Farm trade deficits:No cause for concern

Consecutive farm trade deficits over the past three years has been the biggest change in the country's agricultural sector after China's entry into the World Trade Organization (WTO). The imbalance reached $4.64 billion in 2004 when the country first experienced such a deficit. The figures were trimmed downed to $1.14 billion and $670 million in 2005 and 2006.

How did this happen? Do such farm trade deficits have a big impact on the domestic farm goods market?

The emergence of a trade deficit is a natural result of China opening its agricultural sector to the outside world. China is now one of the countries with the lowest tariffs on agricultural imports. So far, the average tariff on farm products has been 15.3 percent, which is far lower than the world average of 62 percent. Also, with the rapid development of the textile, oil-fat and rubber industries, the demand for relevant agricultural raw material imports has grown substantially.