The Rise of the Middle Class and China's Future Food Deficit

The purpose of this paper is to revisit the debate on the impact of China's development at home and in the world by systematically exploring the implications of China's rapid growth of income, the structure of that income growth (or the pattern of inequality), and the competition of consumers for food and feed. Using a set of structural parameters estimated by the authors from primary and secondary data, a supply and demand modeling framework projects the future balance of China's major grain commodities, while explicitly examining the impact of the new food-feed paradigm. An upward revision of projected demand increases the potential for short-term grain deficits that could lead to abrupt price rises. The concatenation of these events will almost certainly not starve the world; but it is likely to create serious food security problems for those inside and outside China who rely on food markets and who are not in a position to pay high prices for food in the short run.