Editors' Notebook

Walking in China's Next Steps

Greg D Horstmeier
By  Greg D Horstmeier , DTN Editor-in-Chief
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Our series of stories this week examines the complicated status of one of agriculture's key customers. It's not meant to be another log on the growing fire of anti-trade sentiment.

Our multi-story package this week is called "China's Next Steps." You'll find several stories under that banner that delve into China's efforts to feed its growing population as well as its efforts to take more control over where that food comes from.

Up front, kudos to the reporting and editing teams who are getting the stories filed. It has been a tough row to hoe. While China and Chinese-backed companies are becoming pretty free with their cash, including the recent $43 billion offer for Syngenta, they remain tight in the public comment arena. Many phone calls and emails sent by our team resulted in either a "no comment" or just total silence. To get information out of Chinese-owned Smithfield Foods, for example, Ag Policy Editor Chris Clayton poured through annual reports and dug up the rare occasions when a business leader spoke in public. Direct contact with the company went unanswered.

That same veil of silence tends to drape over anyone doing business in China. We've for several years been talking to various chemical, equipment, seed and other suppliers who have major research, sales and other operations on the mainland. They've typically been very, very quiet about those operations, and that hasn't changed a lot even as discussions involving ag and China -- the investments in ag companies, the ongoing struggles to get genetically engineered crops approved there, the theft of U.S. hybrid seed -- are commonplace. While Crops Technology Editor Pam Smith's piece, "Outsiders Make Progress," sheds new light on where some key crop input companies are at in their China ventures, there were companies doing business there that passed on the opportunity to comment because the logical questions were too sensitive.

The unsaid message: It's still a challenge for an outside company to do business in China, and talking about those challenges is a surefire way for things to get even tougher.

Should U.S. interests be happy with that silence? Of course not. Should we be surprised at the difficulty? Of course not. Anyone with a widget to sell has been salivating over the chance to sell millions of those widgets in China. Who can blame China, as the 900-pound purchasing gorilla in an overall down global market, for acting the way only a 900-pound gorilla can act.

What should be balanced against that, though, is that China is still a key customer for U.S. agricultural products, and will be for a time.

Might those sales end, if through purchases of technology companies and supply lines, and even by the occasional "borrowing" of such technology, China becomes more self-sufficient? You bet, and that's why we started to take an accounting of this key customer's situation.

Yet China is some distance from being self-sufficient enough to build another Great Wall and shut itself off from major amounts of international trade.

That's why the current anti-trade, and sometimes outright xenophobic, rhetoric heard in many of the political stump speeches these days should be worrisome to anyone making a living in agriculture. We might not like some of our customer's tactics. We should keep the pressure on to level the business and trade playing fields.

So to rattle our metaphoric trowels about building our own "Great Wall" and cut off trade with this, or any other, key ag customer, is foolish. Downright foolhardy given the current pile of grains in the world. Adding to such insular rhetoric certainly isn't the unsaid message of our package of stories this week.

This point about the dangers of stump speeches was more directly made in the report "New Neighbors: 2016 Update, Chinese Investment in the United States by Congressional District" by the National Committee on U.S.-China Relations and the Rhodium Group, coincidentally released this month. In discussing the need to thoroughly debate the benefits and potential pitfalls to the U.S. from growing Chinese investment here, the authors said "The presidential election cycle elevates the risk that this debate may take the opposite turn in 2016. The first months of the year have produced numerous instances of politicians from both parties chasing votes and media attention by issuing dire but ill-founded warnings about Chinese investments, and introducing bills that propose severely clamping down on traditional U.S. openness to" foreign investments."

The full report, worth a careful read, is here: https://www.ncuscr.org/…


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