Write-up taken from the IRRI's Rice Almanac (2013):
The People’s Republic of China is the second-largest country in the world by land area and is either the third- or fourth-largest by total area after Russia, Canada, and the United States. It has the longest land borders in the world, measuring 22,117 km from the mouth of the Yalu River to the Gulf of Tonkin. Marked by topographical variety and complexity, China’s landmass is made up of mountains (33%), plateaus (26%), basins (19%), plains (12%), and hills (10%).
China’s climatic features include a pronounced monsoon climate with a hot summer and a cool winter, marked seasonal variations in precipitation, and a distinctive continental climate with large annual temperature fluctuations. The climate types are so varied and complex that high rainfall, cold waves, and typhoons are all important climatic phenomena. China can be divided from the coastal areas to the northwest interior into four regions according to moisture regime: (1) the humid region south of the Qinling Mountains and Huaihe River, comprising 32% of total land area; (2) the subhumid region including most of northeastern and central China, 15%; (3) the semiarid region, 22%; and (4) the arid region, 31%.
China is the most populous country in the world. The 2010 population on the mainland was nearly 1.4 billion, with about 53% living in rural areas. Three-fourths of the nation’s population is concentrated in the northern, northeastern, eastern, and south-central areas, which make up only 44% of the nation’s land area. The remaining one-fourth of the population is dispersed in the southwestern and northwestern parts. Because of an active family planning program, including some restrictions on family size, annual population growth slowed from 2.6% per annum in the late 1960s to just 0.5% per annum in 2005-10.
China is one of the fastest growing economies in the world; it has sustained a healthy average growth rate of about 10% per annum for the past several years. Since 2010, it ranks as the world’s second-largest economy after the United States. The three most important sectors of the economy are industry, services, and agriculture. China also emerged as the largest exporter of goods in the world. The country’s per capita GDP (PPP) rose to US7,568 in 2010 from a mere US1,504 (PPP) in 1995.
China is not only the world’s largest producer of rice but is also the principal source of other crops such as wheat, maize, soybeans, groundnuts, cotton, and tobacco. It is currently emerging as the largest producer of a number of industrial and mineral products such as cotton yarn, coal, crude oil, and countless other consumer products such as footwear, toys, electronics, and clothing.
Recent developments in the rice sector
China is the world’s largest producer and consumer of rice in the global economy. It accounts for 30% of total world production and consumption. Except for Japan and the Republic of Korea, rice yields in China are the highest in Asia (about 6.5 t/ha in the last 3–4 years), due in part to favorable growing conditions and the widespread adoption of hybrids. China is second to India in total rice area. Rice area harvested has continued to decline from its peak of 37 million ha in the mid-1970s to just over 31 million ha in 1995 to about 30 million ha in 2010. The decline in area has been due to both economic reforms that reduced government requirements to grow rice and economic development that increased the opportunity cost of land. In recent years, much of the decrease in rice area has occurred in coastal provinces such as Guangdong and Zhejiang. Hunan is the largest rice-producing province, and most rice production is in the Yangtze River Valley (or farther south) where ample supplies of water are available. However, rice production in northern China has increased substantially in recent years, with its share of national production doubling from 7.5% in 1995 to 15% in 2009. Much of this increase has come from Heilongjiang and the other two northeastern provinces of Jilin and Liaoning, but production has also expanded noticeably in Henan and Shandong.
Rice is the staple food of two-thirds of China’s population. However, wheat is more important in some areas, especially in the north. Although rice is still a large part of people’s diets, its importance has declined considerably in the past 15 years. The latest data available showed that rice consumption per capita declined from 78 kg per year in 1995 to 76.3 in 2009. Since 1995, the share of total calories obtained from rice fell from 29.2% (809 grams per capita) to 26.2% (794 grams per capita) in 2009. In terms of protein, rice accounted for 19.1% of total protein intake in the late 1995s, but during 2009 this share further declined to 15.7% at 14.7 grams per capita.
China regularly imports and exports rice each year. Imports exceeded exports in 1995 and 1996 but China has been a net exporter since then. In 1998 and 1999, it was the world’s fourth-largest rice exporter, and its exports helped to stabilize world market rice prices in the face of a strong El Niño that severely disrupted production in Indonesia and the Philippines. However, exports became erratic but declining starting in 2000 until 2004 and 2005 when exports and imports were almost equal. China became a net exporter again in 2006 but, in 2010, at a much smaller amount at 615,900 t. Rice importing is through the state-owned enterprise China National Cereals, Oils and Foodstuffs Corporation (COFCO). China usually exports rice of medium to low quality. COFCO manages the country’s rice exports and has a monopoly on rice imports as well. The trading companies are granted 50% of the rice permits. The in-quota tariff is 1% and the out-quota tariff is 65%. For rice imports, a majority are Thai fragrant rice varieties consumed in high-end hotels or restaurants located in well-off coastal cities.
