Soybean Shipments to China Surging, Good for Biden Administration
By Li Chunding
Illustration: Tang Tengfei/GT
China, the world's top soybean importer, has seen sharp surge in soybean imports this year, with total imports approaching 100 million tons over the first 11 months. The whole year soybean imports will likely to hit a record high, according to industry insiders.
According to data from General Administration of Customs, China has bought 92.8 million tons of soybeans from January to November, up 17.5 percent year-on-year. The monthly soybean imports have reached historical high level for six consecutive months this year.
Due to the impact of COVID-19 on domestic soybean production, China's domestic supply has edged down in 2020, but imports from major soybean producers like the US and Brazil has met a rising demand -- driven by China's hog-raising fever.
As the second largest economy in the world takes lead in economic recovery after successfully containing the coronavirus outbreak, domestic demands for soybean has shot up due to skyrocketing market demand.
Meanwhile, China has continued opening its markets and taking measures to expand imports. The imports of soybeans and other agricultural products have been benefiting from the implementation of the measures.
After the epidemic is largely curbed, China initiated a series of proactive fiscal and monetary policies to promote a rapid economic recovery, which also played an important role in rising demand for soybean imports.
Also, China has abided by the phase-one trade deal signed earlier in 2020 with the US. As a result, the country has largely increased agricultural products imports from across the Pacific. Chinese imports of US soybeans surged almost three-fold in October on a year-on-year basis.
Given China's economy's strong recovery and rising demand, soybean imports are expected to remain at an elevated level in 2021. Major soybean producers in the world are expected to further enjoy the dividends of China's "dual circulation" new economic development strategy and China's firm support of free trade. However, as the domestic demand approaches saturation, it's unlikely to increase by a wide margin on the basis of current 100-million-ton level.
The surge in China's soybeans imports has underlying economic reasons, and should not be overly interpreted, politically. China's expansion of agricultural imports is of great significance to the post pandemic recovery of the US economy and the world's other economies.
With the Trump administration's tough foreign strategy against China likely to be revised following Joe Biden's impending inauguration on January 20, Washington is more likely to enter into dialogue mode on the implementation of the phase one trade deal.
It now appears that the US, which is experiencing severe difficulties due to Trump government's failure in handling the coronavirus crisis, still has high hopes for next year's agricultural exports to China. Thanks to Chinese demand, the US Department of Agriculture's November agricultural exports forecast for fiscal year 2021 increased by $11.5 billion from August to $152 billion.
China-US bilateral trade totaled 3.65 trillion yuan ($558.4 billion) in the first 11 months this year, which is expected to reach 3.95 trillion yuan level in 2017 before the trade war.
It's hoped that the coming Biden administration can act in favor of upholding free trade and seek to bridge differences with China through good-willed negotiations, and the two economic powers could together help boost a struggling global economy.
The author is a professor and head of the Economics and Trade Department with the College of Economics and Management at China Agricultural University. email@example.com