CHINA: AGRICULTURAL IMPORTS TO CONTINUE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85T00875R001700050045-6
• Release Decision: RIPPUB
• Original Classification: S
• Document Page Count: 21
• Document Creation Date: December 20, 2016
• Document Release Date: March 13, 2006
• Sequence Number: 45
• Publication Date: June 1, 1973
• Content Type: IM

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Secret
DIRECTORATE OF
INTELLIGENCE
Intelligence Memorandum
China: Agricultural Imports, to Continue
-:-,- CIA
0 0 C U ME'.` '!' T IS 31. R V I COE S 0 R. H
Lai
D~- rlOT DESTROY
Secret
ER IM 73.48
June 1973
1~4
Copy No.
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China: Agricultural Imports to Continue
June 197:3
Agricultural imports by the People's Republic of China this year are at an all time
high, and the United States has emerged as the principal supplier. To date, Peking has
ordered more than US $1 billion worth of grain, cotton, vegetable oil, and soybeans for
delivery in 1973, almost $475 million of which is of US origin. Peking also has pur-
ichased sizable quantities of US grain and cotton for delivery in the first six months
of 1974. Peking's unusually heavy buying in world commodity markets since the fall of
1972 is mainly attributable to the subnormal 1972 harvest in China and to concern about
tight world markets in grain, vegetable oil, soybeans, and cotton.
Although the disappointing 1972 harvest has led Peking to make short-term trade
and acreage adjustments, the problem is much deeper. Weaknesses in the agricultural policies
of the past decade have caused a decline in the rate of growth of overall agricultural
output since 1966. Peking has reassessed these policies and has correctly concluded that
adjustments in investment priorities are again necessary and that longer term solutions
are required for China's agricultural problems. In particular, the investment of state funds
in modern industries for the support of agriculture has been accelerated. The most notable
moves thus far have been the recent purchas;~ of four large urea plants and four synthetic
fiber plants f-urn abroad.
The new chemical plants will not begin to come on stream until 1976. In the interim,
China will continue to rely on agricultural imports to maintain consumption, especially
in years of below-normal harvests. Moreover, China's populati,n and hence requirements
for food and fiber for domestic consumption are also increasing, and even accelerated
programs to modernize agriculture may not enable China to attain self-sufficiency by 1976.
Somo erosion of the US position as the principal supplier of agricultural imports to China
may accompany a return to normal international supply conditions. Nevertheless, Chinese
actions suggest that the overall competitive position of the United States in the Chinese
market will remain strong.
25X1 Note: Comments and queries regarding this memorandum are welcomed. They may he
directed to
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DISCUSSION
1. The year 19731 may mark the urst pivotal period in agricultural
policy of the People's Republic of China (PRC) in a decade. In 1962, Peking
was forced to adopt an "agriculture first" policy to recover from the debacle
of the Great Leap Forward. Now new, albeit less sweeping, policy changes
are under way because the goals of the 1962 policies have not been met.
China is still not self-sufficient in the o"tput of both grain and essential
non-grain crops, especially cotton and oilseeds, and it has become more
rather than less dependent on agricultural imports. This memorandum
examines (a) the reasons for China's expanded requirements for agricultural
imports, (b) the impact that the new agricultural policies will have of
China's short-run and longer run import requirements for agricultural
commodities, and (c) the role that the United States may play in this trade.
The 1972 Harvest Problem
2. The 1972 harvest was admittedly subnormal throughout China.
As shown in Table 1, grain output fell by 6 million to 10 million metric
tons. Crops are poor in some parts of China every year, but local shortfalls
are usually offset by favorable harvests in other areas. This situation was
not so in 1972, when crops in all of China's major agricultural regions
were affected at one time or another by unseasonable cold, drought, flood,
waterlogging, insects, or disease. Grain production was down by about 4%
(10 million tons), but grain fared better than the major non-grain crops.
For example, the output of cotton declined by an estimated 15%25% and
autumn harvested oilseeds and soybeans were also hard hit.
3. Regionally, conditions in the rice growing areas of south China
(see the Map, regions I-III) were not as bad as those in north China. In
south China the weather was poor in the spring and early summer, but
it improved during the remainder of the growing season. The transplanting
of early rice was delayed in some areas and forgone in others because of
the late arrival of the spring monsoon rains. The dry spell was followed
first by torrential rains and flooding and then by pestilence. Conditions
for the more important intermediate and late rice crops were better. Rainfall
was more timely and growing conditions were relatively good except for
a sizable pocket of severe drought in the central Yangtze Valley. In all,
rice output was probably only marginally below the fairly good 1971 crop.
ess otherwise m cats , years are given In calendar years throughout this memorandum.
