Let's start by asking a question. How much is a pound of flour and how much is a pound of rice now? What will happen to the Chinese economy if prices double or triple?
According to the United Nations, in 2021 and 2022, due to the impact of climate, the epidemic and the global supply chain is not smooth, the global food shortage will be larger.
International food prices have soared. The international indicator of wheat prices, the Chicago futures price, has risen from about 480 cents/bushel (about 2.243 yuan/ catty) at the beginning of the epidemic in 2020 to about 809 cents / bushel (about 3.76 yuan / catty) at the beginning of the epidemic, and the price has risen by nearly 70%.
At the same time, coupled with the high freight rate, the customs price of U.S. wheat at the port of entry into China has approached, or even exceeded, the price of China's domestic wheat. Compared with 2020, the number of wheat imports from China in 2021 has already fallen off a cliff.
For the modern economy, in addition to oil, it is food. If China suffers from a reduction in grain production and insufficient supply in the context of global food shortages and soaring grain prices, what will happen to China's economy and inflation?
Therefore, in 2020, China has suffered from epidemics and floods in the south; in 2021, Henan and Shanxi have suffered heavy rains, and the south has experienced natural disasters such as high temperature and little rainfall, typhoons, etc., leading to large-scale reductions in grain production. The increase in grain production in the northeast has stabilized the national grain market.
According to the latest national grain data released by the National Bureau of Statistics, the total national grain output in 2021 was 1,365.7 billion kilograms, an increase of 26.7 billion kilograms over the previous year, an increase of 2.0%. Among them, 70.3% of the 26.7 billion kilograms of grain production increased came from the three northeastern provinces and Inner Mongolia.
According to the National Bureau of Statistics, grain production in the four provinces of Northeast China and Inner Mongolia already accounts for 26.8% of the country's grain production. The grain in Heilongjiang Province alone is close to the sum of Jiangsu, Hunan and Guangdong provinces.
It used to be said that "the lake is widely ripe, the world is enough" and "the grain in the south is transported to the north". It is high time for us to change our minds. China's grain pattern has changed to "bumper harvest in the northeast and stability in the whole country" and "grain in the north and grain in the south".
As the country's main grain producing province, heilongjiang has achieved a 4.3 percent increase in grain production, and the entire three northeastern provinces and Inner Mongolia have increased grain production by a total of 5.4 percent, in the case of Henan's 4.31 percent reduction in grain production this year, Anhui's increase in grain production by only 1.71 percent, and Shandong's increase in grain production by only 0.99 percent.
More importantly, northeast China, as China's most important commodity grain production base, can be transferred to the whole country and directly supply the grain market with the highest proportion. The grain commodity rate in the northeast is 35.2%, of which the grain commodity rate of the state-run farms in the northeast is as high as 60%, which is almost 2 to 3 times that of other major grain-producing areas.
In addition to a small amount of local consumption of grain in the northeast, a large amount of grain can be directly supplied to the market and the price of grain can be stabilized.
During the epidemic in Wuhan alone, according to data from the Shenyang Bureau of China Railway, the northeast region rushed about 7 million tons of grain to the south in 1 month and 14 days, equivalent to an average of nearly 10 catties of grain per person in the country.
Whether from the total supply or the strength of supply security, the northeast has undoubtedly provoked the beam of China's food security.
So don't underestimate the Northeast! Compared with finance, real estate, high-tech, and GDP growth, the northeast is actually the "ballast stone" and "fixed star" for China's stable and rapid economic development.
Even from the perspective of market competition itself, the grain economy in Northeast China has incomparable advantages and important positions.
From the perspective of yield, the grain production per hectare in the three northeastern provinces (Heijiliao) reached 5406.94 kg, 7060.1 kg and 7164.4 kg respectively. The unit output of grain in the northeast is not less than that of the Huguang region, where it is cooked twice a year or even three times a year.
In 2021, due to the heavy rainfall and high accumulated temperature in the north, the three northeastern provinces achieved a bumper harvest of 4.33%, 6.21% and 8.54% respectively in the absence of a significant increase in the area sown to grain, which was much higher than the level of the national average grain production increase of 2%.
