1. China: the expanding market for world soybean production
By Qingyun Xu

2. Introduction World soybean production and consumption
Although there are more than 50 countries cultivate soybeans in the world, the majority of soybean production is concentrated in only a few countries.
The United State, Brazil, Argentina and China are four main soybean producers which account for more than 90 percent of the total soybean production in the world

3. Table: World soybean supply and distribution [Thousand Metric Tons]
Producers
Y:2006/07
Exporters
United States
86,770
29,937
Brazil
57,000
25,900
Argentina
44,000
7,250
China
16,200
Paraguay
3,300
India
7,300
Canada
1,550
4,700
Other
13,428
1,571
Total
229,398
69,508

4. The world production and consumption of soybean consistently increased since 1960s

5. Overview of world soybean trade and imports boom in China
International trade of soybeans and soybean products also rises dramatically in recent years.
Total world imports of soybeans in 2006/07 reached 69,126 thousand Metric Tons

6. China’s soybean imports
China became a world net importer of soybeans since 1996
Rapid increasing in domestic demand of soybeans made China become the world largest importer of soybeans since 2003 instead of European Union.
China’s imports of soybeans achieve 31,500 thousand Metric Tons in 2006/2007 accounting for about 40% of world total imports.

8. Factor analysis of China’s soybean imports boom
Soybean production and domestic market in China
China’s soybean production is uncompetitive compared with other large producers such as U.S., Brazil and Argentina for:
the relative lower yield in soybean production
and the limitation in arable land for soybean cultivation in China

9. China’s domestic soybean market
The sharply growth in soybean domestic demand is the key driver of soybean imports boom for China.
The domestic soybean demand stimulated by the following factors:
Personal income growth, urbanization and population growth
The improvement of China’s soybean processing industry

10. China’s domestic soybean market
Both the limitation of domestic soybean supply and the increasing of domestic demand contribute to the disequilibrium of domestic soybean market in China.
Domestic demand largely surpasses the domestic supply let China’s soybean consumption largely rely on the international supply.

11. China’s political environment for soybean imports boom
The impact of China’s agricultural trade policies on soybean imports before accession to WTO:
China’s trade liberalization policy in soybean and soybean products trade in 1990s.
China allow soybean imports to enter at a tariff as low as 3% since the middle of 1990s.
China’s government lifted and re-imposed value added tax (VAT) on imported soybean meal.

12. China’s agricultural trade policies after accession to WTO and its effect on soybean imports
China joined the World Trade Organization (WTO) on November 11, 2001 and became the 143rd member of WTO.
To fulfill its commitments as a member of WTO, China’s government adjusted its agricultural trade policies in many fields.
Reduction of import tariffs on agricultural and food products.

13. China established annual import quotas (TRQ) for selected key commodities, including wheat, rice, corn, vegetable oils, cotton, sugar, and fertilizer.
China reduced or eliminated import and export monopolies of many agricultural commodities by state-owned trading enterprises to access trade liberalization.

14. the non-tariff barriers such as China’s biotechnology and food safety regulations in 2002 had extremely impacts on its soybean imports

15. Conclusion
China’s demand for soybean imports continues to look strong and provides favorable opportunities for world soybean exporters, especially for U.S.