US farmers need competitiveness to win back China market

By Hu Weijia Source:Global Times Published: 2019/12/26 20:53:40

Illustration: Xia Qing/GT

US farmers may return to or even exceed pre-trade war levels of sales to China if the phase one trade deal can be signed by the two countries. However, fierce competition is forcing them to improve competitiveness.

When the US launched the trade war against China last year, Chinese importers reduced their purchases of some US agricultural products and turned largely to South American countries such as Brazil and Argentina. Exporters in those countries have taken advantage of the trade war to gain market shares in China. As a result, US farmers are likely to face fiercer competition than before the trade war after they come back to the Chinese markets.

US farmers should be prepared for intense competition and improve the competitiveness of US agricultural goods. Agricultural purchases by China have always followed market-oriented principles. US farmers cannot simply rely on bilateral trade deals to win the Chinese market.

With a population of about 1.4 billion, China is one of the world's largest consumers and importers of farm products. The country's agricultural purchases are very likely to post substantial growth in 2020. If US farm products enjoy high competitiveness, China's imports of these products from the US are very likely to exceed the pre-trade war levels.

Hopefully, the phase one trade deal can be signed as soon as possible before next planting season comes, as that will give US farmers some time to adjust their planting plans and prepare for fiercer competition in the Chinese market.

Agricultural purchases by China from the US fell to $16.2 billion in 2018 from an average of $24.2 billion each year from 2015 to 2017. The decline was mainly attributed to Washington's fault in starting the trade war. US farmers should urge their government to sign the phase one trade deal as soon as possible, and make sure the next trade talks continue to make progress. 

Even though the phase one trade deal is in the pipeline, US farmers need an early signing, which will buy time for them to win back the Chinese market.

The author is a reporter with the Global Times. bizopinion@globaltimes.com.cn



Posted in: COLUMNISTS

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