In late December 2023, the People’s Republic of China’s (PRC’s) Ministry of Agriculture and Rural Affairs (MARA) approved 37 genetically modified (GM) corn varieties and 14 GM soybean varieties after a three-year trial. These varieties were bred for stronger herbicide and insect resistance and produce higher yields compared to conventional soybeans. The approval is the first of its kind by the PRC government for staple food crops, expanding the commercial use of GM technologies long restricted to cotton and papaya.

The PRC’s decision to introduce GM seed cultivation and commercialization is part of a broader effort to increase domestic food production and thereby reduce reliance on global markets. Beijing’s aims are the result of national security concerns as China seeks to insulate itself from a volatile international environment, but they are also indicative of domestic issues. Feeding a growing and increasingly prosperous population from a dwindling and depleted arable landmass necessitates agricultural reform. But obstacles to this reform have proven difficult to overcome. Beijing’s interest in GM crops has direct and indirect implications for Australia’s agricultural exports in both the short and long term. 

Soybeans are crucial to China’s food security and are commonly used in animal food, human food, and industrial products. Although the PRC is a major soybean grower (current annual output is estimated at 20 million tons), the country is also the world’s largest soybean importer.

Since more than 88% of its soybean consumption relies on imports, China is vulnerable to global market fluctuations. In 2023, Chinese soybean purchases reached 99.4 million tons — an 11.4% increase from 2022. These imports came mainly from the United States, Brazil, and Argentina.

China’s import reliance is a reversal from the early days of the PRC. From 1949 to the mid-1990s, the PRC was the world’s largest producer and a net exporter of soybeans. However, World Trade Organization negotiations in the lead-up to China’s accession in 2021 forced Beijing to lower its overall agricultural tariffs and subsidies to the domestic agricultural industry.[i]

China’s domestic production of soybeans quickly shrank due to the availability of cheap imports. Between 2008 and 2013, the physical area dedicated to soybean production decreased by 24%. Meanwhile, driven by a booming feed sector and declining domestic production, China’s soybean imports soared, increasing from 1 million tons in 1996 to more than 94 million tons in 2023. Recent estimates suggest that the country accounts for more than 60% of the global soybean trade.

Imported soybeans are genetically modified and are mainly processed to produce meal for animal feed[ii] and cooking oil. Soybean oil is the primary edible oil in China, accounting for about 42% of the total edible oil consumption in the country.[iii] Locally produced soybeans are non-GM and primarily used for direct human consumption (such as in tofu, soymilk, and soy sauce).

Consumption of edible oils and soybean meal has outpaced the growth of the consumption of non-GM soybean food products.[iv] Further increases are expected as rising incomes and urbanization shift consumption habits and dietary preferences, including increased consumption of livestock (which feed on soybeans), soybean-based foods, and nutritional supplements. According to one estimate from the U.S. Department of Agriculture (USDA), by 2028–2029, China’s imports of soybeans are expected to reach as high as 126 million tons. 

Food security has been a top priority for Chinese authorities for thousands of years and remains so today. A Chinese idiom holds that “people regard food as their heaven” (民以食为天).

Since the implementation of Deng Xiaoping’s reforms, domestic food production in China has rapidly increased following incredible economic growth. Yet memories of the political turmoil associated with the famines and food shortages of the 1950s and 1960s remain in the minds of older high-ranking officials, including President Xi Jinping.

In recent years, officials have been giving food security increasing importance. In the face of an increasingly complex global environment, food security has risen to the same level as financial and energy security. China’s top leaders, including Xi, have publicly emphasized the importance of safeguarding food security. The issue was reinforced by China’s national and domestic five-year plans, such as the 14th Five-Year Plan (PRC State Council, March 13, 2021) and other key Chinese Communist Party (CCP) documents, including Xi Jinping’s 20th Party Congress Report.

