Evaluation of China's regional grain trade policy

Abstract

During both the old period of the planned economy and the new period of the establishment of a market economy, the Chinese government paid great attention to the regional balance of grain supply and demand. Currently, because of the continuous development of grain marketisation and the fundamental changes taking place in patterns of grain supply and demand, China’s regional grain trade has also undergone fundamental changes. During the period of the planned economy, regional grain trade depended on planned transfers. After the economic reform, the proportion of regional grain trade dependent of market operations has gradually increased. Since 1993, when the planned inter-provincial grain transfer system was abolished, China’s regional grain trade has depended mainly on market operations. In the past, during periods of grain shortage, in order to increase gran supply, areas unsuited to grain production were forced to produce grain anyway. This limited the quantity of regional grain flows. Since the mid 1990s, when the policy of grain production according to comparative advantage was implemented, regional grain flows have increased greatly. We should note, however, that regional grain flows and the related policies still need to be improved.