China's expanding global food network shakes up agricultural trade

Proceeding from an article, Bloomberg describes that China’s growing demand for international food sources has led to significant shifts in the global agricultural trade, with countries like Vietnam seeing substantial benefits. 

China’s efforts to secure its food supply have led it to seek new sources in places like Kenya’s macadamia nut groves and Bolivia’s cattle ranches, as part of a broader strategy to diversify away from traditional Western suppliers in recent years. 

The shift away from US-aligned nations benefits countries in the Global South, which China has increasingly targeted as geopolitics divides the world into opposing blocs. Notable beneficiaries include Brazil, a major agricultural exporter, which has gained market share in corn and soybean exports at the expense of the US, while Russia has expanded its sales of grains, edible oils, and meat to China.

This diversification of products and suppliers highlights China’s efforts to build new trade relationships and strengthen food security, especially after US President-elect Donald Trump’s trade war revealed China’s heavy reliance on the US and its allies. This shift is significant because China is the world’s largest agricultural importer, and tariffs have become a key tool for China in trade disputes. With Trump’s return to the presidency and the likelihood of escalating trade tensions, China is in a stronger position to endure trade disruptions.

“Slowly but surely, it seems like China’s finding a path that allows it to rely on international markets, allows it to rely on trade partners, but doesn't create insecurity,” said Even Pay, an agriculture analyst at Trivium China, a policy research consultancy.

While the volumes are still relatively small compared to traditional exports, China's efforts have resulted in a network of suppliers it can turn to if it needs to switch sources.

China’s push to move away from Western legacy suppliers is also set to disrupt the global agricultural trade, which exceeds $1 trillion, and could have lasting effects on countries and producers increasingly drawn into China’s trade network.

The impact of this shift is evident in Vietnam’s coastal towns, which have become key suppliers of lobsters for China’s expanding middle class. Although Vietnam has been exporting lobsters to China since at least 2000, the trade surged in 2020 when Beijing banned imports from Australia. Despite the ban being lifted last month, Australia now faces an uphill battle to reclaim its market share, as Vietnam has become China’s top lobster supplier.

In the northeastern town of Song Cau, approximately 90 per cent of its lobster production is exported to China. One early November morning, Van Phuoc port was packed with vehicles carrying lobsters, so crowded that farmers had to wait in line to weigh their catch before loading it onto trucks for the 1,350-kilometer (840-mile) journey to the Chinese border. With China anticipated to import more seafood ahead of the Lunar New Year, farmers were preparing for an even busier season.

By Naila Huseynova