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People's Republic of China:
Estimated and Reported Output of Grains
1949
108
1950
125
1951
135
1952
154
1953
157
1954
160
1955
175
1956
182
1957
185
1958
200
250
1959
165
270
1966
160
150
1961
160
162
1962
175-180
174
1963
175.180
183
1964
180.185
200
1965
190.195
200
1966
195.200
No claim
1967
210.215
230
1968
195.200
No claim
1969
200-205
No :1aim
1970
220-225
240
1971
220.225
246
1972
210.215
236-240
1. Grain output data as reported by various Chinese sources
since 1958 may not be consistent with the 1949-57 grain
output series compiled by the State Statistical Bureau. The
series consists of rice, small gains, and coarse grains (all on
an unmilled basis), lentils and pulses, and tuber crops
converted to grain equivalent at a ratio of four units of tubers
to one unit of grain. Claims for more recent years may have
been broadened to include more commodities, such as
soybeans, or some tubers on a raw rather than a grain
equivalent basis.
SECRET
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4. Growing conditions in most areas of north China (see the Map,
regions IV-A and V-A) deteriorated from good in the first half of the
growing season to unfavorable in the second half. Conditions in the spring
were almost ideal for the re-germination of winter wheat and the planting
of coarse grains (corn, millet, and sorghum) and cotton. However, in June
the weather turned for the worse. During most of the month, rainfall was
sparse over the northern two-thirds of the North China Plain, while,
paradoxically, the southern one-third was drenched by torrential rains.
Winter wheat - reportedly up by 8% over the mediocre 1971 crop --
escaped nature's wrath, but the much more important fall harvested coarse
grains and cotton did not. Damage to the latter was especially severe because
inclement weather struck the crop at its most vulnerable stage.
5. In the fall the weather turned wet, hindering harvesting of coarse
grains, cotton, and soybeans in the North China Plain and northeast China.
The soybean crop in northeast China - China's major producer of beans
for export - was especially hard hit. Many beans rotted in the fields, and
the quality of those that were harvested was seriously reduced by high
moisture content. Damage was so extensive that Peking was unable to fulfill
its 1972 export commitment to Japan and other countries. Apparently few
if any beans will be available for export until after the 1973 crop is harvested
in September and October.
6. The availability of oilseeds in China is currently the lowest in
many years. The poor cotton harvest of 1972 greatly reduced the quantity
of cottonseed that could be crushed for oil. Similarly, generally subnormal
growing conditions throughout China also produced a shortfall in the harvest
of other major oilseeds, such as peanuts and sesame. The output of rapeseed,
harvested in the spring of 1972, was claimed to be up by 20%, largely
because of an increase in the acreage sown to this winter crop. The increase
was not great enough, however, to offset the sharp decline in the other
oilseeds, which collectively account for about 70% of China's output of
oilseeds.
Effects of the 1972 Harvest on Imports
7. The disappointing 1972 harvest and almost unprecedentedly tight
world supplies of grain, oilseeds, and certain grades of cotton have forced
.Peking to alter its buying practices for 1972-74 and possibly beyond. Since
the late summer of 1972 the PRC has (a) stepped up imports of grain
and cotton, (b) broadened imports to include corn, lower grades of cotton,
vegetable oils, and oilseeds, and (c) turned to new (the United States) and
former (Australia and Latin America) suppliers. The degree of change has
varied from commodity to commodity as follows.
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8. In the fall of 1969, China began to purchase one grain -
wheat-exclusively from Canada. This arrangement was broken in August
1972 when the Canadian dockstrike interrupted the orderly flow of
imported wheat into northern Chinese cities. Between late August and
mid-October 1972, the Chinese acquired about 535,000 tons of US wheat
to offset the disruption of the dockstrike and to make up for the shortfall
in the harvest of autumn grain in the north. From mid-October to November
the Chinese, following their normal practice, began to purchase grain for
delivery in 1973. The initial purchase was for 1.0 million tons of Australian
wheat - the first contract signed with that country since the fall of 1969 -
followed by a contract for 1.7 million tons of Canadian wheat. Unlike in
past years, negotiations took place in a strong seller's market
9. Following the departure of the Canadian negotiators in December
1972, China was confronted by new problems. Peking was informed that,
because of the poor wheat harvest in Australia, imports from the country
would be cut from the original contract for 1.0 million tons to 600,000
tons. Furthermore, unseasonal autumn rainfall seriously affected the harvest
of coarse grains and soybeans in northeast China. Normally the North China
Plain depends on shipments of grain from this region and on grain imports
from abroad to make ends meet. The sudden worsening of this harvest
forced the Chinese to buy whatever grain they could find at a price they
could afford to pay. Thus the Chinese turned to US grain for a second
time. In all, about 575,000 tons of corn - which was cheaper and more
readily available than wheat - was purchased as a stopgap until conditions
in the world grain trade became more settled. No further grain purchases
were made until the late spring of 1973.
