Interpreting Chinese Grain Consumption Statistics

The level of grain consumption per head is by far the most important indicator of human welfare in China. It is therefore not surprising that the provision of food grain dominates official discussions of economic policy. Since 1978 the demand for grain has been raised significantly by the acceleration of incomes, following 20 years of stagnation, although the effect of this has been mitigated by the decline in the rate of growth of population, from 2·4 per cent per year (1970–74) to 1·2 per cent (1978–80). The demand for grain for direct consumption has not yet reached saturation in most parts of China and consumption rises with income per head. The demand for fine grain (rice, wheat and soya) is more income elastic than that for coarse grain such as millet, maize and especially sweet potatoes. In addition, the Chinese people are pressing to improve their diet by consuming more livestock products, the production of which requires large quantities of grain. In spite of the fact that grain is rationed, restricted “demand” as laid down by the Government cannot be met from domestic production and China is a large grain importer. Accurate estimates of food grain consumption are thus essential if we are to assess correctly the current state of the Chinese economy and its future trends.