Agri-tech Business Opportunities in China

With its vast population and limited arable land, agriculture continues to be a critical sector for China’s economy and food security. As a result, China will continue to increase its agricultural innovation for many years to come.

The 20th National Congress of the Communist Party of China clearly stated its strategic goal was to accelerate the construction of a strong agricultural country. Recently, China has issued various agricultural policies and strategies to promote the development of the agricultural sector and increase food security, such as China’s Green Development in the New Era, presenting a positive outlook towards agricultural technology development.

This article aims to provide an overview of the agricultural technology sector in China by highlighting the policies and strategies that were issued in 2023 to promote its growth and presenting data on China’s agricultural development in 2022. It also focuses on China and the UK’s recent science and technology innovations in agri-tech and potential business opportunities in China for UK companies.

China’s 2023 policies and strategies on agriculture

China has issued its “No. 1 central document” for 2023, which outlines nine tasks to promote rural vitalisation, including stabilising production and ensuring the supply of agricultural products, boosting infrastructure construction, supporting agricultural science and technology, and promoting the high-quality development of rural industries. As the first policy statement released by China’s central authorities each year, this document is a signal of policy priorities, and for the past 20 years agriculture and rural development have been at the top of the priority list.

In January 2023, the Chinese government released a white paper titled “China’s Green Development in the New Era,” which shows China’s commitment to promoting green development and sustainable practices in various aspects of its economy, primarily in industry, energy, and agriculture. The country is making significant efforts to reduce its carbon emissions, promote the use of renewable energy sources, and cooperate with the international community to address global environmental challenges.

The circular issued by the state council on 18 January calls on concerned departments and regional authorities to provide more support for R&D centres, especially in the areas of basic research and the use of large scientific research instruments, scientific and technological reports, and related data from major national science and technology programs. The Chinese government is encouraging innovation and technology development in the country by attracting foreign investment and expertise and providing support for R&D centres and new foreign-invested institutions.

On 3 February, the Ministry of Agriculture and Rural Affairs issued the “Implementation Opinions of the Ministry of Agriculture and Rural Affairs on Implementing the Party Central Committee and the State Council’s 2023 Plans for Comprehensively Promoting the Key Tasks of Rural Revitalisation”, in which they call for rigorous development of modern agricultural facilities, strengthening of agricultural technology and equipment support, promotion of the development of smart agriculture and digital villages, and expansion of effective investment in agriculture and rural areas.

The Ministry of Agriculture and Rural Affairs in China has also promised to increase the number of pilot projects for the industrialisation of genetically modified (GM) corn and soybeans. This move is seen as an important step towards legalising GM crops in China, which is the world’s second-largest economy, and aims to improve its food security. The statement emphasises the need to speed up advancements in key agricultural technologies and to expand the areas where soybeans are grown.

These policies and strategies indicate that China will continue to prioritise the development and modernisation of its rural areas and provide various government support to further promote green development and sustainable practices, improve food security, and speed up advancements in agricultural technologies.

China’s agricultural development in 2022

According to the agricultural data of the National Bureau of Statistics of China, the total output of grain in 2022 was 686.53 million tons, an increase of 3.68 million tons from the previous year, up by 0.5%, indicating a steady progress in agriculture and grain output.

The data from the National Bureau of Statistics of China shows that in 2022, the number of farmlands newly equipped with irrigation systems was 0.78 million hectares and that 1.61 million hectares of farmland was newly equipped with water-saving irrigation systems. It indicates that in 2022, China continued to invest in and prioritise the improvement of irrigation systems and the adoption of water-saving technologies in agriculture.

The data also shows that in 2022, the sown area of oil-bearing crops was 13.14 million hectares, an increase of 0.04 million hectares. The sown area of sugar crops was 1.47 million hectares, an increase of 0.01 million hectares. However the sown area of soybean was 10.24 million hectares, an impressive increase of 1.83 million hectares – indicating a shift in agricultural production towards soybean. Despite the decrease in sown area for some crops, the total output of grain increased slightly – its total in 202 was 118.33 million hectares, an overall increase of 0.7 million hectares compared with 2021 – indicating that agri-tech is developing and productivity of the land is improving.

The price of important agricultural materials has risen significantly. For instance, the price of corn is at a historical high of 3,010 yuan/ton, an increase of over 10% from its 2022 starting price of 2,734.71 yuan/ton. The prices of other major raw materials are also higher than they were in 2021, which has led to a year-on-year increase in the ex-factory prices of compound feed and concentrated feed products. The price of soybean meal has also continued to rise; in February 2022, the opening price of soybean meal futures exceeded 4,000 yuan/ton.

