When Lewis & Clark began their trek up the Missouri River from St. Louis to explore the Louisiana Purchase in 1803, China was the world’s largest economy and had been for 500 years.
Ag economist Dave Kohl used the reference to Lewis and Clark because they started their trek at the Gateway Arch, which is located about 200 yards from the Hyatt Regency Hotel, the site of the 2013 USA Rice Outlook Conference in St. Louis.
Speaking about China, Kohl said the country and its leaders would like to achieve that level of greatness again, but that a number of issues confront Xi Jinping, the relatively new general secretary of the Communist Party of China and president of the People’s Republic of China (since last March).
“You know what’s interesting about the new leadership in China? That gentleman is very, very westernized,” said Kohl. “He came from an elite Chinese family. His father said the wrong thing to Mao (Tse Tung). So the family was shunned. This guy actually worked on hog farms.
“Vice President Joe Biden invited him to the White House. He didn’t want to go to the White House, he wanted to go to Muscatine, Iowa where he had worked on a hog farm. He also took another visit to Smithfield Foods. The Chinese just acquired Smithfield Foods, and you know who acquired it? One of Xi’s best friends.”
The Chinese bought Smithfield for two reasons, he said: “Brand and food safety protocols. You have to remember when you’re dealing with the Chinese, he is trying to create social stability. They are going from a rural population to an urban population. The other problem they’re having to deal with is water. Fifty percent of the water in northern China is not suitable for industrial use. China is making alliances around the world so that they sources of food, fiber and fuel other than North America and Europe.”
China, which has been average 10.8 percent economic growth annually for the past 25 years, is about to enter a new phase of development which will mean more moderate growth, Kohl says. “Those are some of the dynamics influencing this great Super Cycle.”
To see more of Kohl’s presentation, go to http://www.usarice.com/doclib/233/7185.pdf