Search

 

Cablegate: Npc: Food Inflation Rural Sector's Main Concern

VZCZCXRO0071
OO RUEHCN RUEHGH RUEHVC
DE RUEHBJ #0870/01 0700941
ZNR UUUUU ZZH
O 100941Z MAR 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC IMMEDIATE 5604
INFO RUEHOO/CHINA POSTS COLLECTIVE
RUEATRS/DEPT OF TREASURY WASHDC
RUEHC/DEPT OF LABOR WASHDC
RUCPDOC/USDOC WASHDC
RUEHGV/USMISSION GENEVA 2144
RUEHFR/AMEMBASSY PARIS 4285
RUEHRC/USDA FAS WASHDC

UNCLAS SECTION 01 OF 02 BEIJING 000870

SIPDIS

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EAGR EFIN PGOV ETRD CH
SUBJECT: NPC: FOOD INFLATION RURAL SECTOR'S MAIN CONCERN

REF: (A) BEIJING 823

(B) BEIJING 750

SUMMARY
-------

1. (SBU) Ministry of Agriculture officials met the press on March 10
to discuss agricultural and rural development issues. The officials
cited China's rural development accomplishments in 2007, notably the
9.5 percent increase in rural incomes, and also outlined the
challenges ahead. Food prices and inflation, however, dominated the
press conference with journalists from the mainland and abroad
focusing on rising prices in China. Food safety also was a major
focus of th press conference. END SUMMARY.

MINISTRY OF AGRICULTURE: 2007 ACCOMPLISHMENTS
--------------------------------------------- -

2. (SB) Vice Minister of Agriculture Wei Chaoan told eporters at
the press conference that the Central Government accomplished its
agricultural and rural development goals in seven major areas in
2007:

--increased grain production for the fourth consecutive year;

--boosted rural incomes by 9.5 percent to RMB 4140 (USD (575);

--steadily developed agricultural industries, including livestock,
vegetables, oilseeds, cotton, fruit;

--improved the living conditions and quality of farmers;

--accelerated progress in agricultural science and technology,
including modernizing agricultural production;

--improved food safety and quality; and

--combated animal diseases, including avian influenza and blue ear
disease.

RURAL DEVELOPMENT PROBLEMS REMAIN
---------------------------------

3. (SBU) Wei also identified seven major challenges for rural
development, including:

--guaranteeing food supply and protecting food security;

--narrowing the urban-rural income gap, which reached 3.33 to 1 in
2007;

--strengthening agricultural technology;

--investing more capital in rural areas, particularly in rural
infrastructure;

--improving assistance for farmers' transition from agricultural to
non-agricultural work;

--protecting the environment in rural areas; and

--recovering from winter storms.

INFLATION STILL THE TOP CONCERN
-------------------------------

4. (SBU) With these general positives and negatives as a backdrop,
rising food prices and growing Consumer Price Index (CPI) inflation
were the top concern of the journalists covering the press
conference, as was the case with NDRC Chairman Ma Kai on March 6
(Ref A). Wei acknowledged that increasing rural incomes is more
important than ever before due to the rising cost pressure on poor
farmers. Wei said that although food products account for one-third
of the CPI basket, the government cannot simply say that the
increasing CPI is totally the result of rising food prices. Wei
said that rising labor and input costs, increasing consumption and
the resulting imbalance in supply and demand, and influence from
global markets all affect China's CPI. China needs to continue to
increase agricultural production, Wei said, and the Number One
Document's emphases on building up rural infrastructure and
protecting arable land will be important factors in increasing
production (Ref B).

5. (SBU) Throughout the press conference, Wei answered a barrage of
questions about food prices. A foreign journalist asked about the

BEIJING 00000870 002 OF 002


impact of rising soybean prices on China, a Macao-based journalist
inquired about the impact of winter storms on agricultural
production, and two mainland reporters asked about livestock and
vegetable prices. Wei maintained that rising prices are a threat to
China's poor population. Wei stated that the winter storms would
have a significant impact on rural incomes in southern and central
China, but the impact on grain production would be limited as those
regions primarily grow fruits and vegetables.

FOOD SAFETY CONCERNS
--------------------

6. (SBU) Not surprisingly, food safety also was a hot topic during
the press conference with a Japanese reporter asking about the
safety of China's food exports, and a domestic reporter asking about
food safety at home. Zhang Yuxiang, Director General of MOA's
Department of Marketing and Information, answered with the oft-heard
statement that China attaches great importance to food safety and
more than 99 percent of China's food exports are safe. The quality
of food at home as well as shipped abroad remains high, the
officials said.

COMMENT: FEEDING FRENZY ON INFLATION
-------------------------------------

7. (SBU) The amount of attention paid to food prices and inflation
by both domestic and foreign journalists is significant and follows
the statements of the previous week by Premier Wen Jiabao and NDRC
Chairman Ma Kai that inflation is a serious threat to China's
macroeconomic development. Questions about inflation drowned out
other possible topics at the press conference. With February CPI
statistics due to be released on March 12 in the middle of the NPC,
it is likely that inflation will attract even more attention before
the NPC session concludes on March 18.

RANDT

© Scoop Media

 
 
 
 
 
World Headlines

 

Werewolf: Gordon Campbell On North Korea, Neo-Nazism, And Milo

With a bit of luck the planet won’t be devastated by nuclear war in the next few days. US President Donald Trump will have begun to fixate on some other way to gratify his self-esteem – maybe by invading Venezuela or starting a war with Iran. More>>

Victory Declared: New Stabilisation Funding From NZ As Mosul Is Retaken

New Zealand has congratulated the Iraqi government on the successful liberation of Mosul from ISIS after a long and hard-fought campaign. More>>

Gordon Campbell: On The Current US Moves Against North Korea

If Martians visited early last week, they’d probably be scratching their heads as to why North Korea was being treated as a potential trigger for global conflict... More>>

ALSO:

Gordon Campbell: On The Lessons From Corbyn’s Campaign

Leaving partisan politics aside – and ignoring Jeremy Corbyn’s sensational election campaign for a moment – it has to be said that Britain is now really up shit creek... More>>

ALSO:

Another US Court: Fourth Circuit Rules Muslim Ban Discriminatory

ACLU: Step by step, point by point, the court laid out what has been clear from the start: The president promised to ban Muslims from the United States, and his executive orders are an attempt to do just that. More>>

ALSO:

 
 
 
 
 
 
  • Pacific.Scoop
  • Cafe Pacific
  • PMC