Another Xi blunder: China desperate for Aussie wheat

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The blunders just keep piling up for the dictator. Having already spiked higher Australia’s terms of trade with his trade war on himself, now the problem is food. Via the anti-Australian rabble at SCMP:

Despite warnings that Chinese authorities might block Australian wheat amid an escalating political row, wheat exports to China surged last month, underscoring a year in which overall trade between the countries approached a record high.

After three months in which there had been no wheat trade between the two countries, hundreds of thousands of tonnes changed hands in December, valued at A$248 million (US$191.2 million), according to preliminary trade data from the Australian Bureau of Statistics (ABS).

The exchange came in sharp contrast to the tensions that rocked the China-Australia relationship for most of 2020.

The CCP is kicking the dog as usual:

Beijing must hold provincial Communist Party secretaries and governors personally responsible for adequate grain output, the country’s new agricultural minister said this week, calling this “the most important and necessary step” in ensuring China’s food security.

The comments serve as the latest sign that Beijing is ramping up its efforts to increase reliance on domestic harvests to feed the nation’s 1.4 billion people.

Tang Renjian, the newly installed minister of agricultural and rural affairs, also mapped out a to-do list to improve the country’s crop production this year, including increasing the corn acreage and increasing self-sufficiency in edible soybeans, to keep the annual grain output over 780 billion kg (1.72 trillion pounds).

The dictator needs somebody to blame. After all, food security is getting steadily worse:

As was predicted, via the Journal of Integrated Agriculture:

China’s food supply and demand have significant implications for both China’s own national food security and that of the world. This study reviews China’s food security prospects and their implications, focusing on international trade in the coming decade. The results show that China’s policies for ensuring food security will be enhanced and China will move to sustainable agriculture. Most studies anticipate that China will increase its food and feed imports in the coming decade. China’s overall food self-sufficiency is likely to fall from 94.5% in 2015 to around 91% by 2025. The greatest increases in imports are likely to be soybean, maize, sugar, and dairy products. However, within the production capacity of the major exporting countries and of many food-importing developing countries, China’s additional imports of 3 to 5% of its total food consumption in the coming decade are unlikely to threaten global food security. Indeed, the projected imports of feed and several foods could provide opportunities for many exporting countries to expand their production and save global resources.

Once again, all the CCP has illustrated with its Australian blockade is that China can’t build, make stuff or keep warm without commodity supply chains. Now that truth has spread to the exceedingly basic problem of getting enough food on the table.

Late last year, as part of an effort to reassure bullied Indo-Pacific allies, the US reconstituted its First Fleet carrier group to sail directly across those supply chains…permanently.

If the dictator had in mind undermining China’s strategic outlook he could not have done a better job.

About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.