How China’s rise spells trouble

Steadily increasing demand for meat from a growing middle class in the planet’s most-populous nation is helping to destabilise world food prices. Jonathan Watts reports.

Before lunch Zhang Xiuwen asks his family to give thanks. The table in their small Beijing flat is set with a simple meal: garlic pork in vinegar, fresh tomatoes, leavened bread, potato, cauliflower, and fried egg with cucumber. But for Chinese migrants such as Zhang and his wife, it is a feast that they could only have dreamed about when growing up in a poor country village.

Ten years ago, Zhang swapped the mountain skyline of his rural home near Shangri-La in south-western Yunnan province for the grimy suburbs of west Beijing. For Zhang what he sacrificed in scenery he has more than made up for in lifestyle and diet. Once a rural farmer, Zhang is now an urban tennis coach. He no longer grows food; he buys it. Often hungry during a poor childhood, he can now afford meat every day.

It is a trend repeated across the most populous nation that is affecting global prices of grain and dairy products, and raising the risk of hunger among the world’s poor as grain is diverted to fatten up animals.

Western suppliers claim the shift will ripple through world markets for years. “This is the end of self-sufficiency for China,” says James Rice, chief of China operations for Tyson Foods, the world’s biggest meat producer. “This year will be the last in which China produces enough corn for itself, and the last that it is self-sufficient in protein.”

He predicts China will be importing US$4.5 billion worth of protein by 2010. “Whenever China goes from being a net exporter to a net importer of anything, it has a big impact on global prices. Just look at oil. The $40 per barrel price popped just when China started buying.”

By western standards, Zhang is a modest consumer. His Beijing flat is small. He and his wife are limited to one child by the strict family-planning policy. Their only home appliances are a refrigerator, a television, a computer and a washing machine.

But, compared with his childhood, it is clear how far he has moved towards the urban middle class. Almost 60 years ago, tens of millions of people among Zhang’s grandparents’ generation died of starvation in the famines that followed Mao Zedong’s disastrous Great Leap Forward. Thirty years ago his parents in Yunnan were still struggling to put enough food on the table. “In my childhood, I sometimes went hungry. During July and August, just before harvest, we usually did not have enough to eat. I remember once when some guests came to visit us we could not find any food at home so we had to borrow some wheat powder from the neighbour to make pancakes.”

Today the family never goes short. Zhang spends only one-fifth of his 5,000 yuan (about US$720) monthly income on food, but it is plenty to ensure a tasty, balanced diet for him, his wife, their baby and the relatives who come to dine at least once a week.

Fifteen years ago, most homes in Beijing relied primarily on cabbage to see them through the winter. Today, Zhang can buy fresh fruit and vegetables from his local store or from the nearest supermarket. In recent years, America’s Wal-Mart, France’s Carrefour, Britain’s Tesco and Japan’s Ito-Yokado have been expanding in China faster than in any other country. Together they are opening hundreds of new stores every year in the expectation that Chinese consumption will surge as its middle class grows bigger and richer.

Nothing symbolises such change more than meat. The world’s most populous nation is becoming more carnivorous. In 1980, when the population was still under one billion, the average Chinese person ate 20 kilogrammes of meat; last year, with an extra 300 million people, it was 54 kilogrammes. The country as a whole now chomps through more than 60 million tonnes of meat a year, roughly equivalent to 240 million cows, or 600 million pigs or 24 billion chickens. It is a worldwide trend that is taking grain away from the world’s poor. The consumption of meat in developing countries is rising by more than 5% a year.

Zhang reckons his family spend about 250 yuan (US$36) a week on food, half of it on meat. “I love beef. I was told it is a good source of protein for sportsmen, that it gives us strength. But I also buy more chicken, pork and fish than before so that I get a balanced diet.”

To produce a kilogram of beef, farmers need eight kilogrammes of feed; for pork about six kilogrammes; for chicken two kilogrammes. Worldwide, 700 million tonnes of grain are needed to fatten animals each year.

As he slices pork in his kitchen, Zhang explains that even the lunch he is preparing would have been considered a luxury during his childhood. “In the past, we couldn’t imagine a meal like this,” he says. “Children looked forward to spring festival, partly because it was fun, but also because it was a chance to eat meat. But now we can eat meat every day if we want. It has become part of our lives.”

Until the age of 20, Zhang says, he never had milk. The reason was simple: his family had no cows. It was a similar story across the country, which has traditionally had a very low reliance on dairy products. In many lowland regions, butter was a rare luxury. For Zhang the change came when he moved to the city. “Now I earn a living to support my family, we drink quite a lot of milk. I guess we get through a one-litre carton every day.”

This will become more commonplace. Last year the Chinese prime minister, Wen Jiabao, said he dreamed of the day when every child in the country could consume a pint of milk a day. That will require either a sharp rise in herd sizes or greater demand on international markets. China currently is importing one-third of the world’s traded milk. In Germany — a major exporter — consumers have complained that Chinese demand is pushing up the cost of their breakfast cereal.

Zhang’s diet is modest compared with many urbanites. He rarely eats at restaurants and never goes to fast-food outlets. But young Beijingers are becoming as enthusiastic about French fries, hamburgers and fried chicken as their counterparts in New York or London. In the past 20 years KFC [formerly the Kentucky Fried Chicken restaurant chain] has gone from one to 2,000 outlets in China, and McDonald’s from zero to 800.

