Thursday, March 18, 2004


Globalization: Effect of China's Growth on Everything Else

The sudden economic awakening of China threatens to put maybe 50 million new cars on the road in the next few years, but China's prosperity pop will have consequences for global food supply and climate change too. REMcConnel sent this scary little speculation:
. . . After a remarkable expansion of grain output from 90 million tons in 1950 to 392 million tons in 1998, China's grain harvest has fallen in four of the last five years — dropping to 322 million tons in 2003. For perspective, this drop of 70 million tons exceeds the entire grain harvest of Canada.
As people in China earn more, they are moving up the food chain, eating more grain-fed livestock products such as pork, poultry, eggs and — to a lesser degree — beef and milk . . . The fall in China's grain harvest is due largely to shrinkage of the grain-harvested area from 90 million hectares in 1998 to 76 million hectares in 2003.
China soon will be forced to turn to the world market for massive imports of 30, 40 or 50 million tons per year. This comes at a time when world grain stocks are at their lowest level in 30 years.
This presents an unprecedented geopolitical situation: 1.3 billion Chinese consumers who have a $120 billion trade surplus with the United States — enough to buy the entire U.S. grain harvest twice over — will compete with Americans for U.S. food . . . managing the flow of grain to optimize the benefits for people in both countries . . . could become one of the major U.S. foreign policy challenges of this new century.
Human ingenuity cound rescue us from this Malthusian outcome, but default, dear Brutus, is not in the stars.

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