Xi famously declared that the rice bowls of China’s 1.4 billion people “will always be firmly held in their own hands” (牢牢端在自己手中). He has also publicly linked food supplies to national security, while also describing food security as a “matter of national importance.”

Yet the country’s food security has deteriorated significantly in recent decades. In 2004, China moved from being a net exporter of food to a net importer. The widening import-export gap has raised concerns about an overreliance on international markets for food supplies, which could make China vulnerable to export bans and global price fluctuations. Skyrocketing food consumption coupled with the loss of viable farmland, partly due to urbanization, have made these issues more acute.

Agricultural production challenges also clarify the need for GM crops. China’s limited water resources and arable land, significant soil pollution, and competing land uses make domestic production and self-sufficiency difficult to achieve. Making matters worse, low yields and low wages for farmers, growing costs of soybean production, and increasingly devastating climate change impacts further complicate matters.

In this light, Beijing’s continued interest in GM seeds as a potential partial solution to these interlinked concerns can be seen as a response to both domestic challenges and broader geopolitical concerns.

In response, China’s top leaders have frequently highlighted the importance of food security and of increasing agricultural production to safeguard it. Minister of Agriculture and Rural Affairs Tang Renjian has emphasized the utility of seeds and cultivated land. Numerous policy measures and national documents also highlight the issue: under the 14th Five-Year Plan (2021–2025) on Crop Farming, for instance, Beijing plans to produce 23 million tons of soybeans by 2025.

The central government is also critically concerned about “food chokepoints.” Global food security is increasingly dependent on the movement of food from a few major breadbasket regions to food-deficit areas across the world. When it comes to soybeans, three countries — the United States, Brazil, and Argentina — contribute 80% of global soybean exports. As international trade in key agricultural inputs grows, pressure is mounting on a small number of chokepoints.

After all, reliance on foreign soybeans was a weakness that was exploited by the United States during the Trump-era trade war. It remains a weakness, as soybeans constituted nearly half of record-high agricultural exports from the United States in 2023. Amid rising tensions between the United States and China over the South China Sea and Taiwan, Beijing fears the country’s food supply (in terms of both availability and prices) could be affected by potential maritime embargoes in times of military clashes over these territories.

Commercializing GM crops and increasing agricultural production of soybeans could help bring China closer to food self-sufficiency.

Mutual mistrust between the United States and China, plus the possibility of Donald Trump returning for a second term as U.S. president, raises questions about the relationship’s trajectory. In the past two years, the United States reported record exports of agricultural products to China. Soybean exports accounted for nearly half of U.S. agricultural exports to China at a record USD 16.4 billion in 2022, representing an increase of more than USD 2 billion year-on-year. While China recently bought U.S. soybeans in a sign of good will, it is not clear whether the United States will maintain its role as one of the country’s major soybean suppliers in the long term.

Fellow BRICS members Brazil and Argentina could be more secure sources of soybeans. Brazil is the world’s largest soybean producer and Argentina is the third largest. At present, Brazil sends more than 70% of its soybean exports to China; Argentina sends more than 90%. Beijing may use new bilateral agreements on agricultural cooperation to buy more Brazilian soybeans in place of U.S. imports or continue searching for alternative suppliers. Moving away from U.S. imports will likely also strengthen Beijing’s impetus to use domestically produced GM crops.

Although Beijing has not publicly stated that it aims to commercialize GM crops for domestic human consumption, doing so would fit the broader context of China’s responses to food insecurity.

The PRC’s focus is evident in its legislative and policy measures. The 2015 National Security Law (国家安全法) enshrined various aspects of food security as tasks for preserving overall national security. More recently, a report from the State Council to the Standing Committee of the 14th National People’s Congress (NPC) proposed eight tasks to ensure national food security, including strengthening the country’s capacity building. Xi’s remarks at the Central Rural Work Conference reaffirmed this, stressing that both CPP committees and governments must be held accountable for food security. Similarly, the current Five-Year Plan highlights food security, while 2023’s “No. 1 policy document” (the country’s rural blueprint) emphasizes “a strong country must have a strong agricultural [sector]” (强国必先强农). It explicitly ties food security to “Xi Jinping Thought on Socialism with Chinese Characteristics for the New Era” and the concept of “Chinese-style Modernization.”

