Alexandria, Virginia
December 18,  2001

China’s entry into the World Trade Organization (WTO) will enhance trade and business opportunities between the U.S. and Chinese seed sectors, noted Chinese agriculture specialists at the American Seed Trade Association’s (ASTA’s) Corn & Sorghum and Soybean Seed Research Conferences on Dec. 5 in Chicago. Import tariffs will be reduced and limitations on foreign investors removed, creating a more favorable business climate for U.S. seed companies in China.

Song Xunfeng, editor of the Chinese and Foreign Seed Industry edition of China Farmers’ Daily,* predicted that joint U.S.-Chinese ventures in the seed sector will double or triple in the next three years as a result of the upcoming changes in China’s trade policies. He also predicted increased seed trade between the two countries, namely increased imports of U.S. field crop seeds in China and exports of Chinese vegetable and flower seeds.

“China’s WTO agreement will enhance both the U.S. and Chinese seed sectors,” said Xunfeng through translator Wiejun Zhao, Ph.D., professor of international agriculture at Michigan State University. “China will gain access to land-intensive products, such as vegetable oils and field crop seeds, due to its limited farming space and the United States will benefit from Chinese imports of labor-intensive products, such as horticultural and vegetable seeds.”

The Chinese government currently has a complex system of tariffs, quotas and subsidies that favors low-quality, Chinese-produced seed. Xunfeng noted that this system is changing to encourage the import of high-quality seed, eliminating import tariffs, quotas, and subsidization of Chinese seed exports. Effective immediately, China will allow tariff-free imports of rice, wheat, corn, soybean, and vegetable oil seeds. U.S. cotton seed is already significantly imported.

Xunfeng noted that China uses 7 billion kilograms of seed annually, half of which is commercially produced by predominantly government-owned companies. Less than 10 percent of the commercial seed is high quality, which gives “a 90 percent opportunity” for U.S. seed companies to contribute to the improvement of the Chinese seed sector. While China’s seed trade has increased in recent years, only 5 percent of its seed supply is imported.

“There are millions of farmers in China who could benefit from imported seed with desirable traits,” Xunfeng said. “They should have the option of buying high quality seed from anywhere in the world.”

A new Chinese seed law effective this year states that national seed companies that do not meet a minimum asset requirement of $60,000 will be subject to bankruptcy next year.

This will encourage foreign investment, private enterprise, and competition in China’s seed sector. Beyond eliminating limitations on foreign ownership of Chinese companies, China is developing incentives to attract foreign investors to its seed industry.

“The ‘new’ Chinese government will encourage foreign investment and cooperation in its seed industry,” Xunfeng said. “We are interested in acquiring new seed varieties, technology, and management practices. We want to be able to adopt these assets to our agricultural sector
to boost our exports and competitiveness in the world marketplace.”

Through a joint agreement with the Farmers’ Daily, ASTA is helping to inform the Chinese agriculture officials about the U.S. seed sector, including the value of intellectual property rights and new technologies. It encourages U.S. seed companies to explore opportunities in China.

The China Farmers’ Daily is the Peoples Republic of China’s preeminent agricultural newspaper. It is an official government publication, widely distributed to business people, farmers, and top-level government ministers.

Founded in 1883, ASTA, located in Alexandria, Va., is one of the oldest trade organizations in the United States. Its membership consists of about 850 companies involved in seed production and distribution, plant breeding, and related industries in North America. As an authority on plant germplasm, ASTA advocates science and policy issues of industry importance. Its mission is to enhance the development and free movement of quality seed worldwide.

ASTA news release
N4058