Speaking in front of his own agricultural representatives, Trump made a big promise that China would purchase at least $40 billion worth of soybeans in the future. As soon as he finished speaking, Goldman Sachs released a major report, revealing that China had kept a key contingency plan and also set a time frame.
Trump
Since the US-China trade agreement was reached, bilateral relations have significantly eased, with senior US officials repeatedly confirming that the US-China agreement is being implemented systematically. Of course, Trump, as usual, occasionally makes some "unconfirmed" boasts, trying to prove that Sino-US relations are "really good."
Three days ago, Trump made a big promise in front of his own agricultural representatives that China might purchase soybeans worth more than $40 billion, and the actual purchase volume could even be higher than this number. This news served as a strong stimulant, temporarily cheering the American agricultural states suffering from inventory accumulation and falling prices.
However, before the words were even out, a report from the top Wall Street investment bank Goldman Sachs came like a bucket of cold water, revealing an entirely different future scenario. The report pointed out that in order to safeguard the fundamental national food security, China is planning to cut its total soybean imports by two-thirds over the next decade.
Soybeans
The report stated that China has recently reaffirmed its determination to boost the economy, mainly relying on domestic demand, and is committed to building a strong domestic market to cope with external challenges. Currently, China consumes about 60% of the global soybean trade volume, and this high level of external dependence is seen as a significant potential risk to national security.
During the 2018 trade war, Chinese society had already deeply felt the threat of "disruption" in critical agricultural supply chains. Therefore, "reducing external dependence" became the top strategic priority. Cutting the total import volume aims to fundamentally and systematically resolve the "choke point" risks. The core path for China is twofold, "expanding sources" and "reducing consumption" simultaneously.
Animal feed
On one hand, China is increasing the planting area and output of domestic soybeans through policy support and technological research and development, while expanding new supply sources such as Russia and Africa, achieving diversified import channels. The report shows that China is increasingly focusing on food security issues, and the gap in arable land is constantly narrowing.
On the other hand, China is fully promoting the "reduction of soybean meal in animal feed" initiative. By developing and promoting low-protein feed formulas, reducing the soybean content in animal feed, improving feed conversion rates, and actively developing alternative protein sources, rapeseed meal, cottonseed meal, and even insect protein have entered practical stages. Under the premise of not affecting the development of the breeding industry, reduce soybean consumption from the demand side.
Chinese farmers growing soybeans
Under overall control, China has the ability to achieve a reduction of two-thirds within ten years. The biggest mistake of the Trump team was viewing China's soybean purchases as a "negotiable trade commodity," but ignoring the "top priority" status of food security in our country. In the short term, Sino-US soybean trade may continue normally, but the day of "rupture" will eventually come.
For China, the plan to reduce soybean imports by two-thirds within ten years is not to "isolate itself from the world," but to build a "self-controlled, safe, and efficient" supply chain. After all, when it comes to the core interest of food security, China will not make any concessions for any political slogans. The United States needs to understand that "bullying" can only bring temporary concessions, not permanent peace.
Original: toutiao.com/article/7582882766304346670/
Statement: This article represents the views of the author himself.