SINOWEEKLYPLUS

US affirms existential nature of the CCP threat; China’s financial, grain shortages could trigger social instability

SinoInsight 1
On Aug. 31, China’s National Grain Trade Center released data for the acquisition of grain from main grain producing areas in the summer and indica rice in 2018. According to the data, a total of 42.959 million tons of wheat were acquired as of Aug. 25, a decrease of 21.514 million tons (33.37 percent) from a year earlier.

OUR TAKE

Due to the Sino-U.S. trade war and the central government stepping up grain inspections, we believe that Chinese officials are not inclined to falsify (at least not greatly) grain figures. (See our article on China’s burning grain reserves.)

Going by the above-mentioned wheat data, earlier official grain numbers could be inflated by at least 30 percent. This means that the total national grain output in 2017 may only be about 430 million tons instead of the reported 620 million tons.

China legally imported 130 million tons of grain in 2017. Presuming 30 percent data inflation (1.9 million tons), half of which is due to record falsifying and the other half made up by smuggled grains, then China could have imported up to 225 million tons of grain in 2017. Given that the numbers mean that China only has a food self-sufficiency rate of 66 percent, the country is in a food crisis per the Chinese regime’s own standards (95 percent and above is safe).

This year, wheat producing countries worldwide (except the U.S.) are seeing reduced harvests. Key corn-growing countries are also seeing production declines. On the flipside, a U.S. Department of Agriculture weekly report projects record-level corn and soybean production in 2018.

What this means is that China would likely end up importing grain and food from America regardless of tariffs. Food prices in China will rise, affecting the people and industries. Rising food prices in turn will lead to increased social instability.

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