10. As shown in Table 2, the surge of buying activity pushed grain
imports for 1972 to 4.8 million tons, about 1.8 million tons more than
the low amount imported in 1971. For 1973, China has thus far contracted
for the delivery of about 5.5 million tons of grain.2 This quantity should
be sufficient to cover China's import requirements during the balance of
1973, barring no unusually heavy losses in the harvest of grain. The only
nations that are expected to have uncommitted stocks of grain for export
in late 1973 are the United States (wheat and corn) and Argentina (corn).
Canada may have some wheat available later in the year if currently
unfavorable growing conditions improve.
2. This total excludes (a) about 200,000 tons of US corn and wheat contracted for in 1972 but
X delivered until January and f ebruary 1973 and (b) the 400,000 tons of wheat that Australia
is unable to deliver in 1973.
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People's Republic of China: Imports of Grain
1970.73
1970
1971
1972
1973
Total
4,632
3,026
4,844
5,716
Canada
1,967
3,013
3,882
2,450
Australia
2,218
13
....
600
Argentina
....
....
....
200
France
447
....
....
United States
....
....
962
2,466
11. In mid-May, Peking began the forward buying of grain to cover
China's 1974 import requirements. Purchases to date include about
1.5 million tons of wheat and 850,000 tons of corn from the United States,
almost all of which probably will arrive in China in the first six months
rjf 1974. This grain, together with 400,000 tons of Australian wheat that
will be delivered after 1 January 1974, is roughly equivalent to China's
normal six-month requirement for imported grain. The forward buying of
3rain this early in the year probably reflects Peking's concern over tight
and uncertain world grain supplies.
12. Total PRC imports of cotton for the year 1972/733 may approach
490,000 tons (2,250,000 bales), more than three times 1971/72 deliveries
and nearly three times the record imports of 1964/65. Only a part of the
heav3 purchasing of cotton is attributable to the poor 1972 cotton crop.
From 1968/69 through 1971/72 cotton imports increased by an average
of about one-third each year, suggesting that domestic consumption has
outstripped domestic production since the record cotton harvest of 1967
(available for spinning in 1967/68) was gathered.
13. Cotton . imports will remain unusually high at least through
1973/74. The 1973 cotton crop will be below average because of sizable
shifts of cotton land to grain - a normal practice following a poor harvest
of grain in the North China Plain. This smaller crop, together with a
continuation of the trend of increasing imports of cotton, would suggest
purchases of about 1.2 million to 1.5 million bales, assuming normal
weather. Peking already has made sizable purchases of new-crop cotton
Cotton imports are reported for the year beginning 1 August and ending 31 July the following
year. Imports for 1972/73, for example, are for the 12-month period 1 August 1972 - 31 July
1973.
E
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(cotton now being sown) from the United States and elsewhere for delivery
after China's 1973 crop will be available for spinning. The purchasing of
cotton so far in advance is unprecendented for the Chinese.
Vegetable Oils
14. The overall shortfall in most major oilseeds - peanuts, sesame,
and cottonseed ?- for crushing in 1972 forced the PRC to purchase sizable
quantities of vegetable oil for the first time.4 Purchases to date include
more than 100,000 tons of US soybean oil and about 4,000 tons of
Philippine coconut oil. China also has purchased 200,000 tons of soybeans
from the United States, 20,000 tons of which are for delivery to Romania
on Chinese account. The acreage of rapeseed and cotton has been cut back
in 1973, and similar reductions in the acreages of peanuts and sesame are
anticipated. Thus, China is likely to be in the market for still more vegetable
oil and possibly soybeans this year.
Sugar
15. Despite claims of record crops of sugar cane and sugar beets in
.1972, the PRC has been buying unusually large quantities of sugar. China
normally exchanges rice for about 400,000 tons of sugar from Cuba each
year. Because of the poor harvest of sugar cane in Cuba, deliveries to China
in 1972 declined by about one-half. Purchases from Brazil in 1972
reportedly more than offset the lower imports from Cuba. Rumors are that
China already has purchased sizable quantities of Brazilian sugar for delivery
in 1973.
