China and the United States were negotiating some recent economic policies this week, but those talks mostly appeared to have fallen through without much progress in Sino-American relations.
However, a new announcement indicated that the rice market in China is being opened up to American companies for the first time. China first opened up twenty years ago, namely for Asian suppliers. China is the largest consumer of rice in the world and opening up these markets to American producers should allow them to increase revenues.
China imports about five million tons of rice per year, spending up to $1 billion when doing so. This is more than the United States exports which is approximately three to four million tons per year. Still, the deal with the United States will allow the country to diversify away from Asian producers and have several options for importing the stable food in China.
China was previously able to feed itself with rice, but has experienced challenges in doing so, namely in relation to their rapidly aging population which is not able to produce the rice needed by the population. Further, the quality of the soil is depleted and pollution problems contribute to the inability to feed the population with internally produced rice.
The U.S. President, Donald Trump, and his administration, has made a point of attempting to reduce the trade deficit that exists with China by opening up several different industries that China restricts foreign investment with, as well as manipulating their currency. China’s economy is rapidly expanding and growing and is the second largest economy in the world and is poised to become the largest in the next century, namely as a result to their large population.
Chinese officials will inspect U.S. rice supplies before allowing U.S. exporters to import to their country. This may be the first step to opening up a potentially large market.