The natural conditions of agriculture in the northeast are unique. In addition, the northeast and the central plains, Jianghuai, Jianghan and other major grain-producing areas have formed a geographical and climatic complementarity and risk hedging mechanism. Whether it is floods or droughts, China's food security can always be guaranteed by overall stability.
In addition, due to the vast area and sparse population in the northeast, especially the Songnen Plain and the Sanjiang Plain, they are very suitable for large-scale modernization and large-scale agricultural development. The grain cultivation area in Heilongjiang Province alone reached 14,500 hectares, close to the sum of Hunan, Hubei and Jiangsu provinces.
On farms in the dryland area of Heilongjiang, the average farmland of farmers who remain in the countryside to cultivate land is 100 to 150 mu. The area of a piece of land is generally 500 to 600 acres. Compared with the fragmented arable land distribution in the south and the production organization form of one household per household, the agricultural production in the northeast is much better than that in the south in terms of technical level and socialization.
For example, in the southern countryside, an agricultural service center usually has only about 5 to 6 people, and it is difficult to provide substantial agricultural production services to farmers in addition to coping with and handling administrative affairs. The farms in Heilongjiang have a professional agricultural management team of about 200 to 300 people, managing 20,000 to 30,000 hectares of arable land, and some farms even reach as many as 3,000 people.
In the northeast of the farm, whether it is agricultural machinery, agricultural tools, or seeds, fertilizers, pesticides, as well as soil analysis, weather forecasting, etc., there are professional management. This makes the unit grain yield of farms in the northeast nearly 35 percent higher than the national average.
If the grain market also adopts a complete market competition mechanism, then the grain industry in the northeast will undoubtedly have an incomparable competitive advantage.
Just as mechanized agriculture in the United States "leads" the global grain market, so agriculture in northeast China, especially grain production, has great potential.
However, China has long adopted the practice of lowering the prices of grain and raw materials to improve the profitability of industrial products and enhance the export competitiveness of industrial products.
Through the "scissors difference" between workers and peasants, the price of domestic and export products is inverted, although the original accumulation of capital can be quickly realized, foreign exchange reserves can be increased, and the process of urbanization can be promoted, but it also restricts the release of China's endogenous economic power and demand.
This practice once led to the decline of rural China, especially agriculture in the northeast.
With the collapse of heavy industry, the loss of light industry, and the policy constraints of agriculture, forestry, and mining, the northeast economy gradually began to lag behind the whole country.
On the one hand, the vast and sparsely populated northeast is difficult to form a demographic dividend, and it is difficult to support light industry and support the benign development of the consumer goods market through agricultural accumulation.
On the other hand, the northeast lacks the support of the foreign trade economy. Compared with relying on Hong Kong businessmen, Taiwan businessmen and overseas Chinese businessmen to start, the southern coastal areas that have a tradition of maritime trade since ancient times lack both modern commercial awareness and "overseas relations".
Endogenous economic growth and external economic dynamics are all bound, and the northeast economy is like a person trapped in his hands, which is suddenly thrown into the "big tide" of the market economy.
However, do not underestimate the northeast.
What will happen to the northeast when China's economy gradually transitions from the stage of primitive capital accumulation to the stage of high-quality development, from the foreign trade-oriented economy to the "internal circulation", and from the priority of efficiency to "common prosperity"?
Taking grain production as an example, from a domestic point of view, as the government begins to increase investment in rural areas and agriculture, increase subsidies for grain, and gradually increase the prices of agricultural products and natural resources, just as Japan and South Korea vigorously support and protect indigenous agriculture, the agricultural advantages of the northeast will be brought into play.
From an international point of view, once the global supply chain is difficult to solve, the Us-style agriculture based on petroleum, chemical industry, and government subsidies is in a long-term predicament, there is a shortage in the international grain market, and it is difficult for international grain prices to decline, then the status of the northeast as a national food security and even the "fixed star" of the entire economy will be further highlighted.
With the change of the general environment, as the production base of China's grain, energy, chemical industry, minerals, forestry and heavy equipment, the northeast economy will be restarted and gradually enter a virtuous circle.