Foreign food exporters have long benefitted from a perception among Chinese consumers that some domestic foodstuffs do not meet sufficient safety and quality standards. But in the wake of COVID-19, better securing the domestic supply chains of China’s critical resources – including food – has now become a top priority for Beijing. One region in China, not known for its agricultural output, has already begun a transformation into becoming the new ‘breadbasket of Asia’: the northeast. Success in this region could present a serious challenge to exporter countries like Australia if China is able to replace its food exports with increased local production.
From ‘revitalisation’ to ‘rejuvenation’
China’s northeast, formerly known as ‘Manchuria’, has always been synonymous with heavy industry and resource extraction. Comprising Heilongjiang, Jilin and Liaoning provinces, it is a region rich in strategic resources like iron ore, coal, oil, and surrounded by China’s northern neighbours: Russia, Japan, and North Korea. Since the 2000s, it has fallen behind other parts of the country perceived to be more embracing of Deng Xiaoping’s market reforms.
‘Making Northeast China Great Again’ has been a major policy priority of China’s political leaders since a strategy to revitalise the region was introduced by then President Hu Jintao in 2003.
In its early years, the model for revitalisation of China’s ‘rust belt’ centred around encouraging industrial restructuring of the powerful state-owned enterprises and returning the region to its position as a manufacturing and industrial heartland of the Chinese economy.
In the wake of the escalating trade war with the United States, Xi Jinping made headlines following his inspection tour of the northeast in 2018, by giving his support for efforts to improve China’s food security through creating greater “self-reliance” in Chinese agriculture. Before Japanese annexation in 1931, Manchuria had been known for its soybean exports and massive cattle ranches as the region’s rich black soil and sheer geographic size had been underutilised compared to other regions of China over centuries.
Xi has incorporated revitalisation of the northeast into his wider ‘dream’ to rejuvenate the Chinese nation. It is no longer enough to restore the economy of the northeast to former Maoist glories – the northeast has always been a strategic asset, and as such it has always attracted the interest of rising powers. Xi Jinping is signalling a much wider transformation of the region, to help in “maintaining the strategic position of national defence security, food security, ecological security, energy security, and industrial security” of the Chinese nation.
‘Self-reliance’ is back in fashion for China’s rust belt, when previously it had been specifically identified as one of the underlying problems with the insulated business culture of northeasterners. Xi, unlike his predecessors, has sided with powerful local economic interests who have always been much more sceptical about the benefits of greater marketisation and exposure of the northeast to the global economy. A part of China that had for decades felt forgotten is now taking centre stage.
The new ‘breadbasket of Asia’?
Development of the region’s agricultural capacities for the domestic market is likely to increase, as secure supply chains for food are affected by the trade war with the United States and the reshaping of the global economy post-COVID-19.
As one example, the block on soybean imports from the United States in 2019 created an opportunity for soybean growers in the northeast to increase their market share. The Heilongjiang provincial department of agriculture and rural affairs has estimated that the soybean planting area in the province would increase by over 10 per cent in 2019.
For Australia, China has been the number one agricultural export market since 2010-11. In 2017-18, around 25 per cent, or $11.8 billion, of Australian total agricultural exports went to China, with wool, barley, and beef being the top three commodities worth a total of $5.7 billion. The northeast’s attempt to build a productive agricultural sector could be a serious challenge to Australia’s export position in that market, if successful.
Putting aside implicit or explicit threats by Chinese ambassadors on trade bans and consumer boycotts, transforming northeast agriculture has been in the works for many years. Indeed, the will of China’s political leadership to make the supply chain of food more secure and solve the problems of the northeast regional economy has grown only stronger in recent years.
China’s issues with food security remain largely the same as they did before Xi’s 2018 inspection tour. Arable land is scarce, the regulatory regime for food safety is still not trusted by Chinese consumers, and the Australia ‘brand’ is still strong. However, the sheer size of the Chinese economy means even regional changes, like those in the northeast, could have significant global consequences. And with Xi Jinping’s maxim of: “the Chinese people’s rice bowls must be firmly in their hands at all times”, China may be more determined than ever to rely on itself for its own food security.
