The United States is one of the world’s leading exporters of agricultural products, and its exports to China have grown steadily over the past several years. The US shipped $15.8 billion in agricultural products to China in 2019, up from $13.2 billion the year before. That makes it the largest exporter to China of agricultural items, ahead of European nations and Brazil. China is one of the key export markets for US agriculture and one of the fastest-growing destinations for American farm produce.
China is a major consumer of agricultural products, and the US has become its biggest supplier in recent years. US firms are able to take advantage of lower labor costs and an established network of producers and distributors in the US to provide competitively priced exports to China’s booming markets. In addition, US agricultural exports to China often come with better quality control than do those of other countries. This has helped increase American product competitiveness in the Chinese market.
US exports of agricultural products to China have grown significantly over the past decade. US exports of corn, wheat, soybeans, pork, and beef to China have all increased significantly compared to the previous decade. US corn exports to China, for example, have grown from $383 million in 2009 to $2.1 billion in 2019. US soybean exports to China have increased from $2.4 billion in 2009 to $4.5 billion in 2019. These increases are largely driven by increased demand for food in China.
US agricultural exports to China have also benefited from rising incomes and improved access to food in China. The Chinese government has invested heavily in food security and agricultural production, which has stimulated demand for agricultural products and helped spur the growth of US agricultural exports to China. The Chinese government has also implemented tariff reductions and other trade reforms that have helped reduce the cost of imported agricultural items.
US agricultural exports to China have been supported by the government’s agricultural trade policies. These include the Renewable Fuel Standard, which subsidized advanced biofuels made in the US, and the US-China Phase One trade agreement, which included improved access to China’s markets for US agricultural products. In addition, the US has also made significant investments in agricultural research and development, which have helped US farmers increase the productivity and quality of their crops.
Government Incentives
The US government has taken steps to promote US agricultural exports to China. The USDA’s Market Access Program provides financial and technical assistance to US agricultural producers looking to expand their export markets. In addition, US Trade Representatives have pushed for lower tariffs on US agricultural exports to China. This has helped make US agricultural exports more competitive in the Chinese market.
The US government has also provided technical assistance to agricultural producers looking to export to China. Through the Technical Assistance for Specialty Crops program, the government provides resources to help US producers better understand the Chinese market and meet regulatory requirements. The USDA also works with US agricultural trade associations to provide market intelligence and connect producers to buyers in China.
Trade Barriers
Despite the growth of US agricultural exports to China, there are still significant trade barriers that need to be addressed. Chinese regulations often make it difficult for US producers to access the Chinese market. For example, the Chinese government’s system of quotas and tariffs can limit the amount of imports allowed into the country. In addition, the Chinese government often imposes stringent food safety requirements that can make it difficult for US producers to meet.
In addition, the US and China have yet to sign a comprehensive bilateral trade agreement that would provide more predictability to US agricultural exporters. Without such a deal, US agricultural exporters face an uncertain and potentially volatile trading environment. This can make it difficult for US producers to access the Chinese market and make long-term investments in export markets.
COVID-19 Impact
COVID-19 has also had a significant impact on US exports of agricultural products to China. Chinese demand for US agricultural exports has been affected by the pandemic, as the Chinese economy has slowed down and consumer spending has declined. In addition, trade restrictions due to the pandemic have put a strain on the global supply chain, and the closure of Chinese ports has disrupted the flow of agricultural exports.
US producers have responded to the pandemic by diversifying their export markets and increasing their focus on domestic markets. They have also shifted their focus to higher-value and more profitable products, such as organic and high-end processed foods. US producers have also taken advantage of new and existing export markets outside of China, such as Canada and India.
Conclusion
The US has become an increasingly important supplier of agricultural products to China over the past decade. US agricultural exports to China are driven by increased incomes, improved access to food, government policies and incentives, as well as trade agreements. Despite the growth of US agricultural exports to China, there are still significant trade barriers, and the COVID-19 pandemic has had a significant and unpredictable impact on US exports of agricultural products to the Chinese market. US producers have responded by diversifying their export markets and focusing on higher-value products.