The PRC’s Food Security Law (粮食安全保障法) came into effect on June 1, 2024. Adopted by the NPC in December 2023, the law builds on these previous pieces of legislation, as well as the 2022 Black Soil Protection Law (黑土地保护法) and the 2021 Anti-Food Waste Law (反食品浪费法).

GM crops stand to bolster domestic production and enable further self-sufficiency. They could allow Beijing to meet its targeted domestic soybean output of 23 million tons by 2025. In recent years, the country’s top policymakers have urged progress in the commercial planting of GM soybeans. Specific legislation has passed here, including registration requirements for herbicides used on GM crops. Additionally, the 14th Five-Year Plan on the Bioeconomy (2021–2025) emphasizes modernizing bio-agriculture. A certification standard for GM crops helps clear the path for domestic commercialization, including for soybeans.

Some progress has been made. In 2021, Agriculture Minister Tang Renjian laid out a clear path for seed makers to seek approval for corn varieties that integrate GM traits. In 2023, MARA announced it would plant around 4 million mu (660,000 acres, or 1% of the country’s cornfields) with GM corn that year. It also expanded a pilot program that would plant GM soybeans in 20 counties across five provinces: Hebei, Jilin, Sichuan, Yunnan, and Inner Mongolia Autonomous Region.

So far, most investment in GM crop development comes from the government. State-owned enterprises (SOEs) and research centers (e.g., the Chinese Academy of Agricultural Sciences, a national research institution directly under MARA) have a broad mandate encompassing research and development (R&D). More than 7,600 seed companies make up the private sector, though it is only responsible for 10% to 20% of R&D. However, China’s overall R&D capabilities are relatively weak due to low investment and weak copyright protection. Despite ranking first in the world for seed-patent applications, the majority of China’s 1,225 patents come from a single SOE.

SOEs such as China National Agrochemical Corporation (ChemChina) have played a significant role in acquiring foreign agribusinesses to support domestic genetically modified organism (GMO) research. In 2017, ChemChina acquired Syngenta, a Swiss agribusiness and global powerhouse in GMO crop development, for USD 43 billion, thereby becoming one of the world’s largest agrochemical and seed companies. This is only one of several international mergers in recent years.

Yazhou Bay Science and Technology City is pursuing technological solutions. Established a few years ago to support R&D, the area includes Nanfan, the seed “Silicon Valley” and the PRC’s largest agricultural breeding base. At present, the Nanfan base houses nearly 800 seed research institutions and businesses. In an apparent success, cultivars bred in Nanfan constitute more than 70% of the PRC’s approved new crop varieties such as hybrid rice varieties. It is unclear if any GM seed R&D is taking place in Nanfan, but seed companies interested in GM seed development such as Dabeinong Group (大北农集团) and Yuan Long Ping High-Tech Agriculture (隆平高科) have offices or labs there.

GM commercialization in China has stalled partly due to public opposition. Consumers have long been highly skeptical about eating GM food due to concerns that it causes serious illnesses in humans. Strong skepticism among consumers has merged with suspicion of Western threats to the country’s food security to create a negative perception of GM foods in China’s population. These concerns have been buttressed by negative commentary and food safety scandals. In an influential Global Times op-ed in 2013, People’s Liberation Army Major-General Peng Guangqian (彭光谦) claimed the West was using GM crops to threaten China’s food security and MARA officials and bioscientists received bribes from multinational companies to commercialize them. Around the same time, reports of widespread illegal planting of foreign-developed GM crops fuelled fears about foreign control of China’s GMO market. In another food safely incident in 2008, baby formula contaminated with melamine (a chemical used to make plastic) killed six babies and poisoned 300,000 children.

