“…a small think tank with a knack of spotting new trends…” – Geoffrey Lean, Telegraph.co.uk.
Part 1. Deserts Invading China: The Worldwide Effect of Failure
If dust storms continue on the scale and with the frequency of the last few years, they will continue to affect nearby countries, including North and South Korea, Japan, and eastern Russia. As noted earlier, they are no longer merely a nuisance; they are now taking an economic toll, especially when they disrupt transportation and close schools and factories.
Another potential consequence of desertification’s shrinking the inhabitable area while the population continues to expand is that migration could change from internal to international. At some point, if more and more Chinese are squeezed into an ever-smaller area, the pressure to migrate abroad will intensify. Exactly where the dust bowl refugees would migrate to remains to be seen.
But perhaps the most immediate consequence of a failure by China to reverse the desertification of its landscape will be its effect on world grain markets, and thus on world food prices. In 1972, the Soviets decided after a poor harvest that rather than slaughter some of their herds, as they had done in similar situations in the past, they would simply import grain to offset the shortfall. As Soviet wheat imports abruptly climbed from 3 million tons in 1971 to 15 million tons in 1972, the world wheat price per bushel leapt from $1.90 in 1972 to $4.89 in 1974. 46
If China were to import even 10 percent of its total grain supply, or 40 million tons per year, it would be good news for farmers in exporting countries because world grain prices would likely climb off the top of the chart. The bad news is that if grain prices doubled, they could destabilize governments in low-income countries that rely heavily on imports, such as Algeria, Egypt, Indonesia, Iran, or Mexico. This could also impoverish more people in a shorter period of time than any event in history. It would create a world food economy dominated by scarcity rather than by surpluses, as has been the case over most of the last half-century. 47
And what if China were to someday consider importing 20 percent of its grain, which is still far less than the 40 percent or more imported by Algeria, Egypt, or Iran, or the 70 percent imported by Japan, for example? This would mean importing 80 million tons of grain. But where would such a large quantity of grain come from?
Many of the countries that already import a large share of their grain are still raising their imports. If China moves into the world grain market in a major way, as is now a distinct possibility, then importing countries will be competing for inadequate supplies of exportable grain. In such a world, China would probably fare better than most simply because it has an export surplus with the United States in excess of $80 billion a year. At a price of $125 per ton of grain, $1 billion will buy 8 million tons of grain. China thus could easily afford 80 million tons of grain using only $10 billion of its trade surplus with the United States. But how would the low-income countries that lack such purchasing power fare in world markets? 48
No country has ever faced a potential ecological catastrophe on the scale of the dust bowl now developing in China. Merely grasping its dimensions and consequences poses a serious analytical challenge. Fashioning an effective response is even more demanding. At this point, there is no funded plan in place or on the drawing board that will halt the advancing deserts.
China is taking some of the right steps, such as paying farmers to plant trees on fragile soils. But it still has a long way to go in order to reduce livestock numbers to a sustainable level and to stabilize aquifers. If the government is serious about reversing desertification, it will have to commit a massive amount of human and financial resources. In terms of national priorities, it will have to decide whether to use public resources to complete the Three Gorges Dam and build the costly proposed south-north water diversion project or, instead, to halt the deserts that are marching southward and eastward and that could eventually occupy Beijing. Whether China can effectively respond to this threat may offer some insight as to whether the world as a whole will be able to arrest the deteriorating relationship between the global economy and the earth’s ecosystem before it leads to economic decline.
46. USDA, Production, Supply, and Distribution, op. cit. note 45; IMF, op. cit. note 27.
47. Grain import dependence from USDA, Production, Supply, and Distribution, op. cit. note 45.
48. Data for China’s trade surplus with the United States from the U.S. Department of Commerce; grain prices from Wall Street Journal, various issues.
Copyright © 2002 Earth Policy Institute