According to the soybean action plan, northeast China's Heilongjiang province will build a soybean quality improvement station, a seed growing farm, and a production base of 660 thousand hectares in three to five years' time. The action plan is designed to cope with the severe challenge that is facing China's soybean industry.

A national survey shows that, of the prices of staples such as rice, wheat, and corn, soybean was the only one that saw a price decline last year. Moreover, there is an oversupply of soybeans in China's major soybean growing areas.

Why is this? The answer is quite simple. The cost of soybean in the United States is about half of the price of that grown in northeast China. Moreover, American soybean is also better in terms of quality. When pressed to extract oil, American soybean produces 20 percent oil, compared with only 17 percent for domestic soybean.

What's the way out? The fact that China is a WTO member excludes the possibility of building trade barriers. In fact, the low 3% duty on soybean imports that China imposed this year has given easy access for foreign soybeans.

So the only solution is to enhance the quality of domestic soybeans and to produce them in an industrialized efficient way. Under the action plan, over 100 million yuan, or US$12 million, has been channeled to build soybean breeding and processing centres and to upgrade the machines used for soybean growing and harvesting.

Can Chinese Soybean Survive the Fierce Competition?

With a relative low cost and therefore lower price, genetically modified or GM soybeans account for a major part of the soybeans imported to China, where traditional Non-GM soybeans dominate the country's output.

The Jiusan Oil Group in northeast China's Heilongjiang Province, by first sticking a Non-GM label on its products, is trying to seize the advantage in market competition. General Manager Tian Renli from the Jiusan Oil Group says this is based on the understanding that natually-produced soybeans are the safest.

Tian Renli said there is no final conclusion yet which can prove that GM food won't harm people's health.

He says that some developed societies like Japan and EU countries are scrupulous about the import of GM food. And now China is demanding that the GM content is shown on the label of food products. This will give consumers the right whether or not to buy GM or Non-GM food. Tian Renli believes that people are still not confident about GM food so the promotion of Non-GM soybeans will increase the competitiveness of domestic soybeans.

However, a researcher from the Chinese Academy of Sciences, Zhu Zhen says this is not the best choice in the long run.

Zhu Zhen says he has doubts about using non GM food as a barrier to protect domestic farm products.

Firmly believing in the safety and potential of marketing GM food Zhu Zhen says that largely promoting Non-GM soybean is only a temporary method in international trade. Only through reducing costs and improving quality can Chinese soybeans survive in the future.

He says the major problem of Chinese soybean production lies in the seed cultivation. There is not a specific objective in the cultivating process, such as on oil content which has made our product less competitive.

He also says the transportation from the farm to the market needs to be simplified to cut cost of the product.

( April 12, 2002)