Chinese consumers, unsurprisingly, are wary of food safety standards and generally have a poor opinion of GM foods. Recent surveys indicate 55% of Chinese consumers are opposed to eating GM foods; nearly 60% lack trust in scientists studying the issue. Another survey from 2018 found that only 12% of Chinese consumers had a positive view of GM food.

Certain Communist Party behaviors further exacerbate public concerns. Top leaders have their own food supply chain (特供食品), a practice that dates back to the Mao era. This raises not only questions about inequality in access to safe food but also distrust of the government, especially since the special supply chain is made up of organic produce, not GM products. Thus, some argue opposition to GMOs is not so much an issue with biosafety but rather a means for people to express their distrust of the food system as well as the government’s biotechnology policies.[v]

Opposition to GM products has also extended into local governments. For instance, Heilongjiang, the country’s biggest soybean-growing region, went against national policy to ban the planting of GMOs in 2016. It received rebukes from state media outlets in return.

Adding to this public relations battle is a struggle with social media. Concerns are consistently spread online about GM foods. While 40% of Chinese respondents have indicated their willingness to accept GM-labeled foods, the public relations battle is significantly hindering  potential.

MARA dismissed concerns about GM foods and emphasized the safety of approved GM products. The agency is also seeking to improve national food safety standards. In 2018, a nationwide survey found that 46.7% of respondents had negative views of GMOs and 14% viewed GMOs as a form of bioterrorism aimed at China. Other surveys have reinforced this perspective.[vi]

Having acknowledged the need for better public understanding of biotechnology, Beijing is using state and social media as part of its public relations drive to dispel skepticism. In addition to encouraging Chinese scientists such as Yuan Longping (袁隆平) — “the father of hybrid rice” — to endorse GMOs publicly, MARA insists “all approved GM [foods] are safe.” Chinese state media have also published articles emphasizing the benefits and safety of GM crops. Articles published in 2022 by Xinhua and China Daily, for instance, showcased the successful outcomes of a GM food environmental and food safety assessment — three GM soybean varieties received safety certificates for production and application.

More innovative solutions to broader food safety concerns have also been undertaken by the private sector, including high-tech solutions that improve supply chain visibility.[vii]

Further linking the country’s soybean import reliance to domestic food consumption is the central government’s plan to decrease soybean content in animal feed, thereby reducing demand for both food and feed grains. As outlined in MARA’s three-year plan published earlier this year, the quantity of soybean in animal feed will be reduced from 14.5% to less than 13% by 2025. Estimates suggest that by 2030, the ratio could drop to 12%, lowering China’s soybean imports to 84 million tons.

The Chinese central government is showing it is aware of China’s complex food security challenge. To achieve a higher usage of GM technology in agriculture, it has begun GM pilot programs to gradually introduce domestically produced GM soybeans and other crops into the market for human consumption.

Beijing has also sought to diversify soybean import sources to ensure a stable supply, primarily by prioritizing agricultural trade relationships with “China-friendly” countries including Brazil and others (such as Ethiopia) with significant Belt and Road Initiative (BRI) projects. Escalating global food insecurity concerns could also pave the way for greater Sino-Brazilian bilateral trade in other areas. Another downstream effect might be closer food cooperation among BRICS members.

The resulting shift in global and regional trade flows would affect Australia. A reduced dependence in China on imported non-GM soybeans could result in greater supply — lowering prices and affecting the bottom line for other exporting countries. It could also force farmers in exporting countries who rely heavily on the Chinese market, such as those in Brazil and Argentina, to decrease production to prevent a major price drop in exporting nations.

A decline in Chinese demand could also lead to increased market volatility and downward pressure on prices for staple crops. Exporting nations might face challenges in maintaining stable and profitable prices for their agricultural products, while risking the income and profitability of their agricultural sectors.