16. In summary, Peking's agricultural imports are at an all time high,
and the United States is currently the leading supplier of these commodities.
To date, Peking has purchased more than $1.0 billion worth of agricultural
commodities for delivery in 1973,5 almost $475 million of which is of US
origin (see Table 3). Peking will import about 5.7 million tons of grain,
more than 2.2 million bales (nearly 490,000 tons) of cotton,6 more than
150,000 tons of vegetable oil, and an undetermined quantity of soybeans.
By value, about 45% of the grain, 35% of the cotton, and most of the
vegetable oil and soybeans will be supplied by the United States.
The Outlook for the 1973 Harvest
17. The additional amounts of agricultural commodities that Peking
will import in the remainder of 1973 and the first six months of 1974
4. Soybeans - a major crop in China - are not believed to be a major source of vegetable oil.
Most beans are made into soysauce, cunsumed directly, or exported.
5. On a c. and f. basis. This figure does not include purchases of sugar.
6. For the year beginning 1 August 1972.
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People's Republic of China: Imports of Agricultural Commodities)
1973
Total US Non-US Total US Non-US
Thousand Metric Tons Thousand US $
Total
(c.i.f.) value 1,045,343 474,174 571,169
Grain 5,716 2,4662 3,250 526,845 238,361 288,484
Soybeans 200 200 .... 45,787 45,787 ....
Vegetable
oil 154.5 1333 21.5k 45,613 38,448 7,16
Thousand Dales
Cottons 2,245 810 1,435 427,098 151,578 275,520
1. C.U. basis, including contracts negotiated through 18 May 1973
2. Including 1,316,000 tons of corn valued at $122,474,000 and 1,150,000 tons ofwhestvalued
at $115,887,000.
3. Including 17,000 tons of linseed oil valued at $5,110,000 and 116,000 tons of soybean oil
valued at $33,338,000. The soybean oil includes 11,000 tons of "omnibus" orgin.
4. Including 17,500 tons of Malaysian palm oil and 4,000 tons of Philippine coconut oil.
5. For the year beginning 1 August 1972.
will depend on growing conditions in China during the balance of the current
cropping season. It is too early to predict what these conditions will be,
but because of acreage shifts the outlook for grains is brighter than that
for cotton and oilseeds.
18. As is customary in China following a subnormal harvest, the
acreage seeded to grains has been increased. In the fall of 1972 the Chinese
sought to maximize the acreage of winter grains.7 This effort probably fell
somewhat short because of the generally wet autumn. Nevertheless, the
acreage sown to winter wheat, barley, rye, and legumes was much larger
than in recent years. Similarly, the acreage of spring sown grains - for
harvest in the early autumn - was also enlarged. The potential benefits
of these programs will in part be canceled by the resulting contractions
in the acreage of (a) higher yielding and more stable early autumn harvested
coarse grains, (b) non-grain crops, especially cotton and oilseeds, and
(c) possibly early rice. The regime already has shown concern that programs
to grow grain rather than cotton and industrial crops may be carried too
far. For example, at the January 1973 national conference on cotton
production the regime insisted that state sowing plans in 1973 be strictly
7. Winter crops are sown in the fall and hnrvcsted in the spring or summer of the following year.
Where conditions permit, this acreage is then sown with grains to be harvested in the late autumn.
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followed. This, together with the emphasis on increasing cotton yields and
the absence of references to increases in cotton acreage, shows Peking's
anxiety that cotton acreage may be cut too deeply. The unusually heavy
forward buying of cotton for delivery beginning late this year suggests that
Peking's anxieties are not altogether groundless.
19. Peking's gamble to maximize grain output seems to be paying
off. Precipitation during the winter and thus far Lito the spring has been
generally above average in north China. This condition is favorable for the
growth of winter wheat and also for the spring sowing of coarse grains.
In south China the spring has been warm and free of crop killing cold
snaps. Fieldwork is ahead of schedule in most areas, and the spring rains --
vital for the transplanting of rice - arrived on time.
20. Normally dry regions IV-B and V-B (see the Map) have complained
of drought as have some areas of Szechwan Province. Chekiang Province
and other areas of east China have complained recently of too much rain.
