China under pressure due to the planned explosion in domestic demand

At a time when experts are predicting an explosion in China's domestic demand over the next five years, Beijing is beginning to worry about shortfalls in its agricultural supply.

China's Deputy Minister of Agriculture, Chen Xiaohua, sounded the alarm in an interview with the business and financial newspaper Shanghai Securities News on 29 January 2011.

He declared that over the 2011-2015 period China will consume an additional 4 million tonnes of cereals, 800,000 tonnes of vegetable oil, and 1 million tonnes of meat each year. In order to meet this increase in demand the government has decided to increase its agricultural production and is therefore boosting subsidies to the agricultural sector.

As part of its 12th five-year plan (2011-2015), the government is planning on introducing new measures to modernize agricultural infrastructure, increase farmers’ income, and combat excessive speculation on agricultural financial markets.

China's new fears only go to confirm what everybody already agrees upon - that the explosion in Chinese demand and changes to the Chinese diet are likely to increase the strains on agricultural commodity markets. It is therefore urgent that the international community act immediately to brace itself for this turbulence and so avoid further protectionist measures which will merely increase if agricultural markets are under too much stress.