Changes in China's agricultural import patterns and overall demand could also affect the logistics and transportation industries. Countries that previously relied heavily on shipping agricultural products to China may need to adapt their transportation networks to serve alternative markets. Exporting nations and industries may also need to reassess their supply chain dependencies and resilience, considering the potential impact of reduced demand from China.

In the case of Australia, these developments are likely to have a limited impact on soybean production and exports. While it is not a major soybean exporter, Australia could be impacted by indirect changes to China’s demand for imported wheat and corn. On the one hand, a potential increase in domestically produced soybeans from GM seeds for both animal feed and products for direct-to-human consumption may make the country less willing to import wheat and corn for animal feed.

On the other hand, more wheat and corn, including imports of both, may be needed. To this end, Beijing may seek to use more of its domestically produced crops, particularly wheat to help address this concern. This was seen in 2023 following heavy rainfall and flooding in parts of the China which reduced the quality of the wheat harvest in the country’s biggest growing regions.[viii] At the time, MARA warned that the heavy rainstorms brought by Typhoon Khanun and Typhoon Doksuri were expected to cause “severe impact” on China’s agricultural production.

At the same time, the loss of high-quality wheat in China due to the heavy rainfall also raised expectations of stronger demand for wheat imports the country.

Forecasts from Shanghai JC Intelligence, a China-based commodity consultancy, last year suggested that the quantity of wheat consumed in animal feed in China was expected to rise by 10 million tons to 35 million tons in response to the heavy rainfall and resultant poor quality wheat produced domestically.

Concurrently, Beijing has sought to reduce the use of soybean meal as animal feed as part of broader food security efforts. Since early 2023, MARA has been undertaking a three-year action plan for the reduction and substitution of soybean meal in animal feed as part of broader efforts to safeguard China’s food security and ensure the stable supply of major agricultural products. According to data from MARA which was published by the Global Times, the use of soybean meal as animal feed declined by 4.4 million tons (11%) year-on-year in 2023.

At present, China is the world’s largest wheat-producing country, producing nearly 137 million tons in 2023 and accounting for more than 17% of the global total. Despite its sizeable domestic production and massive wheat stock, China is also one of the world’s leading wheat importers. China has the largest wheat reserve globally, representing more than half of the worldwide wheat stock in 2022.

In recent years, the effects of climate change, including extreme climatic events, have put China’s local production of other grain crops at risk and have caused production deficits. This is reflected in the country’s large wheat imports. In the 2022–2023 marketing year, China purchased nearly 13.3 million tons, an increase from the 9.57 million tons of wheat imported in the previous year, with the majority (7.66 million tons or 57.7%) imported from Australia. For the 2023–2024 marketing year, the USDA projects that China will import around 10 million tons of wheat.

For years, China’s wheat imports mainly came from Australia, the United States, and Canada. At present, more than 40% of the imported wheat is from Australia. Due to the trade war with Washington — along with worsening ties between China and several Western countries — Beijing has sought to diversify its wheat import sources. The government has eyed Russia, various Eastern European countries, and Central Asian countries (such as Kazakhstan) — and also sought to expand its agricultural investments and encourage agricultural technological transfer (such as its hybrid wheat technologies) in the regions.

These countries have emerged as key exporters in the global wheat market. They have enormous potential for further increases in wheat production. Notably, during Russian President Vladimir Putin’s visit to China for the opening of the Beijing Winter Olympics in February 2022, Russia and China signed an agreement for China to import wheat from across Russia, a move that could significantly improve China’s wheat supply. That accord was made against the backdrop of potentially the worst winter wheat production in history — heavy rainfall in 2021 delayed the planting of about one-third of China’s usual wheat planting area.

This holds several implications for Australia. On the one hand, the potential GM soybean commercialization in China and ongoing changes in patterns of the country’s wheat imports could reduce Beijing’s appetite for Australian wheat. Given the top party leaders’ prioritization of political and strategic concerns over economic considerations — combined with lingering tensions between Beijing and Canberra — China may seek to reduce imports from Australia.

