antiterror13
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Mechanisation and the availability of land and water
Chinese Economics Thread
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Mechanisation and the availability of land and water
The key to low cost agriculture is to move to a new continent and kill all of the native people. This allows for larger farms and economies of scale. Obviously this is not an option for China to pursue. Study the work of Wen Tiejun if you want to learn more, he is China's foremost expert on rural and agricultural policy.
Didn't China lost a lot of farmland during their Civil War? Still it a good way to bind developing nations too you by buying their agri goods. As long as China just keep improving the tech and plans so they can quickly scale up to be self sustained if a war might happen.
I'm reading this report about Bio material industry in China. It says that the demand of corn have skyrocketed in China, due to surging industrial needs（bio fuel, bio-based material，degradable plastics etc）. The price of corn have been rising fast in China ，but in order to protect domestic famers，the government only give tight import quotas. Companies can buy corn at international market price within quota（1% tariff）, when quota is reached. Companies cannot import any more corn or pay very high tariffs（65% tariff）. This hurts Chinese Bio tech industry in areas which need lots of corn. China is also pushing bio-based material as a clearer alternative to chemical-based one.
Thus China is in a delimma right now
Diversified conglomerates have advantages when capital is scarce and the business environment is uncertain.
That is likely to be the case in a developing country.
But once capital is available and the business environment is stable/certain, the advantages of conglomerates are far less.
That is the case in China with its abundant venture and investment capital, along with a rational regulatory environment.
If China did have conglomerates like Korea and Japan, they would have to be truly massive because China is on another scale.
With Korea and Japan, these are geographically small countries, so at least they were geographically concentrated from a management perspective.
But with China, they would also end up spanning a landmass the same size as the continental USA. So there would be a lot more inefficiencies piling up.
Even without conglomerate structures, focused companies in China will still end up being bigger than any Korean or Japanese conglomerate.
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Korea and Japan are not noted for ground-up innovation or creative destruction, precisely because of the conglomerate dominated structure of the economy.
You need many new small-medium sized companies, because some of these will grow into the next multinationals
Different industries and locations in China will favour certain types of business models, and China is big enough to support them all.
Check out the amount of flatland vs mountains in China and you will understand. Do you know those pretty terraced farms? They also make large scale mechanization impossible and to this day a lot of work is done by hand.
$128B invested in Shenzhen, by foreigners, per year. It’s game over.
They are a long way behind in the seed industry as well, which is a big factor. There is huge growth potential here, they are doing things like making seeds that can have an extra harvest per year.
However, they do have a lot of flat land on the plateau, under the desert is a huge body of liquid water which also contains CO2, and they also have greenhouse roofs that let in visible light but converts near-infrared to enough electricity to power the greenhouses.
They are also building a worldwide cold chain logistics system which reduces spoilage and increases quality, food will be kept cold from the producer directly to the consumer.
So, I expect that Chinas food prices will be going down over time, even as the quality and standards start to approach the worlds best.
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Dont believe too much on that. Even chinese leaders have a hard time believing their own numbers.