The inside story of China trying to feed 1.4 billion people without American crops

This report is from CNBC’s The China Connection newsletter this week, delivering insights and analysis on the powerhouse of the world’s second-largest economy. You can subscribe here.

In recent years, it has become easier to buy food directly from farms in China.

Whether it’s a box of apples or a vacuum-sealed bag of corn on the cob, order online through popular e-commerce apps and it will take just 2-3 days to arrive in Beijing.

China’s food safety standards are still under development. But what I’ve noticed is that even if the apples at my local supermarket taste artificial, the ones I can order from the countryside taste just like the ones I’ve eaten in the United States. And I can’t say it’s just as easy to get apples shipped from a New York orchard.

The economics behind this consumer experience boils down to some key differences at the heart of the U.S.-China trade story.

During the past decade of trade tensions, the United States has repeatedly urged China to increase its purchases of American agricultural products. But many U.S. farmers lost sales under the Trump administration’s tariffs.

Soybeans are widely talked about as the United States’ largest agricultural export by value. But even there, the White House has struggled to set a deadline for new purchases of U.S. soybeans by China. China bought a record amount last year, most of it from Brazil. But the Chinese government’s ultimate goal is food security, or reducing dependence on other countries.

That’s where corn comes in.

Chinese researchers are developing a high-protein corn that could replace significant amounts of imported soybeans. Most of those soybeans are used as animal feed to support domestic meat production. Here, China has a clear goal of increasing its self-sufficiency rate. China aims to reduce the amount of soybean meal in feed to just 10% by 2030.

Notably, the Chinese government this month called for improving the quality of domestic soybeans, rather than simply increasing plantings as it called for last year. This indicates that the land is being preserved for another purpose.

Technology-driven agriculture

To address the challenges of limited agricultural land and a large rural population, the Chinese government has sought to leverage technology and targeted policies to achieve food security goals.

Despite having four times the population, China owns about three-quarters of the United States’ arable land, according to Goldman Sachs, meaning policymakers need to double yields per acre. About 34% of China’s population lives in rural areas, compared to about 20% of the U.S. population.

Most of America’s rural plains are occupied by cornfields and tractors, but if you take a similar drive through rural China, you’ll see even more mountains. And you will see far more people still cultivating the land by hand. The difference for Chinese urban consumers is that those farms are better connected to the internet and high-speed rail.

The Chinese government’s efforts to reduce rural poverty and ensure social stability have promoted infrastructure development across the country. E-commerce companies such as JD.com and Pinduoduo are expanding into new rural markets. Companies like DJI are also building businesses around agricultural drones. Last year, while riding the high-speed train from Beijing to Shanghai, I saw a drone working in a field.

High-tech company Qicaihong has gone even further, expanding from China’s Silicon Valley, Shenzhen, to a very rural region in Yunnan province, standardizing local corn production for a larger market.

Local subsidiary Shijing Agriculture Technology uses DeepSeek’s AI-inclusive sensors and software to optimize local production. Participating farmers do not have to find their own outlets, and because they farm small plots of mountain grassland, they can sell their corn to the company at a set price for unified processing before it is sold online or to large distributors.

A similar story is unfolding in northeastern Heilongjiang province, where farmers can process corn in centralized factories and sell it under the brand name “Oldjie” across the country and abroad.

It is only one aspect of regional agricultural development. China invests heavily in agricultural research and development, with public sector spending nearly twice that of the United States between 2019 and 2021.

Trina Chen, co-head of China equity research at Goldman Sachs, said China will begin commercializing the first generation of biotech seeds by 2022, increasing corn yields by 10%.

This means the country will only import 2.65 million tonnes of maize in 2025, down from a peak of around 30 million tonnes in 2022 and 2023, according to official data accessed via Wind Information.

investor interest

More capital is poised to enter China’s agricultural sector.

Last week, reports emerged that Chinese agritech giant Syngenta was attempting to go public again, this time in Hong Kong. The listing of 20% of the company will help it invest in research and development, the Financial Times reported, citing people familiar with the matter.

Syngenta’s management, which is still headquartered in Switzerland, did not respond to requests for comment.

Meanwhile, the company’s China operations are making progress in supporting domestic seed development, with 111 new varieties approved for commercial use in the country in the quarter ended October 30. Syngenta’s global reach has created an agricultural advantage that allows the company to compete overseas.

This is just one example of China’s highly complex national effort to reduce its dependence on the United States and other countries for food. But long-standing perceptions of China’s food quality won’t disappear overnight. Think of tea being grown next to a diesel blasting truck.

As an urban consumer in this country, I know that you can now order produce online and it will arrive almost as fresh as if you visited a farm.

And for American farmers facing an increasingly self-sufficient China, it may be time to start looking for new customers.

Cheng Lu, CEO of CreateAI, spoke about the company’s move to integrate AI into video game production. He added that investing in AI alone will not yield returns. Must be combined with your application.

Eric Zheng, president of AmCham Shanghai, emphasized the importance of President Trump’s early visit to China, given the possibility of a trade agreement between the two countries.

Lenny Zephyrin of Zephyrin Group said capital markets have so far been able to digest the surge in mainland Chinese companies listing through Hong Kong IPOs, and regulatory intervention has kept risks to the market to a minimum.

Phone call between Trump and Xi. U.S. and Chinese leaders discussed trade with Taiwan late last week ahead of President Trump’s highly anticipated spring visit to Beijing.

coffee war. Luckin Coffee opened its first premium drinks store in Shenzhen on Sunday, increasing pressure on Starbucks, which is selling most of its China business to Boyou Capital.

EV struggles. BYD and other major Chinese electric vehicle companies saw sales decline in January from December as demand continued to slump.

While most Asian markets rose, Chinese and Hong Kong stocks were mixed in afternoon trading on Wednesday, as investors appeared to shake off concerns about artificial intelligence putting pressure on U.S. benchmarks.

Hong Kong’s Hang Seng Index rose 0.43%, while the mainland’s CSI300 index fell 0.11%. Technology and electric vehicle stocks led the city’s gains. Xiaomi rose 4.72%, BYD rose 3.86%, and Li Auto rose 3.23%.

Year-to-date, the Hang Seng Index has increased by 6.51%, and the CSI300 Index has increased by about 1.9%. China’s benchmark 10-year government bond yield fell to 1.8%, but the offshore yuan was little changed at 6.9088 against the dollar.

— Nur Hikma MD Ali