Peasants in many areas of Heilungking Province - the leading producer of
spring wheat and also soybeans for export -- have not been able to get
into the fields because of high soil moisture. China's weather regime is
unstable, and weather conditions can deteriorate rapidly. On the heels of
last year's short grain harvest a serious worsening of growing conditions
over key areas would force Peking to buy far more grain than the 1973
requirement, estimated at about 6 million tons.
Peking's Reassessment of Agricultural Policy
21. The implications of the subnormal 1972 harvest extend beyond
short-term acreage and trade adjustments. Old agricultural problems have
resurfaced as have weaknesses in the "agriculture first" and "stablization"
policies of the past 10 years.8 Peking apparently has reassessed these policies
and has concluded that adjustment in investment priorities is again necessary
and that longer term solutions are required for China's agricultural problems.
22. Until 1971 the objectives of the "agriculture first" and
"stabilization" policies were ostensibly on the way to being met. Grain
production was first restored to the pre - Leap Forward level and thereafter
increased at a rate somewhat higher than the population growth rate.
8. These policies provided for (a) a much greater share of state investment for agriculture, (b) a
restructuring of the industrial sector to produce modern inputs for agriculture, and (c) a retreat
from centralized communal management of agriculture. For a more detailed treatment of these
policies see "China: Agricultural Development, 1949-71" by A. L. Erisman in People's Republic
of China: An Economic Assessment, Joint Economic Committee of the Congress of the United
States, May 1972.
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Peking - confident that costly grain imports would soon be phased out -
began short-term purchasing of grain in the fall of 1969. This optimism
was based on the premise that the North China Plain would soon become
self-sufficient in the output of grain.
23. Peking's optimism was premature. Self-sufficiency was not
realized, although rising levels of output permitted grain imports to be
reduced from 4.4 million tons in 1968 to 3.0 million tons in 1971 (see
Table 4). At the same time the output of essential industrial crops,
especially cotton and oilseeds, did not keep pace with the increase in grain
production. Cotton imports increased by an average of about one-third each
year, or from 66,000 tons (305,000 bales) in 1968/69 to about 160,000
tons (737,000 bales) in 1971/72 (see Table 5). On a per capita basis, grains
approached the pre - Leap Forward level. Cotton textiles and vegetable
oils, on the other hand, did not increase appreciably above the 1959-61
lows, and rations for these commodities were near the lowest permissible
levels.9
24. Despite the overriding priority for grain production, even the
normally roseate "official data" showed a declining rate of increase for
domestic grain production. According to these data the average annual rate
of increase declined from 4.8% during 1965-67 to 1.7% for 1968-71. The
reason for this decline was Peking's unwillingness to continue to underwrite
the high cost of modern agricultural development, choosing instead to
allocate state investment to military and industrial development. Since 1966
the increasingly expensive programs of developing high yield farmland have
been downgraded.10 Similarly, the Chinese preferred to import chemical
fertilizers. rather than import or develop modern complexes for domestic
manufacture -of chemical fertilizers. Peking also attempted to substitute
quantity for quality. The thousands of small locally financed fertilizer plants
that were built after 1966 turned out a flood of semi-modern inputs of
widely varying utility.
25. As for the North China Plain (see the Map, region IV-A), the
excellent 1969 and 1970 harvests of coarse grains were largely the product
of fortuitous weather and not the result of newly renovated water
conservation facilities as frequently claimed by Peking. Flooding and
waterlogging were thought to have been eliminated by the digging of a
9. Sincetre mid 1960s the normvl cloth ration has been a little more than 3 yards per person
per year in south China and about 6 yards per person per year residing in cooler areas of China.
The 1973 loth radon has been reduced from even these austere levels. The vegetable oil ration
normally fluctuates between 4 and 8 ounces per person per month.
10. Caring ',964-66, most state investment was allocated to develop irrigation and drainage facilities
on the best farmland so that a crop could be harvested should either a drought or flood occur.
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Table 4
eeopk's ferddic of China: Impocts of Grains
1%1
1%2
1%3
1964
1965
1966
1%7
1968
1%9
1970
1971
1972
19732
Jauary-December
5,476
5,004
5,489
6,605
5,912
5,585
4,133
4,364
3,906
4,632
3,026
4,844
5,716
Canada
2,264
2,009
1,483
2,075
1,600
2,568
1,084
2,173
1,729
1,967
3,013
3,882
2,450
Australia
2,574
1,229
3,002
2,225
2,800
1,307
2,859
1,591
1,848
2218
13
._.
600
Argentina
371
525
35
1,409
1,500
1,600
100
....
....
--..
.._
....
200
France
257
284
814
225
....
110
....
600
331
447
....
_...