China has implemented a series of programs to promote rice productivity and it imposes trade restrictions and policies aimed at raising farmers’ income while managing the food demand of its growing population. Since 2004, China has begun to subsidize and remove taxes on agriculture.
To encourage production, the Chinese government introduced a machinery subsidy, which is monetary assistance granted by the government to a farmer for buying agricultural machinery. Farmers are offered a 30% discount on agricultural machinery purchased, with a maximum subsidy ranging from $7,720 to $30,879 per item (50,000 to 200,000 yuan). These subsidies target grain producers.
Presently, farmers growing superior rice varieties receive subsidies from $22 to $33 per hectare. The Agriculture and Cooperatives Ministry has been assigned to set a suitable paddy price based on capital cost and a suitable return for farmers and to quickly complete the registration of farmers joining the rice price guarantee program. The rice price guarantee scheme is as good as a typical insurance wherein an insurance buyer will be compensated if problems arise. If no problems are encountered during the harvest period, the price guarantee can be considered as a hedging cost.
The government floor price for rice (2011) for early indica and japonica varieties was set at $319.67 per ton (2,040 yuan per ton) and $401.57 per ton (2,560 yuan per ton). However, this price support program applies to only the 13 major grain-producing provinces in China: Heilongjiang, Jilin, Liaoning, Inner Mongolia, Shandong, Hubei, Henan, Anhui, Jiangsu, Shanxi, Hunan, Hubei, and Jiangxi. The guaranteed price of 50-kg bags for early indica is $15.50 (102 yuan), for middle-late indica $16.26 (107 yuan), and for japonica $19.45 (128 yuan).
When China joined the World Trade Organization (WTO) in 2001, part of its commitment was to lower the tariff rate to 65% for rice imports. However, to ensure the protection of domestically produced rice in the country, the Chinese government implemented the grain tariff rate quota (TRQ) for rice in 1996, which set a 5.3 million t quota for both private traders and state enterprises, each having a 50% allocation.
Rice-growing conditions in China vary because of topography and weather, but the crop is basically irrigated. In southeastern China, high temperature and adequate rainfall make an ideal environment for rice during a long growth period, and many areas grow two crops of rice per year. In the Yangtze River Valley, much of the land is planted to a rice-wheat rotation. In northeastern China, low temperature, a short growth period, little rainfall, and a lack of water limit the rice area. The varieties grown in this area are typically japonica and are considered to be of higher quality than the rice grown in other areas. Some scattered rice areas are found in arid and semiarid regions of northwestern China.
Area harvested to rice has declined during the past 25 years because of crop diversification. Rice accounted for 26% of all crop area harvested in the mid-1970s, but more recently the share is just 20%. At the same time, population continues to grow by about 13 million people per year. Until per capita rice consumption declines because of rising wealth accompanied by dietary diversification (as has happened in Japan, the Republic of Korea, Malaysia, and Thailand), rice yields will need to increase to meet consumption demand without resorting to imports.
Rice production in China has more than tripled in the past five decades mainly because of increased grain yield rather than increased planting area. The increase has come from the development of high-yielding varieties (including hybrid varieties) and improved crop management practices such as nitrogen fertilization and irrigation. The average yield is about 6.5 t/ha compared with the world average of only 4.3 t/ha.
As its population rises, China will need to produce about 20% more rice by 2030 to meet domestic needs if rice consumption per capita stays at the current level. This is not easy—several trends and problems in the Chinese rice production system constrain a sustainable increase in total rice production. These include a decline in arable land, increasing water scarcity, climate change, labor shortages, and increasing consumer demand for high-quality rice (often from low-yielding varieties). The major problems confronting rice production in China are as follows.
Narrow genetic background. The low genetic diversity in commercially grown rice cultivars has led to vulnerability to biotic stresses (pests and diseases) and abiotic stresses (such as drought and salinity). The situation is particularly troublesome in China because 50% of the rice-planting area is occupied by hybrid rice, which is developed using only a few varieties as the female parent.
Overfertilization. In 2002, the average rate of nitrogen (N) fertilizer application for rice production in China was 180 kg/ha, about 75% higher than the world average. Only 20–30% of this N is taken up by the rice plant, with a large proportion lost to the environment. In some cases, overapplication of N fertilizer may actually decrease grain yield by increasing the plant’s susceptibility to lodging (falling over) and damage from pests and diseases.
