s main imports, accounting for 38 percent of total agricultural imports, while other major agricultural imports include cotton (9 percent), and palm oil (8 percent). The majority of these imports come from Asia, North and South America, and Africa.

Some Chinese farmers, like Zhu Zhangjin, believe this new trend of outsourcing will help strengthen food safety standards and improve quality, while lowering production costs and increasing profit margins. Zhu has followed other individual farmers, agribusiness corporations, and governments by buying huge tracts of land in countries like Brazil and Australia.

While outsourcing agriculture has its benefits, as evident from the sheer number of countries pursuing this avenue, there are also many potential problems with transnational land investments. For the investor, these challenges include having to secure large plots of land in order to achieve economies of scales, high transportation costs, political unrest in recipient states, and hostility and resentment from local populations.

Chinese investors have been no exception as they have encountered increasing hostility from local populations in purchasing land in areas like South America and Africa, including the charge that this new wave of outsourcing is the equivalent of “neocolonialism.”  

These allegations are inaccurate though, since neocolonialism involves a relationship whereby a state’s policy is influenced by the political, military, or economic leverage it exercises over an external actor. In the case of agricultural outsourcing, there is no loss of sovereignty in recipient countries – even if trade patterns resemble those in colonial times.

As Deborah Brautigam, an expert on China-African relations and Director of the International Development Program at John Hopkin’s SAIS, explained in a recent interview with The Diplomat, observers accusing China of neocolonialism are using an “oversimplified idea of ‘neocolonialism’ – i.e. that China exports manufactured goods and imports raw materials. This structure of trade is accurate – but it’s a very narrow definition. Colonialism is about domination and political control, occupation and military force. This is hardly true of China in Africa.”

Furthermore, charging China with neocolonialism absolves the governments in recipient countries of all blame. As Brautigam adds, “I think those who use this term fail to appreciate that African economies are already structured as raw material exporters. It is up to Africans themselves to develop other kinds of attractive export products.”

Indeed, countries like Brazil have found ways to resist eager Chinese investment in its arable land by strengthening regulations on foreigners purchasing land.  If other countries are opposed to the increasing attention they are receiving from international land investors, they too can pass laws to keep investors in check and focus on developing other export industries.

Nonetheless, China has been proactive in devising ways to ensure that local populations benefit from its investment policies. As the IISD report cited above notes, “Acquiring farmland is one of the investment strategies that China is pursuing. But it is part of a much broader strategy that includes joint ventures with local governments or local companies and contracts with local farmers.”

Locals are often able to benefit from the investment by continuing to work on the farms rather than being replaced by Chinese labor that is imported for specific projects. Furthermore, in many countries Chinese investment in land leads to sharp rises in its productivity due to the importation of modern technology and additional investments in key irrigation infrastructure. In some cases, Chinese investment in other types of infrastructure like roads and ports can expand these benefits to other local industries.

Nevertheless, local grievances need to be considered and addressed when companies, states, and individuals invest in countries with rich, arable land. For instance, local farmers need to be fairly compensated if they are asked to move off land that is being used for transnational land investments. As mentioned above, local farmers should be given the option of continuing to work the land, and local food security should be guaranteed before any of the harvest is exported to other countries.

In adopting these methods, investors can avoid charges of neocolonialism and the accompanying local hostility that puts investments at risk.

Elleka Watts is an editorial assistant at The Diplomat.

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