Geopolitical concerns and historical experiences are further considerations. Amid ongoing disruptions in the Red Sea and Suez Canal — as well as drought in the Panama Canal — and alongside the trade (including food) embargo against China during the Cold War, Beijing remains distrustful of international markets. To this day, China is concerned that food supplies can be weaponized, affecting its national security. As President Xi has stated, "Historical experience has taught us that money is useless in the event of a famine. To solve the problem of feeding 1.3 billion people, we must rely on domestic food production."[ix]

Beijing’s fears of food supply weaponization and growing interest in alternative wheat suppliers, including neighbouring countries, suggest that reducing demand for wheat from U.S.-friendly countries such as Australia remains possible. For Australia, this may result in exporters and producers having to look to other leading wheat-importing countries or regions to help replace Chinese demand.

However, Beijing’s continued attempts to boost agricultural production and increase self-sufficiency in staple crops does not guarantee China will immediately halt imports from international markets. Given China’s limited natural resources and diversifying diet, due in part to the continued expansion of the middle classes and concomitant changing dietary preferences (e.g., for more grains and meat), the country is likely to remain a major food importer.

To this end, Beijing is likely to continue adopting a pragmatic approach regarding Western food imports, including from Australia, even if the future orientation of China’s agricultural and food trade policy places greater emphasis on importing from China-friendly countries.

In addition, the structural imbalance in China’s wheat supply matters. For decades, China’s local wheat production policies have focused on quantity rather than quality. However, dietary changes and growing demand for food quality have led to widening structural imbalances between domestic food production and consumer demand. This has resulted in a shortage of high-protein wheat (used to make noodles and other processed food products) in China. As Australia produces and exports this type of wheat, it could remain sought after in China due to high demand for food manufacturing.

The possibility that China will decide to plant GM corn and wheat for domestic production and commercialization should also be considered. While the GM soybeans have not (yet) been commercialized, the government’s moves to do so—combined with continued strong interest from the CPP’s top leaders in GM crops — suggest commercialization will go ahead in the coming years.

In the longer term, the likely commercialization of GM crops that extends to major Australian exports including barley and wheat casts the most uncertainty over the future of these commodities in the Chinese market. Assuming Beijing gives approval for commercialization, other staples (such as wheat and barley) might also be commercialized in the future. This could have a significant impact on Chinese imports of key agricultural products. It might even result in a decline in imports, thereby altering global trade flows. That could lead to decreased global demand for wheat, barley, and corn, affecting exporting nations that heavily rely on Chinese markets and contributing to price volatility in global grain markets.

At the same time, reduced Chinese demand for soybeans, wheat, and corn gives other countries the opportunity to import China’s surpluses, influencing global market dynamics. It could also cause a domino effect on corn and wheat prices.

Southeast Asia, a food-insecure region with a growing population and major demand for animal feed, could benefit from the prospect of millions more tons of soybeans available on the market.

Exporters may need to diversify their markets to compensate for reduced demand from China. It could also mean a hastened search for alternative markets. As the economic coercion by China on a number of Australian agricultural products (such as lobster and barley) in recent years has demonstrated, developing alternative export destinations is key to mitigating the economic impact on the agricultural sector.

Reduced demand from China could contribute to price volatility in global grain markets. Global wheat consumption is trajected to rise by 11% over the next decade; large demand increases are expected in Africa (e.g., in Nigeria and Ethiopia) and Southeast Asia, the world’s biggest wheat-importing region. Canberra may encourage exporters and farmers to increase exports to countries such as Vietnam, Indonesia, and the Philippines — countries for which Australia is already a preferred grain supplier.

