beyondbrics

Those worrying about jobs being shipped out of Wyoming and over to Kunming can take heart. China is starting to create more jobs in ‘land-rich’ countries (like the US) in the form of fruit-pickers.

In fact, China is heading straight into a deficit – at least when it comes to the balance of trade in fruit.

The latest piece of research from StanChart’s Stephen Green explains. Despite exploding watermelons, China’s production of fruit is growing – enabling exports to increase at about 15 per cent a year since January 2009.

But China’s demand for the sweet things in life is growing much faster.  Fruit imports have been growing at a rate of 36 per cent a year over the same period. Here’s what that is doing to the balance of trade:

So while China may be the home of almost every other labour-intensive industry in the world, fruit-picking (and fruit-growing of course) is increasingly moving to countries with lots of land and water – i.e. the US and Brazil.

Land-poor China has effectively expanded its arable land by 39% by outsourcing its farming to the Americas. And given that China’s pork and chicken capacity still has a long way to grow, we expect this percentage to keep rising.

We’ve seen some of this before. China’s hunger for almonds and cashews has seen a nut rush in California. The mid-western farm belt is also feeling the drumbeat of change as traders look to meet the demands of hundreds of millions of new corn-guzzling consumers.

So if you want to buy into Chinese growth, perhaps you should be looking to the cornfields of Iowa.

Related reading:
Prices soar as China goes nuts for cashews, FT
The ‘Made in China’ myth – it’s all American, beyondbrics
China’s exploding watermelon scandal, beyondbrics
China Gives Corn Belt a Stretch, WSJ.com