__.
Other
10
957
155
671
12
....
90
....
....
....
...
....
3
---
United States
....
....
....
....
....
....
....
....
....
.>.
----
%2
2,466
January-June
2,650
3,170
3,591
3,901
2,762
3,073
2,591
2,800
1,692
2,317
1,578
1,517
2,916
Canada
1,134
1,374
1,053
877
800
970
877
1,162
1,085
1,186
1,565
1,517
1,600
4
Australia
1,449
1,013
1,711
1,395
1,500
693
1,524
1,038
607
1,131
13
.._
600
Argentina
30
234
....
1,127
450
1,300
100
....
....
._..
?--
....
..
France
27
....
626
128
....
110
....
600
....
....
...
Other
10
549
141
374
12
....
90
....
....
....
? .-
-- -
?-?
5
United States
....
....
....
...-
....
...
....
....
.?..
....
....
.--.
716
July-December
2,826
1,834
1,898
2,704
3,150
2,512
1,542
1,564
2,216
2,315
1,448
3,327
2,800
Canada
1,130
635
430
1,198
800
1,598
207
1,011
644
781
1,448
2,365
350
Australia
1,125
216
1,231
830
1,300
614
1,335
553
1,241
1,087
..__
.--.
---
Argentina
341
291
35
282
1,050
300
....
....
...
200
France
230
284
188
97
....
....
....
....
331
447
....
....
....
Other
....
408
14
297
....
....
._..
....
....
....
....
....
---
United States
....
...
....
....
....
....
....
....
....
....
....
9623
1,7506
1. Calendar Years.
2. Preliminary
3. Including 535,000 tons of wheat and 427,000 tons of corn. 1972 wheat tRSt in Australia
4. The contract was for 1 million tons, but delivery of 400,000 tons was postponed until January-June 1974 because of the poor
5. Including 150,000 tons of wheat and 566,000 tons of corn.
6. Including 1.0 million tons of wheat and 750,000 tons of corn.
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 Approved For Release 2006/04/19 : CIA-RDP85T00875R001700050045-6
People's Repa6iic of Cm-Imports of Cotton'
Soap
19661
1%1/62
1962/63
1963/64
1964/65
1965/66 1966/67
Thoastad Metric Toes
1%7/68
1968/69
1969170
1?70171
1971/72
1972/732
63.4
25.3
77.9
177.4
176.8
129.5 107.6
72.3
66.4
77.7
943
160.5
488.8
Tkausand Bales (480 pouads act)
Toed
Brazil
291
1
116
358
815
2
812
595
494
332
305
357
433
737
2,245
M
....
Cl)
Burma
1
5
---
2
-.
200
9
16
33
34
..-.
"
73
54
114
70
107
84
93
40
3
n
Iran
0
46
71
58
36
y
Kenya
Mexico
_.
2
....
....
....
....
...
I
IS
5
....
30
8
8
18
3
10
5
3
3
1
5
10
8
69
t2
207
21
Morocco
--
.-_
--
73
160
--?
4
12
11
5
Nigeria
-???
???.
....
9
12
7
--??
12
17
Paki!ten
75
10
59
247
118
101
140
88
102
Sudan
S
i
18
12
52
90
71
53
64
41
69
49
53
51
151
117
171
145
yr
a
T
i
61
34
78
203
203
155
90
54
64
110
73
69
170
anzan
a
T
k
3
....
11
68
54
64
60
49
25
63
50
68
70
ur
ey
U
nd
....
....
....
10
7
4
7
2
7
55
59
ga
a
U
i
d S
56
....
30
75
117
56
17
30
7
20
....
4
28
220
n
te
tates
Other
I
...
1
....
1
....
7
....
41
??.
13
5
g
--
-
4
810
1
3
Ned.
143
1. For the yea beginning 1 August.
2. Fsehmasy
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number of enormous drainage ditches across the Plain subsequent to the
1963 flood. The area under irrigation was being enlarged rapidly through
the sinking of thousands of deep wells equipped with mechanical pumps,
!n 1972 the overall deviation in prccip:tation from the long-term average
was not extreme. Nevertheless, in northern party of the Plain the
over-pumping of water during a two-week dry period in June lowered the
water table to a point where many wells became inoperative. In the southern
part of the Plain, waterlogging and flooding were encountered.