The fact that China has become increasingly food secure in recent years should not go unnoticed. China’s overall food security ranking has risen in rank from 37th in 2012 to 25th in 2022, according to The Economist’s Global Food Security Index, which measures food security based on availability, affordability, quality and safety, and sustainability and adaptation.

Resilient local food supplies and reduced dependence on imports could reshape agricultural exports more generally, affecting Australia across the sector. Improved domestic food security may also further strengthen Beijing’s resilience to external shocks (e.g., trade disruptions and international market fluctuations) and climate change impacts, including increasingly erratic rainfall patterns and extreme heat events.

A well-fed China could export more of its own agricultural products, competing with Australian exports. China has constructed a “Food Silk Road” alongside the country’s BRI, which is composed of the Silk Road Economic Belt and the twenty-first-century Maritime Silk Road.

The Food Silk Road is designed to reconstruct global food supply chains through foreign agricultural investment, agricultural technology transfer, large infrastructure investments, and policy coordination. The BRI’s new food trade routes connect China to other BRI countries — as well as the BRI countries to one another.

This is notably seen in China’s relationship to Kazakhstan, one of the world’s biggest wheat and flour exporters. In 2014, a joint Chinese-Kazakh logistics terminal at the Lianyungang Port, one of China’s largest trading ports, began operation. The main aim of the logistics center is to export wheat to Southeast Asia. In early March 2017, a ship carrying 720 tons of Kazakh wheat was shipped from Lianyungang Port to Vietnam, making it the first time wheat from Kazakhstan had been sold to the Southeast Asian market.

Following the establishment of this route, Kazakhstan began to export wheat to Malaysia. This exporter remains interested in selling wheat and other agricultural products (such as meat, fruit, and vegetables) to Malaysia as part of broader efforts to boost bilateral ties.

Given growing interest in Kazakh grain in Southeast Asia and with projections estimating that Kazakhstan’s grain export volumes to China could double this year, it is not unreasonable to suggest that this grain could end up in Southeast Asian countries. 

The case is similar with Russian grain exports, including wheat. The BRI has helped Russia, the world’s largest wheat exporter with annual output estimated at 101.4 million tons, overcome its long-standing transportation obstacles. In the process, Moscow has improved its ties to China and other Asian countries. Russia’s plans to increase grain exports to China via the new Sino-Russian Overland Grain Corridor are a further indication of cooperation between China and other major wheat-importing countries. This has occurred amid the ongoing Ukraine-Russia war and other disruptions to global wheat supplies.

Other Asian countries also need wheat from non-Australian suppliers. For example, Australia remains Vietnam’s biggest wheat supplier, but Hanoi remains interested in agricultural cooperation with — and wheat imports from — other countries.

In 2023, Vietnam announced it would lift restrictions on grain imports from countries where creeping thistle (Cirsium arvense)is found, having decided to no longer regulate creeping thistle as a quarantine pest.[x]

This is expected to give Canada and Russia, previously among the top suppliers, more direct access to the market. U.S. trade has also expanded in recent years after wheat tariffs were lifted in 2021.

Vietnam remains interested in Kazakhstan’s wheat as well. In August 2023, the two countries signed 12 cooperation agreements to strengthen bilateral relations, including agriculture, to put in place between 2023 and 2025. While wheat was not explicitly mentioned, Hanoi remains interested in alternative wheat importers.

At the same time, increased competition for global and regional export markets could intensify, putting downward pressure on prices and potentially affecting the market share of traditional exporting nations such as Australia, as well as impacting local employment, rural communities, and related industries. Australian farmers could see reduced export prices and heightened competition with Chinese counterparts, as well as greater pressure to find alternative markets.

Adding to this is the potential for China to achieve significant improvements in agricultural and biotechnologies. Australia could harness China’s interest in yield-increasing technologies to export agricultural expertise and equipment. On the other hand, China may become a competitor in the global agricultural technology market with a growing number of food-insecure countries wanting to import the technology too. Exporting countries such as Australia may have to invest in technological advancements to remain competitive.

