According to the National Bureau of Statistics, the country's foreign trade of agricultural products totalled US$30.59 billion - up 9.6 percent year-on-year.

The export volume of agricultural products was a particular highlight, rising to US$18.14 billion on a 12.9 percent increase over 2001.

China imported agricultural products worth US$12.44 billion last year - up 5 percent on a year-on-year basis.

Owing to the significantly increased export volume of agricultural products, the country's trade surplus in this regard climbed by 35 per cent to US$5.7 billion.

People used to worry that China's field-intensive agricultural products, which are less competitive on the global market, would be hurt by lower tariff rates and larger import quotas after the country entered the World Trade Organization (WTO).

But China's export volume of land-intensive agricultural products, including grain, oil-bearing crops, sugar and cotton, increased beyond expectations last year.

China exported 14.84 million tons of grain last year - up 69 per cent year-on-year - while its import of grain declined by 17 percent to 2.85 million tons.

The country increased its exports of wheat and corn and reduced its imports of wheat, corn and cereals. This created net exports of 11.99 million tons of grain - 6.66 million tons more than in 2001.

China's imports of oil-bearing crops, including soybeans and rapeseeds, dropped by 3.73 million tons to 11.94 million tons while exports increased by 130,000 tons to 12.1 million tons.

The trade volume of sugar and cotton rose in terms of both imports and exports.

The overwhelming advantage in price is an important reason.

The price of most agricultural products on the global market climbed dramatically between 10 to 40 per cent, as a result of reduced yields caused by natural disasters in the major export countries of agricultural products.

In contrast, supply exceeded demand on China's domestic grain market and farmers had to sell their grain products at the lowest price of the past eight years.

Moreover, the government took effective measures within WTO rules to encourage export of agricultural products, including conducting full refunds in exports of corn, wheat, rice and beans, and conducting strict tests and quarantine on imports of grain products and feed.

In addition, many of China's agricultural products such as high-quality wheat are becoming more competitive on the global market because of lower production costs.

But experts warn more efforts are needed to improve the efficiency of China's grain production, as the production cost and circulation cost of China's grain products remain generally higher than the global average.

Export markets should be more diversified as 70 per cent of China's grain products exported are currently delivered to Southeast Asian countries.

The country's exports of labour-intensive agricultural products increased, except livestock products.

The export volume of vegetables and fruits reached US$2.63 billion and US$980,000 million respectively - up 13 per cent and 23.8 per cent year-on-year.

Due to an EU (the European Union) ban on imports of animal-origin foods from China, the country's exports of livestock products dropped 3.7 per cent, reaching US$2.83 billion.

China's total exports of aquatic products rose to US$4.69 billion in 2002 - up 12 per cent year-on-year.

As a nation with rich labour resources, China's labour-intensive products have always been price-competitive on the global market. Now lower tariff rates among WTO members is further stimulating China's exports.

But the country still lags behind the world in terms of the standards of food safety testing.

Problems including excessive use of pesticides on vegetables and fruits, epidemic diseases of livestock as well as unclean butcher facilities have formed a "green trade barrier" that has struck heavy blows to China's export of agricultural products.

Three other factors also contribute to the growth of China's trade volume of agricultural products.

First is reform of national trade policies.

China cut its import tariff rate of agricultural products four times between 1992 and 1997 with the average rate falling to 21.2 per cent from 46.6 per cent previously.

Secondly, the domestic market of agricultural products has achieved balance between supply and demand in recent years. Therefore demand is no longer high for imports.

Finally, domestic exporters are able to shift to other markets when exports to traditional markets are restricted or banned.

Imports and exports of China's agricultural products are expected to grow this year.

The growth of exports will slow down as the country's average import tariff of agricultural products is reduced further from 18.1 per cent to 16.8 per cent and more import quotas are added.

Though there may be fewer exports of grain products this year, exports of aquatic products and livestock products are expected to grow continuously as the EU ban on importing these products from China is lifted gradually.

The author is an expert with the Information Centre of the National Bureau of Statistics.

(Business Weekly February 19, 2003)