Emergence and integration of regional grain markets in China

• Department of Policy, Reform and Law, China
• Department of Policy, Reform and Law, China

China is the world's largest grain producer and consumer with total output in the region of 440 million tonnes in recent years. Although this represents only a relatively small proportion of domestic trade (3.15% imports and 1.74% exports, respectively), it forms approximately 13-15% of world trade. Changes related to China's current move from a system of planned production and supply of grains to market reform therefore have important implications for the world grain market.

This project aims to analyse the origins and impacts of the development of an integrated national market for grain in China. The project will evaluate: (1) the impact of regional comparative advantage on the emerging grain market; (2) the patterns of growth in grain demand in urban China; (3) regional demand, supply and trading relationships by grain types; (4) the marketing institutions needed to integrate grain markets; and (5) government participation in regulating regional and national markets.

These five factors plus the development of a database will be divided into six subprojects creating a more comprehensive and reliable picture.

The project involves collaboration with a major research team within China organised by the Ministry of Agriculture (MA) and including researchers from other ministries in Beijing (e.g. Ministry of Commerce). This Chinese team will investigate the process of price and marketing reform and the evaluate policy options, as well as collecting data and analysing aspects of consumption patterns, demand and regional variation. The Australian researchers are from the University of Adelaide and the Australian National University (ANU).

The ANU team will focus on the modelling aspects of the project and the Adelaide team will be responsible for economic analysis of regional price and marketing arrangements in China and the implications of reform of the institutional system.

The Chinese team will work with the Australian participants to conduct household surveys to determine urban and rural demand for grain. A peasant household survey is also vital to the research program and will be administered by the MA's Rural Administration Department.

Researchers will establish a database, drawing on existing grain sector databases which they will check against Chinese sources. These sources include provincial and county yearbooks and the data series available to the Chinese collaborators in the MA.