The green development of agriculture in China has achieved remarkable results. The supply capacity of high-quality agricultural products has been continuously enhanced, with a pass rate of over 97.6% for product quality and safety monitoring of over 63,000 green, organic, and geographical indication agricultural products. The environmental protection effect of agricultural production areas has also been significant, with high rates of crop straw and agricultural film utilisation, livestock and poultry manure recycling, and safe utilisation of polluted cultivated land. The use of chemical fertilisers and pesticides has decreased for six consecutive years, and the coverage of green prevention and control of major crop diseases and insect pests has reached 46%.

China’s recent innovation and strengths in agricultural science and technology

China is investing heavily in scientific and technological innovation to improve its agricultural sector and food security. Researchers have developed a highly efficient method of synthesising artificial starch and microbial proteins from corn stalks, which could reduce production costs and create new opportunities for food production. The Chinese Academy of Agricultural Sciences (CAAS) plans to focus on six fields, including seed research and development, agricultural machinery, and green agriculture, while the government is promoting the use of robotics in 10 industries, including agriculture, because of the first population decline in six decades. China has set a goal to develop and implement more than 100 innovative robotics applications and over 200 model use cases to establish the country as a leading power in the global robotics industry by 2025. In addition, CAAS has signed agreements with global partners to share knowledge and is seeking to establish a Global Agricultural Science and Technology Innovation Alliance to improve food security.

British agri-tech development and business potentials in China

The UK’s agricultural science and technology sector has witnessed significant developments in recent years. Notably, the LEAF and Co-op Foundation’s Carbon Innovation Fund are launching the first net-zero leaf demonstration farms in the UK and South Africa, which will inspire and train other farmers to transition to net-zero carbon. XAG Agricultural Drones have become the first company to receive operational authorisation from CAA allowing them to use drones for agriculture in the UK, whilst also leading the way in automation and AI achieving net-zero goals. Meanwhile in Scotland, Scientists at the James Hutton Institute have developed potato varieties resistant to pests and suitable for growth, which ensures a sustainable seed potato sector and food security. In line with this, the Pest Genome Initiative has created a public database of 19 insect genomes to accelerate the development of novel pest control methods and create more nature-friendly crop protection. Finally, the first-ever field trial of gene-edited wheat in Europe has resulted in a significant reduction of acrylamide, a potential carcinogen, when the flour is baked.

China and the UK are making remarkable strides in agricultural science and technology innovation, providing excellent opportunities for UK agri-tech companies to collaborate with Chinese companies and contribute to the improvement of agri-tech innovation and development. The Chinese government has issued policies and strategies to promote rural vitalisation, support agricultural science and technology, and promote the high-quality development of rural industries. As a result, investors should consider investing in agri-tech in China to take advantage of these policies and strategies.

Furthermore, there is a growing trend towards environmentally friendly and sustainable farming practices in China, presenting an opportunity for UK agri-tech companies to provide solutions to meet these demands. For instance, companies specialising in precision agriculture, sustainable farming, robotics application, and renewable energy could find a receptive market in China.

On the one hand, China’s agricultural market is vast and growing rapidly, with a large population and an increasing demand for high-quality food products. On the other hand, the arable land in China is limited and it is becoming inefficient to use young labourers in agricultural fields. China’s agriculture output heavily depends on the adoption of agri-tech innovation. Therefore, agri-tech companies should focus on developing technologies that improve irrigation systems, increase productivity of the land, and improve crop yields. The British agricultural technology innovation and developments, such as the legalisation of drone spraying and spreading on farms, and the discovery of potato varieties that can resist disease, have created opportunities for collaboration between British and Chinese agri-tech companies to improve the agricultural output and quality in China.

There is enormous potential for UK agri-tech companies to collaborate with Chinese partners on research and development, share knowledge and resources, and further improve agri-tech innovation, such as genetic modification and crop improvement. This could involve joint ventures, technology licensing agreements, or other forms of partnership.

A free promotional opportunity for British agri-tech companies to introduce and develop business in the Chinese market

The International Technology Transfer Network (ITTN) is organising the 2023 ZGC International Technology Trade Fair, which aims to strengthen the exchange of knowledge, talent, and skills between innovative companies, academics, and government representatives in China. Zhongguancun, where the fair will take place, is considered one of the most important high-tech industrial development zones in China, hosting over 10,000 technology companies and research centres, including over half of the country’s unicorn start-ups.

Crayfish.io is acting on behalf of ITTN and inviting agri-tech companies from the UK to be selected and featured for free in the “China-Britain Cooperation in Modern Agriculture Innovation” session which will take place on May 29th as part of the 2023 ZGC Forum. The event’s audience will be a combination of leading agriculture and agri-tech companies, investors, central and regional government officials, and others from the innovation ecosystem in China. It is a great opportunity for agri-tech companies from the UK to introduce and develop their businesses in the Chinese market.

There are only two spaces available for this promotional opportunity. If you would like to apply or simply hear more about this opportunity, please contact hello@crayfish.io to register your interest. Crayfish.io will then get in touch with more details about the event.

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