How subsidized US soybeans hurt Chinese farmers

The Trump administration has repeatedly accused China of violating international trade rules and threatened to impose higher tariffs on Chinese products. But the US is actually the breaker of WTO rules, which can be seen clearly by how subsidized US soybeans are dumped on China.



With a long history of soybean planting, China used to be the largest soybean producer and exporter in the world but was surpassed by other countries. As late as 1995, China was still a net soybean exporter, but in a few years it turned into the largest importer. According to data released by China's National Statistics Bureau, from 2010 to 2017, China's soybean imports increased 40.73 million tons, up 74.3 percent. As soybean imports surged, China's soybean output suffered decline year after year, with only 12.94 million tons in 2016, less than one-seventh its import volume.



The imported soybeans have taken over the domestic market. An important reason is that imported soybeans, especially from the US, received huge subsidies. Although the US repeatedly claimed the subsidies accounted for a small proportion of the output value and conformed to WTO rules, its huge subsidies for soybean farmers have garnered an unfair competitive advantage that enables them to dump them on the Chinese market, with global impact.



As the price of Chinese soybeans is constantly hit by cheap imported soybeans, the production efficiency of Chinese farmers keeps declining. The difficulty of selling Chinese soybeans has already become an old story.



But the US has become the world's main soybean producer and exporter with its sowing area and yield increasing since 2010, in stark contrast to China. During the 2016 and 2017 planting seasons, increasing US soybean stocks and production were vital to rising global soybean stocks and production. The increased US soybean production accounted for about 30 percent of the rise in global soybean output. Half of US soybeans are exported, an important reason for the world's soybean oversupply.



China is the biggest importer of American soybeans. The US soybean industry is boosted by China's demand, which however results in the decline of China's soybean sector.



The 19th CPC National Congress has set the goal of deepening supply-side structural reform and rural revitalization. The first policy document of 2018 issued by Chinese authorities has urged that efforts must be made to nurture large grain dealers and agricultural companies that are competitive internationally and participate in global food security governance and agricultural trade rule-making to help form a fairer and more reasonable international trade order for agricultural goods.



It's pleasing to see that there is a consensus in the country. Strong restrictive measures need to be taken against the massive subsidies and dumping of soybeans by some countries on China. This can reduce the adverse effects of imported soybeans on the Chinese market and provide a fair and sound environment for the sustainable development of the Chinese soybean industry.

