Faced with the global food crisis, Beijing is reviving the elements of the planned economy

Faced with the global food crisis, Beijing is reviving the elements of the planned economy

China could revive key elements of its 20th-century planned economy to provide domestic stability to reduce dependence on the West for consumer goods, especially war-affected foodstuffs in Ukraine, according to experts.

Beijing is promoting the development of agricultural supply and marketing cooperatives and public canteens to help the government control the supply of essential foodstuffs as relations between China and Western democracies deteriorate. The canteens are similar to university cafeterias with limited offerings and prices deemed affordable by officials in Beijing.

Xia Ming, a professor of political science at the City University of New York, told VOA Mandarin in a November 4 telephone interview: “The emergence of supply and marketing cooperatives is often the product of a shortage economic. Today, China obviously faces a large number of economic crises. If these crises lead to economic scarcity, the country must control the situation, especially these basic supplies, for stability.

Wen Guanzhong, professor emeritus of economics at Trinity College, told VOA Mandarin by phone Nov. 4 that “Generally, because (Chinese President) Xi Jinping knows he’s actually going down a path that’s at the opposite of the path of deepening global marketization, he also knows that China’s relations with countries around the world, especially Western countries, will become increasingly strained. He hopes to restore global control of society through the CCP (Chinese Communist Party), including control of supply and sales.

Xie Tian, ​​a business professor at the University of South Carolina Aiken, said in an interview with VOA Mandarin on Nov. 4, “I think the CCP’s ambition and desire to use force against Taiwan could be implemented very soon. Canteens, supply and marketing cooperatives can control social materials and food supply in wartime, which is the best way for China. »

In Hubei province alone, local officials have restored and rebuilt 1,373 local supply and marketing cooperatives with 452,000 members, according to a report published last month in the official Hubei Daily. Officials told the media that by 2025, cooperatives will have 1.5 million members.

In 2014, there were 696 cooperatives in the province, a decrease of 61 percent from a peak of 1,800 in 1984, according to a November 2 report in the state-affiliated Beijing Business Daily (BBD). Nationwide, the BBD reported, there are currently 31,000 supply and marketing cooperatives in China, with nearly 400,000 outlets.

At the 20th National Congress of the Communist Party of China, which ended on October 22, Liang Huiling, who headed the China Federation of Supply and Marketing Cooperatives, was promoted to a member of the CPC Central Committee. After the congress, the agency immediately issued a recruitment bulletin, which experts saw as a sign that China’s future economic development will be led by a government determined to improve self-sufficiency and economic security.

Global food crisis

China is one of the biggest food importers in the world. According to a 2018 report by CSIS, a Washington-based think tank, China’s food imports exceed its exports, resulting in a food trade deficit.

Xia said China was looking for alternative sources of grain due to strained relations with Western exporters such as the United States, Canada and Australia. Beijing’s fear is that if these exporting countries reduce sales to China for geopolitical reasons or to meet their own domestic demands, prices could rise across China and cause domestic discontent.

According to Reuters, the IMF said in September that disruptions to global grain flows caused by the war in Ukraine have caused the worst food security crisis since that which followed the global financial crisis of 2007-2008.

Xia said China’s refusal to publicly condemn Russia for invading Ukraine in February has exacerbated the discontent of Western democracies with China.

“When China wants to team up with Russia and fight against the West, I think it will prepare for many food and energy security crises,” he told VOA Mandarin. “So if he wants to be hostile to Western countries or use wolf warrior diplomacy, I think he has to face (the consequences).”

Agricultural supply and marketing cooperatives first appeared in China in the 1950s, when Beijing was planning and controlling the economy. When Deng Xiaoping proposed the reform and opening up of the economy in 1978, supply and marketing cooperatives began to weaken, but they never disappeared.

Under the leadership of President Xi Jinping, the Chinese government has called for the reform of supply and marketing cooperatives as part of its gradual tightening of economic control.

In 2021, Beijing proposed a “three-in-one” comprehensive cooperation pilot project in food production, supply and marketing, which included loans to farmers and distributors. Some 49,000 state employees oversee the entire system of supply and marketing cooperatives from the county level, according to the official website.

According to the first half of 2022 data from the All-China Federation of Supply and Marketing Cooperatives, the sales of supply and marketing cooperatives in the whole system exceeded 435 billion dollars (2.9 trillion yuan). – a year-on-year increase of 19.1%. In 2021, sales totaled about $926.9 billion (6.26 trillion yuan), according to official figures.

Concerned consumers

Consumers fear that Beijing’s new focus on supply and marketing cooperatives and canteens will spell the end of the current market-oriented shops and restaurants, both of which are contributing to the growth of the private economy.

According to Chinese media, Chinese officials tried last week to allay those concerns, saying restarting the supply and marketing cooperatives will allow them “to take advantage of their many outlets, improve network function of county traffic services and to promote rural revitalization”. .”

Officials added that community pilot projects, including building canteens, “are not mandatory, not everything on file should be tried.”

Wen said the difference between the cooperatives of yesterday and today “depends on how private enterprises will be treated in the future, whether they are restricted or whether supply and marketing cooperatives are managed. by the state enjoy privileges such as monopoly power”.

Xie believes that the state-run economy lacks the vitality of the market economy, which will eventually affect the living standards of Chinese residents.

He said: “Just like the canteens and the supply and marketing cooperatives of old, it is impossible to have the vitality of the market economy after the return to the planned economy. … Only the meals the most basic, or the most basic foods and services can be provided, which will certainly affect the living standards of the Chinese people.”

Adrianna Zhang contributed to this report.

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