In lifting 300 million people out of poverty over the past 30 years, China also saw an improvement in diets that made the country healthier. According to the United Nations World Food Programme (WFP), a six-year-old boy today in China is six kilogrammes heavier and six centimetres taller than his counterpart at the start of economic reforms in 1978. But there are signs that more children and adults are simply becoming fatter. In the first 15 years after economic reforms, the number of people defined as overweight in China more than doubled to 200 million, according to the Asian Development Bank (ADB).

Wang remembers her parents talking about hunger, about stomach aches that came from a diet of only broomcorn and sweet potato, about grandparents who had to forage in the bracken for scraps of left-over harvest to feed their children. Her husband has similar anecdotes about the suffering of the past, but now he says the situation has gone too far in the opposite direction.

“Some people even in their thirties already have high blood pressure, high cholesterol and other health problems,” he says. “Many [tennis] students want to lose weight. Some are very fat and have difficulty running or walking up stairs. That is when they realise they are overweight and need to exercise.”

Growing demand for meat has pushed up prices in the past year and a half. Restaurateurs and shop owners are feeling the pinch. Most buy from Baliqiao market, a vast centre of wholesale suppliers a few miles east of Zhang’s home in east Beijing. Since the last day of 2006, stall holders have increased the price of a kilogramme of pork — the most popular meat in China — from 12.3 yuan (about US$1.78) to 20.3 yuan (about US$2.95). Beef has risen by 73%, lamb by 65% and chicken by 30%.

Inflation is a growing source of political and economic concern and also could dent China’s competitiveness and push up global prices of manufactured goods. With costs rising in the cities, factories have to offer migrants higher wages to lure them from the countryside, where their crops now bring in better incomes. Even salary rises are often not enough. Many manufacturers complain of worker shortages. The pool of cheap Chinese labour is clearly not as inexhaustible as once thought.

The government’s inflation target of 4.8% this year looks impossible. In April 2008, the consumer price index rose by 8.5%, driven largely by food and oil increases. Overseas analysts warn that this could have a damaging knock-on effect for the global economy. China’s cheap goods have kept consumer prices low for more than a decade. But as workers need to spend more on food they need to earn more, and the cost of goods goes up. The risk of a new bout of global inflation is rising.

Beijing insists China is not a major contributor to global food-price inflation. Many analysts agree. China boasts an impressive degree of food self-sufficiency, particularly given it must feed more than one-fifth of the world’s people on less than 10% of the arable land.

The lunch that Zhang cooked for his family is far from the lavish feasts seen on tables in many western restaurants. On average, Americans eat 129% more meat than the Chinese; while Europeans consume 83% more. But in China’s case the fear is not of individual consumption, but of the multiples of scale and speed of 1.3 billion people growing richer at a rate of more than 10% a year. Zhang, the former farmer is aware of the concerns. The best way to deal with them, he says, is to avoid waste.

“According to an old Chinese saying, we should wear enough clothing to avoid feeling cold and eat enough food to avoid feeling hungry. That means we should not eat too luxuriously. We should practise this rule by ourselves and encourage others to do the same. It would be good if we could influence others to save food. My child is still young but when he drops even one grain of rice I ask him to pick it up and eat it. I tell him it is the product of a lot of hard work by an old farmer somewhere.”


Questions: China and food

How is China’s diet changing?

Thanks to two decades of double-digit growth, hundreds of millions of Chinese have been lifted out of subsistence-level poverty. Two generations ago, China was afflicted by starvation. A generation ago, meat was reserved for special occasions. Today it is common. Worldwide, protein consumption tends to rise with wealth. In China, since 1980, the average person’s annual meat consumption has risen from 20 kilogrammes to 54 kilogrammes.

What other factors are involved?

Urbanisation is turning farmers into factory workers, and agricultural fields into industrial parks. Each year 8.5 million people move from food-producing villages to hungry cities. The upside is a gain in efficiency and economic activity. The downside is a surge in consumption and waste. So much farmland has been converted for factories, roads and homes that the country’s arable land fell last year to 470,000 square miles (1.2 million square kilometers), less than 10,000 above the minimum needed to feed China.

How big is the Chinese middle class?

An estimated 150 million people earn more than 20,000 yuan (nearly US$3,000) a year, which leaves a little disposable income. The ranks of this mostly urban middle class are forecast to almost double in a decade, further raising consumption of protein. In anticipation, big foreign supermarket chains are opening hundreds of stores. Fast-food retailers are ahead of them.

What about nutrition?

On an individual level, China is way behind developed countries. The average American chomps through 124 kilogrammes of meat a year, mostly beef, which is the least efficient way to convert grain to protein; beef production requires four times as much feed per kilogramme of meat as does chicken. Europeans have a leaner diet, but still get through 89 kilogrammes of meat a year. At a national level, however, China is consuming more meat and dairy products than any other country due to its large population and fast-growing economy.

Is China to blame for food problems?

The World Food Programme, the Chinese government and most experts say not. Because China is largely self-sufficient, other factors weight heavier: rising oil prices, increased use of biofuels, climate change and population growth. But China has pushed up global prices of products it needs to import, such as soya beans and milk. Within China, rising consumption and disease among the swine herds have raised prices of pork and other meats since the start of 2007. This has not yet rippled across its borders. In the long term, however, China looks set to play a more important role in the global food trade as it imports more to meet its growing domestic demand. By one estimate, this year will be the last in which China is self-sufficient in protein.

Copyright Guardian News and Media Limited 2008


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