Home to 21% of the world’s population, China possesses only 7% of productive farmland. As such, shifts in the composition have effects that ripple across the globe.
In 2020, China’s population hit 1.41 billion, with an average annual growth rate of 0.053% since 2010 (the lowest 10-year growth rate since its first population census in 1953).
In addition, China’s population structure is changing, says Wendong Zhang, Iowa State University Extension economist. A growing share of residents are older than 65 and the birth rate is declining.
“With an aging population and a declining fertility rate, China’s population pattern increasingly resembles developed countries,” he says. “China population shift and income growth will increase demand for consumer-oriented products such as meat and vegetables, dairy and wine products versus bulk and intermediate products.”
Change in Demand
While the sheer size of China’s population drives the global economy, Zhang predicts these trends will slow the country’s food demand from key trade partners, such as the U.S.
China committed to purchases nearly $40 billion per year of U.S. agricultural products for the first two years (2020 and 2021) of the phase one agreement, which was signed on Jan. 15, 2020.
“Even though China has substantially increased their ag purchases they are still behind the very ambitious target of the phase one deal,” Zhang says. “The phase one deal left enough leeway to say purchases are contingent on market prices.”
Due in part to the COVID-19 pandemic and related impacts on global demand, China missed its commitment by about 30%, USDA says.
In 2020, U.S. agricultural exports to China totaled $26.4 billion, up $12.6 billion from 2019. China was the largest market for U.S. agricultural exports, a position it last held in 2016. Brazil (22% market share) and the United States (15%) were the top suppliers of agricultural goods to China, followed by the European Union with 14%.
