Feb. 29, 2016 –The American Chamber of Commerce in China today urged the Chinese government to seize the opportunity of ample commodity supplies to enact reforms that will improve the competitiveness of the agriculture sector. In a new report, titled Cooperating on Supply-Side Reforms to Improve Chinese Agricultural Competitiveness, the chamber commends the policy changes already put in motion in 2015 and highlights areas where further cooperation and reform could enhance food safety and security for Chinese consumers.
“We continue to press the Chinese government to increase market access for foreign companies, promote fair and uniform competition and enhance distribution efficiency,” AmCham China Chairman James Zimmerman said. “We believe that with close cooperation and understanding, the results of such efforts will be mutually beneficial to both the US and China, and will promote food security and ensure a reliable food supply at reasonable prices for consumers in both countries.”
Progress over the past year
In 2015, China made some initial progress in opening its agricultural sector to foreign investment. Some agricultural processing items were removed from the revised 2015 negative lists of the four pilot free trade zones. Moreover, the amended “Seed Law of the People’s Republic of China,” enacted on Nov. 4, 2015, promises to clarify the management roles of different agencies, reinforce germplasm protection, and mandate simplified variety registration processes for non-major crops. The government also reduced the floor price for corn in 2015, the first downward adjustment since the floor price policy was introduced in 2007.
AmCham China welcomes these moves in relaxing investment restrictions and adopting a more market-based pricing system. Our members strongly believe that foreign investment will increase the competitiveness of Chinese agriculture by introducing new technologies and accelerating the modernization of the seed industry.
Nevertheless, challenges remain for China’s agriculture industry, including growing stockpiles of national grain reserves, high production costs, a deteriorating natural environment, and struggling agricultural processors. American agribusinesses also encounter various difficulties in entering or operating in the Chinese market, including investment restrictions, trade barriers, and unfair competition.
For the Chinese Government:
- Improve the sustainability and competitiveness of Chinese agriculture by encouraging foreign investment in seed technology, modern agricultural processing, and bulk transportation.
- Ensure that JVs are treated the same as domestic seed companies and, if qualified, allowed access to the Green Channels.
- Increase influence on international agricultural markets by reforming the TRQ system and publishing grain reserve data.
- Reduce trading risks and costs by approving biotech commodities in a more timely and predictable manner and removing the redundant requirement for shipment-specific approvals.
- Simplify import and export procedures for seed and breeding materials.
- Remove restrictions on the importation of US beef, poultry, and pork.
- Improve the speed, fairness, and transparency of the agricultural equipment subsidy registration process for the MOA’s equipment procurement catalogue, both at the national and provincial level.
- Enhance the fairness and transparency of the equipment subsidy compliance investigation process by communicating with affected parties prior to making nationwide “compliance investigation” announcements.
- Increase cooperation with US companies to enable Chinese farmers to produce food more sustainably and in line with global best practices.
For the US Government:
- Work with Chinese officials through bilateral dialogues, including the JCCT, Strategic and Economic Dialogue, and US-China BIT negotiations to address the investment restrictions faced by US agriculture producers.
- Employ a science-based approach to Chinese requests for market access for meat, fish, and produce, including cooked poultry, apples, pears, and catfish.
About AmCham China:
The American Chamber of Commerce in the People's Republic of China (AmCham China) is a non-profit organization which represents US companies and individuals doing business in China. AmCham China's membership comprises more than 3,800 individuals from over 1,000 companies. It has more than 40 industry- and issue-specific forums and committees, offers unique services such as the Business Visa Program, holds a wide range of networking and informational events, and meets with US and Chinese officials to discuss challenges and opportunities facing US firms doing business in China. The Chamber's mission is to help American companies succeed in China through advocacy, information, networking and business support services. For more information, visit: www.amchamchina.org
Download: Cooperating on Supply-Side Reforms to Improve Chinese Agricultural Competitiveness
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