China’s economic growth slowed from 9.2% in 2009 to 7.5% in 2013 but the country remains a huge force in global food demand, Eric Trachtenberg, director of the food and agriculture sector for McLarty Associates, Washington, D.C., said during an Oct. 18 workshop on China at Fresh Summit 2013.
With U.S. fresh fruit exports to China valued at a record $111.4 million in 2012, he said China’s demand for imported fruits will continue to increase.
“Domestic production cannot keep up with demand,” he said.
Between 2013 and 2020, Trachtenberg said China’s agricultural sector faces the trends of urban migration, an aging population, the rising middle class, environmental constraints, agricultural modernization, rising domestic demand, growing food safety concerns, rural land reform and increasing trade.
Agriculture contributes about 9.6% of China’s gross domestic product, he said, with nearly 40% of the workforce engaged in agriculture. China is the world’s number one producer of both fruits and vegetables, with 45% and 49% of global output, respectively.
Still, Trachtenberg said there is very little land in China suitable for farming. China has ten persons per hectare (about 2.5 acres) of arable land, more than twice the world average of 4.4 people per hectare. The amount of arable land in China is shrinking and is now about 298 million acres, or just 14% of China’s total land area.
As China’s economy has grown, there is increased demand for higher value products like fruits and vegetables, he said.
Urban migration will pull at least 1.5% of the rural population to the cities every year. Trachtenberg said that 250 million rural poor have moved to China’s cities already and 300 million more are expected to do so by 2020. By that time, the urban population will account for 70% of the economy.
“There will be more urban poor, less rural labor,” he said
The elderly population of China will increase from 167 million in 2010 to 300 million by in 2050, with a rising number of “empty nester” households.
“China will grow old as it growers richer,” Trachtenberg said.
Older consumers will create more demand for healthy food, he said.
The Middle Class will grow from 300 million in 2013 to 600 million in 2020, with annual wage growth of near 10% expected to continue.