Over the past decade, the annual No. 1 Document of the Central Government of China has focused on agriculture, highlighting the fundamental importance of the industry to China. The No. 1 Document this year contains five sections with 32 points in total. Its main focus is on agricultural reform and modernization and sets out tasks to develop stronger agriculture, richer farmers and a better rural environment.
For multinational companies and our members, the question is: What does this mean for us? It's a pertinent question. Why? Our Agriculture and Food Partnership program is made up of many active players in the agriculture industry who are looking for opportunities to cooperate and do business in China. Yet, the No. 1 Document is usually focused on China’s domestic agricultural development. Its formal language tends to be brief and puzzling for multinational corporations (MNCs).
Here is what I see as the potential opportunities for AmCham China member companies, most of which can be found in Section 1 of the Document.
Section 1: Building up modern agriculture, and accelerating transformation of the mode of agricultural development. Under the heading, there are seven points：
Point 1. Strengthening the capacity of grain production
Point 2. Deepening the adjustment of the agricultural structure
Point 3. Improving the quality of agricultural produce and level of food safety
Point 4. Strengthening the driving role of technological innovation for agriculture
Point 5. Innovating the distribution model of agricultural produce/goods
Point 6. Strengthening management of rural ecosystems
Point 7. Improving the capacity to coordinate the markets and resources at home and abroad
Let’s take a look at Point 3, which is embedded within the larger topic of food safety. Expectedly, a document on agriculture will touch on food security and supply. In the past two years, the scope of the document has extended to cover food safety, showing how much of a priority it has become for the Chinese government. The following points are stressed regarding food safety:
Setting up an interconnected and shared information platform that tracks the entire process of agricultural products and food safety
Improving the system for food safety supervision and coordination
Strengthening the legal responsibilities of local governments
Food safety is a topic that is being followed closely by many AmCham China member companies. As a matter of fact, the Food and Beverage Forum of AmCham China has engaged with the China Food and Drug Administration (CFDA) on food safety issues over the past few years, especially since the CFDA's organizational upgrading in 2013.
Further, AmCham China and CFDA’s China Center for Food and Drug International Exchange recently signed a memorandum for cooperation in the field of food safety. This will be an important year for our members to work closely with the CFDA to better understand and push forward the revised Food Safety Law and its enforcement. Food safety is an area in which MNCs can make a positive contribution and be a resource for sharing their best practices, experience and other expertise.
Agricultural goods trading
Point 5 covers another important area where MNCs have a role to play. Under Point 5, the following actions are listed:
Improving the trading system
Developing a futures exchange for agricultural goods and developing new categories of futures products
Launching a comprehensive model of e-commerce for rural areas
Trading and futures exchanges are areas where some of our members truly excel and can make great contributions. For the relatively new phenomenon of e-commerce, AmCham China members also possess many years of international experience, which they are ready to share with their Chinese partners and authorities.
General cooperation in agriculture
Needless to say, MNCs will continue and deepen their business operations and cooperation with domestic counterparts in the areas in which they've been operating. In general, the development of the agriculture industry in China welcomes cooperation and foreign investment. Except for the staples of wheat and rice, foreign-invested companies can explore opportunities in other crops, according to an expert on China’s agricultural policy studies.
AmCham China stands committed to assisting its members in expanding their businesses and exploring new opportunities in the field of agriculture, food supply and food safety.
Patrick Wang is Vice President of Government Affairs at AmCham China.