Electronic Outlook Report from the Economic Research Service
China Corn Exports:
Business as Usual, Despite
A decline in China’s corn exports was expected to be a main effect of that country’s
accession to the World Trade Organization in December 2001. Instead, China’s corn
exports continued at a near-record pace during 2002. China has canceled direct export
subsidies, but other policies have replaced them, although details of these new measures
are not clear. This year’s rising international prices have given an added boost to China’s
corn export program and delayed an expected increase in China’s corn imports. In the
long run, government policies that encourage exports may prove too costly to continue,
and restructuring of China’s corn and livestock sectors may reduce the flow of exports.
Keywords: China, corn, exports, imports, subsidies, value added tax (VAT), WTO,
tariff rate quota.
Xiaohui Wang of the China National Grain and Oils Information Center provided data
and other valuable assistance in preparation of this article. The report was also improved
by comments from Ed Allen, Praveen Dixit, Joy Harwood, Linwood Hoffman, and
Francis Tuan of the Economic Research Service; Carol Goodloe of the Office of the
Chief Economist; Beth Autry and Rick O’Meara of the Foreign Agricultural Service;
Gerald Rector of the World Agricultural Outlook Board; and Mike Goettl of China
Food and Agricultural Services, Inc. Valuable editorial and production assistance were
provided by Courtney Knauth, editor, and Juanita Tibbs, designer.
China was expected to reduce its corn exports and
increase its imports after joining the World Trade
Organization (WTO) in December 2001. The country's
commitments as a WTO member required it to eliminate
export subsidies for corn and open a 5.85-million-ton
(mmt) quota for corn imports at a low 1-percent tariff.
Elimination of export subsidies was expected to make