Forecast for Rural China Seen from Transiting Czech Republic - 中欧社会论坛 - China Europa Forum

Forecast for Rural China Seen from Transiting Czech Republic

Authors: Zdenek Linhart

Date: 2007

Published by Czech University of Life Sciences Praha, Agentura Agropro co-operative

I. Identification

Country: Czech Republic

Autor of the Record: Zdenek Linhart

Institution: Czech University of Life Sciences Praha, and also Agentura Agropro co-operative

II. Context

Forecast for rural China is based on description of foreign investments and co-operation or competition between different key players along the food production chain.

III. Objective

Development of scenario for Chinese rural industry and man or woman is the objective of this article.

IV. Methodology

Scenarios are developed along following transformation events for Czech rural areas:

a. Privatisation, merges and acquisitions (M+A) and foreign direct investments (FDI) of food processing industry

b. Transformation of farming co-operatives

c. Emergence of new co-operatives selling from farm gate

d. Emergence of new farmers and international new ventures (INV)

Scenarios were developed from above listed events using affect theory, stress values of life events, and principles of international business.

V. Results

Scenario of privatization, merges and acquisitions (M+A) and FDI of food processing industry

Privatization will not be possible in China as track of ownership is not known probably. Also M+A of private industry with state ownership was not accepted in Czech Republic and will not be possible in China also. FDI were already happened. Other example of FDI is Austrian biofuel processing company, which will compete with food production. Food consumption of Chinese is growing and food exports are considered from Europe now. Increased prices of food will cause decrease of consumption if income of Chinese will not grow as it happened in former Czechoslovakia.

Two main processes were identified. Firstly, regional development processes went through stages of privatization of food processing industry, transformation of farming co-operatives, emergence of new co-operatives selling from farm gate. This is long lasting and painful political and legislative process. Secondly, emergence of new farmers and international new ventures (INV) is developing over all previously mentioned rural and local development stages. Analysis of relation between veterinary costs and milk yield brought evidence that good technology and management can make farmer attractive for merges and amalgamations (M+A) by the global business.

VI. Forecast

Firstly, FDI, and other income opportunities in cities of 100 million people were compared with self-sufficient people in rural areas without income of city inhabitant. Secondly, the transformation of high tech farmers have pointed on consequences like decrease number of self-sufficient people, the thread of diseases in large farms, and costly processes of local transformation along the food product chain. So, it is forecasted that people from rural areas cannot go to towns soon, and both processes of political and technological reconstruction of rural enterprise will run in parallels. Finally, technological development will win over rural development political and legislative phases, while replacing rural inhabitants by entrepreneurs. Only World energy crisis could stop or delay this technology development and moving people to cities.

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