International communities have long recognized China's success in producing enough food to feed its large population. Growth in agriculture provided the foundation for the successful transformation of China's reform economy (McMillan and Naughton, 1991; Perkins, 1992). Unlike in Eastern Europe and the Former Soviet States, where agricultural output fell by more than 50 percent in the first years after the reforms, the growth rate of agriculture in China exceeded 7% per year for the first six years of the reforms (1979-84 Table 1). Although growth has slowed recently, output has been rising since 1985. But the slow-down in growth has some economists worried about the long-term implications of a weak agricultural sector for healthy economic development. The contribution of the agricultural sector to gross domestic product (GDP) declined significantly during the reform period and was down to only 19% in 1998.
In contrast to the decline of the agricultural sector as a whole, China's fishery sub-sector is keeping pace with overall economic growth. It is meeting the country's increased need for fish, as changes in consumption patterns indicate, and is contributing to a higher standard of living for Chinese people. Expansions in aquaculture and increased productivity have contributed to the rapid growth of the fishery sector and its share in total aquatic production has been rising. As a result, income and employment in rural areas, major concerns lately for policy-makers in China, have advanced.
China is the largest producer of aquatic products in the world. Its aquatic production reached 39.1 million t in 1995 (SSB, 1999) (Note, however, that China's official production statistics for aquatic products are likely to be quite overstated compared to actual survey data on per caput consumption. This issue is addressed in the next section of this paper). With the rapid growth of the country's economy, consumption of aquatic products has been rising over time. China has great potential for continued high growth in aquaculture and for making a substantial contribution to the national economy. Per caput consumption of aquatic products is still low, despite its impressive growth in the past. A large part of the suitable water area is underdeveloped. Future development and growth in aquaculture will have to rely on reforms in the rural sector.
However, the rapid expansion of areas under aquaculture, particularly in major grain-producing regions, raises concerns about the sector's competition for land used for raising crops and China's ability to achieve higher levels of grain self-sufficiency. Recent projections for China's food economy indicate that the country's domestic demand for grain will remain strong, primarily as a result of the fast rising demand for feed. Projected increases in feed demand by 2020 range from double to even triple the amounts of the early 1990s (Brown, 1994; Rosegrant et al., 1995; Fan and Agcaoili, 1997; DRC, 1998; Huang, 1998; Huang et al., 1999; Huang and Chen, 1999). Increases in income, urbanization and market development are major factors driving the demand for animal products, thus stimulating the need for feed grain (Huang and Bouis, 1995; Huang et al., 1999).
China's emergence as a modern country raises many questions. What are the sources of growth in agriculture in general and in aquaculture in particular? What are the demands for aquatic products, and how will consumption patterns change over time? What will be the likely sources of needed growth? If China's demand for food exceeds supply, how will the country confront its food shortage? What are the prospects for expansion of aquaculture and production?
Answers to these questions are by no means clear. Some economists claim that with growing domestic demand for aquatic products in coming decades, production of aquatic foods will increase accordingly. China could even increase its export of aquatic products, if it joined the World Trade Organization (WTO) and enjoyed liberalization of its trade in the near future (Wang, 1997; DRC, 1998; Huang and Chen, 1999; Huang, 1999). Other economists believe that the expansion of aquatic production will be limited due to the increase in the cost of land and the government's policy on grain self-sufficiency. These important issues deserve close attention by researchers and policy-makers.
Few people have paid attention to the fact that China has become the top producing and consuming country of fishery and aquaculture products in the world in a relatively short period of time. A comprehensive review of China's aquaculture economy is needed to provide domestic policy-makers and international donors with a better understanding of the sector. It should include sources of previous growth in supply and demand, factors affecting future consumption and production, and constraints that may keep China from meeting its food security commitments.
Given the scope of this study, the results presented in this report are just a first step in meeting the ambitious goals set above. Specifically, this study is designed to:
The paper is structured as follows. Section 2 presents an overview of the structural changes in China's economy and looks at the growth of production in aquaculture in the past. Section 3 analyses current government policies and reforms adopted in the sector. Section 4 examines the changing consumption patterns of aquatic products over time and across regions. Concluding remarks and issues needing further investigations are summarized in the last section.
