No military war whether declared or proxy is on the cards in American power house against China. But what about war of geoeconomics specially one relates to the grain stocks, where supply line and sources to mainland China could be threatened. The probability is high and China knows about it, Hence her preparations to face it.
China seizes on the prime fact. If any time war is unleashed by the America led west, it could be in the arena of geoeconomics and the first action would be supply line disruptions via Malacca Strait and/or air transport, followed by a siege over the South China Sea denying cargo vessels plying to ports in Mainland China. Rebuffing this militarily is possible but would take its own time. In the meantime, China must have Food Stocks to last for an indefinite period.
Grain stock hoarding is now in commonplace in official as well as private entities. Almost 50% of the grain requirements for the year 2023 is already stocked in go-downs. There is a dichotomy here. Human consumption grains and the ones used as animal feeds which in turn appears on the dining table later as pork or other meat products.
Soybean and corn form the bulk of animal feeds. Ukraine war has created severe disruptions, because large quantum was generally sourced from Ukraine. Brazil supplies around 15 to 18%. Nearly 25% of US corn exports is destined to China. Both could disappear in the event of a commodity war.
Wheat on the other hand is mainly for human consumption sourced chiefly from Australia, Canada and USA. A total of US$ 613 Million is ticked for these three countries alone. Once again this part could be easily affected if geoeconomics hostilities begin.
China is now crafting her business strategy hinged upon diversifying most grain imports from Russia and Central Asian countries at the first shy and then book up with Eastern Oblasts of Ukraine once Ukraine war is over. Recent China – Central Asia Summit held during 18-19 May 2023 at the Xi'an International Conference Centre in Xi'an, Shaanxi Province in North Western China is an eye opener. The significance lies in the fact, Xi Jinping personally chaired the proceedings. Among other things, food security was the main thrust. Proof of the pudding is in the eating. Uzbekistan which does not export any grain to China at all was first to embrace the idea and would route her grain surplus thru Kazakhstan.
Russia joins with the fellow Stans in this exercise. Although she did not participate in the Summit a message was delivered to the participants Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and Uzbekistan to go along with China to solve grain conundrum. Needless to say Russia is on board to supply most types of grain to China via Central Asian Stans using the BRI connectivity. That combines Russian business strategy with that of China in facing new geoeconomics battle of the Titans!
Cheers!
Muthu Ashraff Rajulu
Business Strategist
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Business Strategist
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