Food in China, Corporate Transparency and Fixing Flawed Chinese Garments
November 14th, 2006
China has roughly 20 percent of the world’s population but only roughly 6 percent of its arable land. Further, as China develops that 6 percent of arable land is likely to decrease. This poses huge issues re: feeding its population in the future. Read the following front page Wall Street Journal article, “Giant Neighbors Russia, China See Fault Lines Start to Appear” (see also related article) [subscription may be required]. What do these article suggest is one way China can help ease its food problem? What present and future geopolitical issues does this pose for Russia and China? What about the US? Is this development good or bad for the US?
Read the following Wall Street Journal article, “What’s Going on in China?” re: corporate transparency. What are the pros and cons of this disclosure system? How does this differ from the US? In your view is this a baby step or a major step for China in combatting the argument by the West that “everything done in China is corrupt, done in the shadows, corporate transparency is a joke, etc.?”
I hope to set up a visit for us to a textile factory in China. Chinese factories as a whole are often criticized for being inefficient, making shoddy products, etc. That may or may not be true, depending on the item, factory and industry. But in the case of textiles, if we assume that is true, what business opportunities does this front page Wall Steet Journal article, “Clothes Made Abroad Create Factory Jobs in LA for Mr. Fix-It“, indicate are presented to, at least, entrepreneurs in the Los Angeles fashion district? What other business opportunities do you see coming out of such defect work? Does this article take the wind out of the argument by many trade protectionists in the US that once a job leaves the US (e.g., textile manufacturing) that no comparable jobs come back our way? Discuss.
Entry Filed under: Pre-Departure, China, Misc.
3 Comments Add your own
1. Mike Johannsen | November 14th, 2006 at 5:25 pm
The article “Giant Neighbors Russia, China See Fault Lines Start to Appear” suggests that China can begin to ease its food issues by beginning to farm idle Russian farmland. For obvious reasons this is easier said than done, but China and their abundant labor supply could capitalize on the abundant idle farmland. If Russia were to play its cards right they could use China’s need for arable land and food to leverage economic gain. Entrepreneurs like Vladimir Shiraev have a potential to take advantage of the situation by reinvesting in more idle land and then leasing it to migrant Chinese farmers.
The political outfall of the situation has potential to be a hot issue, as more and more of Chinese agricultural lands are lost to urban development, farmers may look north to see a viable future in farming. If a great influx of Chinese immigrants moves north the Russian government will have to deal with a large area of land that has a higher density of Chinese immigrants than native Russians. Tension in Russia is already growing as a result of the estimated 250,000 Chinese in the area. The issue was even raised back in 2000 by President Putin that if the lands are not developed the region may be speaking Japanese, Korean, or more likely Chinese in a few decades.
Potentially for the US this is bad news for the farming industry; Chinese imports of US grown soybeans, cotton, and wheat have doubled in the last few years according to a USDA report (http://www.ers.usda.gov/publications/WRS0504/). If Russia is able to supply China with cheaper food it could mean a decline for US grown goods and fewer exports to China.
2. Lee Smith | November 20th, 2006 at 2:30 pm
From the article entitled “Giant Neighbors Russia, China See Fault Lines Start to Appear”, Mr. Chemezov, the regional agriculture minister, plans to ”grant millions of acres of land on 49-year leases to any Chinese workers willing to farm it”. Though this plan could prove very useful to the Chinese in terms of feeding its overwhelming population, the handwriting for disaster is clearly there. While China is rapidly building over large sections of its arable farm land it is in turn forcing itself to look beyond it borders for food to feed its growing population. Much like its neighbor Japan, if some sort large disruption in the transportation chain occurred, food supplies would be greatly reduced.
Mike raises a good point in the above comment in that the ambitions of the Chinese work force to essentially farm Russia could potentially take away from US exports of certain agriculture commodities. However, this opening in Russian territory could potentially be an opportunity for the larger US Agribusiness firms.
US Agribusiness companies currently operate in numerous South American and Mexican regions with operating conditions comparable to both Russia and China. These businesses utilize cheaper labor rates and plentiful natural resources to create profits for American owned companies. In addition to the benefits these companies enjoy, US consumers get year round supplies of seasonal fruits and vegetables. Though this type of business places dependence upon foreign countries for domestic food supplies, most products are not staples in the American consumer’s diet and would not create any shortages in America that would be critical.
3. Andrew Gardner | December 15th, 2006 at 3:36 pm
When reading this article, I immediately thought of the current immigration concerns here in California. While both Russia and California are able to secure the labor needed to farm their land from other countries, it appears that there is a great deal opposition to importing this source of labor.
If California farms were prevented from using migrant workers as a cheap source of labor, I do believe that a lot of good farm land would go unfarmed, very similar to the situation in Russia. It is simply too expensive to pay labor rates Americans are willing to work for and still make any sort of profit.
Since China is quickly running out of land to grow enough food to feed the entire country, it needs to secure an external source of affordable agricultural goods. Perhaps the increased production in Russia, from Chinese workers, will be able to provide another source of food.
Leave a Comment
Some HTML allowed:
<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>
Subscribe to the comments via RSS Feed