Recent movements from the Chinese central government suggest that Beijing is well aware of the complexity of the challenges it faces. Allowing greater use of GM technology in agriculture and announcing GM pilot programs to the public further suggest Beijing is slowly introducing the prospect of domestically produced GM soybeans and other crops for human consumption to its population.

Thus, China has invested in legislative efforts, capital investment, and public information campaigns to increase the country’s ability to successfully produce and commercialize GM crops. Despite recent advances in each of these areas, it could be years before China sees widespread cultivation of GM products.

As food safety scandals over the past two decades have sparked outcry and alarm over the Chinese central government’s ability to formulate and implement biotechnology policies, Chinese consumers must be won over. Beijing fears time is not necessarily on its side, given internal and external pressures on food security.

In the short term, the PRC will remain a net importer of soybeans and other such products, but it may continue efforts to diversify by importing more from BRI countries. Even without the commercialization of GM crops, Beijing has already been seeking alternative grain suppliers. In the longer term, Australian grain exports, particularly wheat and barley, may have to find alternative markets in the region.

Whatever the exact impacts of China’s GM food push, Australian policymakers should pay close attention to an increasingly food-secure China. 

[i]Yan, H., Yiyuan, C., and Bun, K. H. (2016). China’s soybean crisis: The logic of modernization and its discontents. The Journal of Peasant Studies, 43(2), pp. 373–395.

[ii] Corn and wheat are also used in animal feed.

[iii] Zhongtai Securities, https://pdf.dfcfw.com/pdf/H3_AP202106181498513163_1.pdf. Published June 17, 2021.

[iv]See also, Gale, F., Valdes, C., and Ash, M. (2019). Interdependence of China, United States, and Brazil in soybean trade. US Department of Agriculture’s Economic Research Service (ERS) Report, pp. 1–48.

[v] Xiao, Z., and Kerr, W. A. (2022). The political economy of China’s GMO commercialization dilemma. Food and Energy Security, 11(3), p. e409.

[vi] Cui, K., and  Shoemaker, S. P. (2018). Public perception of genetically-modified (GM) food: A Nationwide Chinese Consumer Study. npj Science of Food, 2(10), https://doi.org/10.1038/s41538-018-0018-4; see also Deng, H., and Ruifa Hu. (2019). A crisis of consumers’ trust in scientists and its influence on consumer attitude toward genetically modified foods. British Food Journal. 121(10), pp. 2454–2476. Other studies suggest that perceptions might be changing, however. One finds that 40% of Chinese respondents accept GM-labeled foods: Zhao, Y. et al. (2019). The Chinese public’s awareness and attitudes toward genetically modified foods with different labeling. npj Science of Food, 3(1), p. 17.

[vii]  At the extremes, these include “blockchain chicken farms,” “Gogochicken,” and animal facial recognition, which allow consumers to monitor the age, location, and even the distance walked each day of the poultry they are buying, as well as for better health monitoring.

[viii] China’s three northeasternmost provinces – Heilongjiang, Jilin, and Liaoning – also referred to as “China’s granary” or “China’s breadbasket” were affected by heavy rainfall and flooding. Together, these provinces account for more than 20% of China’s grain output.

About a month earlier in late May last year, Henan province, another major grain-growing region in China, and which produces around one-third of the country’s wheat along with 10% of its pork and 10% of its corn, also received heavy rainfall. The Henan authorities said the flooding in late May was the most devastating rain event for wheat production in the past decade, according to state media.

[ix] President Xi Jinping. “We must hold our rice bowl in our own hands”. Xinhua, August 25, 2015. http://www.xinhuanet.com/politics/2015-08/25/c_128164006.htm

[x] According to the U.S. Department of Agriculture’s Animal and Plant Health Inspection Service, this means that wheat or soybeans exported to Vietnam no longer need to be certified as free of creeping thistle.