Can China Feed Itself： A Study on China’s Grain Demand Forecasting
Date Issued
2007
Date
2007
Author(s)
Cheing, Mei
DOI
zh-TW
Abstract
As the coming of the 21st centuries, China is becoming a dominating country in the world; hence, there are many predictions about China's future--"the collapsing of China", "the threatening of China" and "the rising of China". China-related issues have been closely studied worldwide. All kinds of reports provided by different Officials, institutes and private researches can be found. Some of them are predicting that the increase of Chinese population may destroy its ecological equilibrium and China will suffer from famine. as a result, the whole world will be affected.
According to China's history, the ample staple food supply has a significant political implication－it is a necessity to governing the country well. If the providing of staple food is well secured, a basis for a prosperous China is promised.
This study focuses on observing the trend of China’s staple food demand, and further offer to a reasonable prediction.
The models used are：GARCH model, Co-integration model, and forecasting process. The Co-integration model may have a non-linear effect； hence, this study uses both Linear and Non-linear approaches in the Co－integration models. The data used in the study are from the Food and Agriculture Organization (U.N.), 1961－2004. The variables are：Average consumer quantity of major grain, average price of grain, and average income.
The empirical results are summarized as follow：
Firstly, in the first two periods, the declining of consuming quantity on grain will cause the increase of grain price. The farmer could even hold down his sales. This is due to the commodity price a rise but the grain price doesn't go up as well. Since the price of grain keeps unchanged, the costs on equipment and labor are increasing.
Secondly, in this study, China's staple food demand is offered to have both long-term and short-term stability, and it fits the "best linear unbiased estimator (BLUE)", goodness of fit , hence it is predictable and has long-term developing co-relation--the rise of food consumption causes the rise of food price and the increase of food consumption stimulate the increase of income.
Third, many studies on this topic have been made from the supply-side. Most of the investigated periods are within 5-20. However, the Chinese data before China's "reform" are usually fragmentary, inconsistent and incompleteness. This study overcomes many limitations and obstacles, probe into this topic from the demand-side, in an effort to make it a rare one.
Fourth, China's data of the earlier years' can be obtained from database of FAOSTAT. Obviously, it has better credibility and is more comprehensive. It's a pity that it only represents the country's total supply, but the differences between rural vs. urban, poor vs. well-off are not included. What we can conclude from the data is：Over the years, the Chinese' dietary habit has changed significantly.
Fifth, according to this investigation, all the indexes are aiming to the same direction：China is having a good opportunity, and is not "developing to perishing". However, this topic deserves follow up and further investigation.
Finally, this study investigates the sensitiveness of China's staple food demand and observes the price of World staple food as well, then, examines Taiwan agriculture's developing opportunities and provides some recommendations.
Subjects
糧食需求共整合模型
糧食需求預測線性模型
糧食需求非線性模型
GARCH module
Co-integration module
Non-linear module
the rising of China
Type
thesis
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