26. Beginning in Novc uber 1972, Peking took several steps to meet
these problems. The concept of the small plant churning out second-class
inputs was downgraded in the offic;al press and obviously is no longer
viewed as a panacea. Instead the regime again turned to accelerated
investment of central funds in support of industries for agriculture. The
most notable move in this area was the purchase this spring of four large
chemical fertilizer plants and four synthetic fiber plants from abroad. The
fertilizer plants are expected to increase China's uvui!ubility of nitrogen from
urea fertilizer from the current 750,000 tons to more than 2 million tons
per year when they become operational in the mid to late 1970s. By the
end of the decade, the new fiber plants should roughly double the
970 million linear meters of man-made fiber produced In 1972.
27.. A buildup of domestic capacity to manufacture high-quality
chemical fertilizer and synthetic fibers is only one facet. Pekint, is also
intensifying land utilization (multiple cropping) and introducing more
efficient crop rotations and cultivation practices.
Long-Run Prospects - A Look Ahead
28. The modern fertilizer and synthetic fiber plants purchased from
the West will not come on stream until late in the decade. In the interim,
China will have to rely on imports of agricultura! commodities to maintain
consumption, especially in years of below-normal harvests. Peking has
SECRET
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SECRET
acknowledged this. The Chinese have agreed to buy several mil ion tons
of grain annually from the Canadian and Australian Wheat Boards for the
next several years. Chinese long-range import plans are not limited to grain.
29. The diversification of Imports a~ a hedge against !nternationai
price and supply uncertainty is obviously prudent. Heretofore the Chinese
have chosen to import grain to free acreage to grow enough short-and
medium-staple cotton to fulfill minimum dr:,icstic requirements. Most
imports of cotton were long staple, primarily fo, use in textiles for export.
Because of large international stocks of grain, wl?eit was purchased cheaply
in a buyers' market. Conditions have changed. Now Peking is faced with
the unpalatable prospect of buying grain when international grain prices
are at or near record highs, world grain stocks arc the tightest in several
decades, and future supply and demand relationships, both at home and
abroad, are highly uncertain. Given these constraints. Peking seems to have
decided to grown less cotton and more grain. thereby lowering imports
of grain and increasing imports of cotton.
30. Less cotton and more grain is indeed being grown this year in
China. Almost all cotton acquired from the United States, for both short-and
long-term delivery, is cotton of rclativcly short staple and of low qup+ity -
similar to that grown in China. Clearly this grade of cotton is earmarked
for domestic consumption.
31. Peking has moved rapidly to normalize Sino?US agricultural trade.
Initially the Chinese acquired US commodities through third country
brokers and insisted that all purchases be slipped c. and f. Apparently this
method was intended to forestall any possibility of attachment by US
citizens with claims aVinst the PRC. In a major step toward normalization.
Peking recently purchased small quantities of grain, cotton, soybeans, and
soybean oil directly from US firms for f.o.b. shipment. More and much
larger transactions currently are being negotiated. Other steps toward
normalization include discussions of possible credit teens and Chinese
inquiries about the possibility of opening letters of credit through US banks.
These actions suggest that China now views the United Stites as more than
an interim supplier.
32. Binrring calamitous weather, imports undoubtedly will decline
substantially from the 1973 peak but will remain high at least through
1976, when imported chemical fertilizer and synthetic fiber complexes are
planned to come on stream. Conceivably, inputs could be concentrated to
achieve a comparatively big increase in the output of one commodity;
however, no major jump in the overall rate of increase for grain, cotton.
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soybeans, and vegetable oil will occur until much 'urger quantities of modern
inputs, especially chemical fertilizers, become available. But China';:
population and hence domestic requirements for food and fiber are also
increasing. At this stage there is no guarantee that the quantity of chemical
fertilizers and other modern inputs available after 1976 will be enough.
Thus China seems likely to remain r lucrative mark.-t for US exporters
of agricultural commodities and their foreign competitors.
SECRET
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I I)uubl, cropping rice unvl:
Major crops: Folly and late rice, swl
Minor crops: Winter crops (wheat and t
Northern limit for cultivation -
single cropping
V-A Manchurian Coarso
Grains-Soybeans
Minh crops: Willie( wheat,
solar Caine, cotton, peanuts,
w%anre, In'd coarse 1;rllnx,
Northern limit for winter IV-A Corn-Kao6iang-
1111-- tall-
wheet, also limit for multiple
cropping (three crops In
two rears) IV-,3 Millet-Corn-
Winter Wheat
Northern limit of major rice
growing regions, also limit
for two crops in one year
III?A Yangtze Rice-
Winter Wheat
Northern limit of live crops
In two rears
Mayor cruln: ('Wane I;halii s,
sc'flhlcl wheat. Cullu h. peaiIlllc,
soybeans, and sweet pnratu.,
.
