Innovation, Agricultural Productivity and Sustainability in China is a part of the OECD Food and Agricultural Reviews series. The review was implemented in collaboration with the Development Research Center of the State Council of the People’s Republic of China.

The Chinese economy is experiencing a number of structural changes that also have a deep impact on the food and agricultural sector.The working age population started to decline in 2015 and the overall population is projected to peak in 2030. The population is expected to age rapidly over the coming decades. Rapidly increasing real wages since the early 2000s required the People’s Republic of China (hereafter “China”) to transform its growth model from one that relied on an ample supply of low wage labour from rural areas. The challenge is to shift from growth based on the mobilisation of labour and capital resources to growth based on enhancing productivity through innovation and sustainable use of natural resources, including in the food and agricultural sector.

This chapter presents the framework used in the report to analyse the extent to which policies in China are supportive of innovation and structural change, and how they affect access to and use of natural resources for productivity growth and sustainability. It also gives an overview of the findings of the review on a wide range of policies in China, and develops specific recommendations in each of these policy areas.

This chapter describes the overall economic, social and environmental context in which the food and agriculture sector in China operates, and the natural resource base upon which it relies. It provides an overview of the general geographical and economic characteristics of China; outlines the share of the agri-food complex in the economy; identifies the main structural characteristics of the food and agriculture sector; provides an overview of the main food and agriculture outputs and markets; and analyses the main trends in agricultural productivity, competitiveness and sustainability. It finally raises a number of issues the agri-food complex is likely to face in the future.

This chapter gives an overview of the performance of the overall economy, macroeconomic developments and challenges, governance and institutions, and general incentives in China for investments by firms, including farms, input suppliers, and food companies. It discusses basic conditions for investment established by the overall regulatory environment; trade and investment policy, which influences the flow of goods, capital, technology, knowledge and people needed to innovate; and access to credit. The general fiscal policy and the treatment of agriculture are then discussed. Specific obstacles and incentives for investment in the agricultural sector are dealt with in later chapters of this report.

Capacity building, including provision of essential public services, is one of the main channels or incentive areas to support innovation and sustainable development. This chapter concerns five relevant policy areas: infrastructure and rural development; land use planning and regulation; water; labour market and social security; and education and skills.

This chapter provides an overview of developments in agricultural policies in China. It also reports on trends in the level and compositions of support and discusses the likely impacts of agricultural policy measures on structural change, environmental performance and innovation in the sector.

This chapter describes the Agricultural Innovation System in China and outlines the recent changes it has undergone. It first provides an overview of the general innovation system; presents agricultural innovation actors and their roles in the system; outlines changes in roles and themes of R&D; and presents the main policy instruments and monitoring efforts. It also reviews the main trends in public and private investments in R&D, the funding mechanism and the means used to foster knowledge markets and networks. This is followed by an overview of policy incentives for the adoption of agriculture innovation, with an emphasis on the role of training and advisory services at farm level.