Overuse of pesticides. On average, Chinese rice farmers—who tend to grossly overestimate crop losses caused by pests—are overusing pesticides by more than 40%. In many cases, overuse of pesticides actually contributes to pest outbreaks because it reduces the biodiversity of rice ecosystems, killing natural predators of pests as well as the pests themselves.
Breakdown of irrigation infrastructure. China’s irrigation infrastructure was established mainly in the 1970s. Since then, maintenance of existing irrigation systems and building of new facilities have been very limited. Coupled with declining freshwater resources, this problem may greatly reduce the area planted to flood-irrigated rice in China.
Oversimplified crop management. Because of labor migration and increases in labor wages, decreased labor input for rice production has resulted in compromised crop management that may contribute to lower yields.
Weak extension system. Because of insufficient financial support, many extension workers earn part of their salary by selling agrochemicals to farmers, which may promote the overuse of fertilizers and pesticides. Furthermore, the weakness of the system means that improved technologies may not reach farmers.
Water shortages in the north are another important production constraint. Although northern China has only 24% of the nation’s water resources, it contains more than 65% of China’s cultivated land. Although water shortages constrain production in some areas, flooding is a problem. Land salinization and soil erosion also pose challenges for continued development.
The population is still growing, but increased labor demand in urban areas is drawing many people out of agricultural production and hurting yields. As a result, labor-saving technologies such as direct seeding (or seedling throwing) are becoming more common. Future trade liberalization under the WTO may also affect grain production, especially for wheat and maize, because domestic prices for these grains are substantially above world prices. For rice, however, domestic prices are approximately equal to world prices, and no large influx of imports is anticipated.
Chinese scientists recently became the first in the world to prepare a draft sequence of the genome for the indica race of rice. Indica rice is by far the most widely planted in Asia, and this achievement has the potential to create many benefits for Asian producers and consumers of rice.
In seeking to alleviate the main constraints of land and water, Chinese scientists have also made substantial progress in improving yields and water productivity. China has developed the most successful varieties of hybrid rice in the world, and more than one-third of the total rice area is planted to hybrids. More recently, scientists have developed irrigation techniques for rice that reduce water consumption by allowing intermittent drying of the paddy field, without sacrificing grain yields. The successful adaptation of aerobic rice (rice that is grown as an upland crop but still exhibits a substantial response to nitrogen fertilizer) to new areas would also allow rice to be grown in water-short environments. In the future, the construction of canals from southern to northern China may also help to alleviate water shortages in the Yellow River Basin.
In other fields, there is also potential for improved fertilization strategies that increase nitrogen-use efficiency by improving the splitting of nitrogen and reducing the amounts of nitrogen application. Opportunities also exist for reducing pesticide applications to improve farmer health and the quality of drinking-water supplies.
Since 1980, China and IRRI have cooperated on several research projects of mutual concern such as the exchange of rice germplasm to strengthen breeding programs; hybrid rice research to exploit heterosis in rice; shuttle breeding to speed the development of rice varieties with high yield potential, good quality, multiple resistance to insects and diseases, and wide adaptability; and natural resource management studies to improve fertilizer- and water-use efficiencies.
Despite the challenges, good research strategies can drive increased rice production in China. These include the following.
Increasing yield potential. China has been at the forefront in attempting to develop high-yielding semidwarf, hybrid, and new plant type varieties. Further progress in increasing rice yield potential is possible when new breeding techniques such as marker-aided selection and genetic engineering are combined with conventional breeding.
Drought and heat tolerance. Drought and heat stress are increasingly important constraints to rice production in China, mostly due to variation in rainfall patterns from year to year, uneven distribution of rainfall in the rice-growing season, and higher temperatures resulting from climate change. Chinese scientists have identified and mapped genes for drought and heat tolerance, and are developing new varieties.
Disease and insect resistance. Huge yield losses occur because of biotic stresses every year. Chinese scientists have isolated and cloned from cultivated and wild rice species many genes that contribute to disease and insect resistance, and have transferred these into local varieties.
Integrated crop management. New crop management technologies need to be developed using whole-system approaches. Synergy among fertilizer, water, and pest management can maximize the overall efficiency of the production system. Sustainability of the rice production system can be maintained only when the natural resource base is protected and the health of the rice ecosystem is maximized.
Source: FAO’s FAOSTAT database online and AQUASTAT database online, as of September 2012.