China’s Choice and its implication: Import meat or soybean

In recent years, along with population growth and improved living standards, the consumption of beef continues to grow and there is a growing shortage of domestic cattle beef supply in China. Importing volume reached 290,000 tons in 2013, which is 3.79 times of 2012. In the meantime, the market price of beef continues to rise very quickly, from 27RMB/kg in 2007 to about 50RMB/kg in 2015. However with urban expansion, agriculture will faces ever more scarce land, labor and water resources and China’s domestic beef production may increase not fast enough to catch up with the accelerating demand, especially in some region. Therefore, China’s government has two choice: one is to increase the import of meat directly, which will decrease self-sufficiency in meat production; the other is to increase the import of feed/soybean and incent domestic meat production, which will decrease self-sufficiency in soy production and bring about emission of animal husbandry. In one words, there is a practical question to the Chinese government of whether to import more meat or soybean in the future, which has significant impact on China’s production of meat and soy. In addition, China has become main importer of soybean in the world. Soy consumption in China doubled in the last decade, from 26.7 million tonnes (MT) in 2000 to 55 MT in 2009. China’s import of soybean increase from 10MT in 2000 to 63MT in 2013. Consequently China’s choice will also has significant impact on meat/soy exporters in the international market. The paper will use GTAP model to assess the impact of China’s meat product imports vs. domestic meat production.