Mlnut chumps' 'tobacco. buck.
HhcaI, x?utlie , lnd iibcu.
V iilanchnht.ul c cure l;haln and S1
%o)Iteml Inca:
Northern limit for three
crops In one re, (two crops
of rice and one winter crop)
I Double-crop Rice
Major crupc: ('o;usc looms,
snybc:ors, and spring wheal.
hlinot chops ('When, tobacco,
while polalocs. 11hcr crops,
,niveds. Jltl) suF;u beers.
V1 Oasc?s: ('nips Frown: Witter and spring v
art +,fl:ccd;,
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A
Major Crr,ps I)unble and single
Uop rice, sweet 110111t(10. Miller
Icl;un1cs, and rulxseed.
Malin chumps' Shlgle crop rice,
sweet pnttocs, cotton, winter
wheal, and legumes.
fshnor clops: Soyhcaus, pc;unrl5,
hemp, rapcsccd, and scsvne.
 for cultivation -
0
1, also limit
In one year
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V-A Manchorlan Coarso
Grains-Soybeans
Major chills; holy and late lice, sweet putulucs. pcnouls, sul!ar cane.
Minor clops: Winter crops (wileaf will lape), title[ clips, mid uuplcal crier.
7rml' A
Double cropplnl; rice urea:
M,ljur crops. Ur title and singic Abtjat clops: Slnl;lc crop lice,
crop lice, %wect pot:ilic%,winler cool and Miter coarse y,tuins,
Ilgunhes, and nopes'';d. winter wheat and legumes, and
taprstv'd.
Minor cnghs: Winter wheal,
sul,lr cane, cotton, peanuts, Minot crops: Soybeans, peanuts,
us:unc, and cm:lt se grants. and lobacci.
III Yarll!Ve lice, wheal arcs: Stechw:nh lice area:
Major crops: Single cnlp lice, M,tjut d'[ilrs: Single doe lice,
sweet pitalies. cothol, winter cunt, winter wheat and legunn?s,
wheat, unit k'gurtlcs, t:ilw%ced, %weet pul:ltics, and
tntlurl.
(ttinot rim's Soybean. pcacnus,
hemp, ral,c'ccc'd, and ct'sanle.
Minn) amps: Soy me.tiii, pelotas.
h,bacci, vial sull,u canc.
M.ljot cngn ('uaur gnllns,
%%-filter wheal, collnll. pcll[Ilttt,
Soybeans. and swccI pilil]ics.
Montt c'oo't Iihaccm, buck.
wheat. t'?:nrc. aild lihcn.
Major eny,s ('case gtvn%,
winter wheal, and cottii.
Minot clops: Soybeans, sweet
acid wlluc 'slab,';, legumes,
mlicccd., and i nkwhcat.
V Manclnni,n cn,use gr,nn and Sprull; wheat area
snvIvan :uca
Mapn cril,s: ('arse grains,
sushcans, :nisi spring whcut.
Maps crops: Spnul; whrlf and
coarse Erato;.
Minor crops ('ofton, Imhacco. Minor clops 0.11%. white
wilily I%11.11.W%, fiber coups, liol:u,es, i:gmnec, Ills. h:ltlev,
oilseeds, and sug,u tiects. :end srcanlc.
%i (List's, (plot,,, grown Winter mid spnug wheat. lice, cnarse gr.uns, ciltnrh,
and and crr,IR
'Iwo craps of lice ltlown ull [must
paddy [)rids, uppnishnatc nurlhcnt
Ilndt lilt the l lowing of three clips
hl inr yval,
puvsiblr to l!low live crops In Iwo
years in some areas, single clop lice
pledomin,ucs but Ow double
ctopplol! of lice Is Inctrasililt,
glowing nl winter legunu's and
rapeseed Is aho ImpotlanI,
p:uuculatly in nylon II?A.
Norlhctu Iliidt of both nl.gor Iice
glowing regions and oho I'll the
Ilatvesliug of Iwo clops in ,III- year.
Nmtihcoi land for iiiultq,le
crnppiry; aunt ahu Iol the
cultivation u) wins: wheal. Mo;l
cinlnlon Inrnl of nnrhiplt' crilyang
Is file Il'ovesuni! if filter crops
ever) Iwo gears.
hauled to au:hs where urig.luon
waec'l Ic arriiabir. Uc,rsiticrahle
Increase In the site it the area
under culhivauon lit urea[ )rats.
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