Date of Award

8-2013

Degree Type

Thesis

Degree Name

Departmental Honors

Department

Economics and Finance

Abstract

Using Chinese government statistical data, relevant laws and policy regulations, and current market projections, this report aims to help new-to-market U.S. exporters understand the development of the agricultural machinery market in China and the Northeast region, identifying both challenges and opportunities.

With a vast land area and diverse topography, China is one of the world's top agricultural producers. Agriculture accounts for about 11% of China's GDP and more than 40% of China's employment. Over the past several years, China has been increasing its agricultural mechanization in an effort to move from traditional to modern farming. The central government has been supportive of this growth through favorable policies that provide a variety of subsidies and financial aid programs, allowing small Chinese farmers to mechanize. Agricultural machinery cooperatives have also improved access to equipment for typical farmers.

In addition to mechanization, commercialization and increased use of biotechnology have already improved agricultural efficiency and yields. Many of China's core agricultural outputs also enjoy high local and global market prices. Both private and public investment in agriculture is high, and it is expected that investment will increase as producers seek to control their own supply chains. This alignment of both market demand and government support provides a window of opportunity for companies involved in the agricultural machinery industry.

China's Northeast region is one of the country's primary agricultural bases, particularly for key commodities such as soybeans, corn, wheat, rice, and other grains. One of the central government's key goals for the development of the northeast, as outlined in the 12th Five Year Plan, is to support the northeast region as a strategic base of national grain production and use the region as a food security base. Therefore, Northeast China stands out as a major market for agricultural machinery.

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Faculty Mentor

Shannon Peterson

Departmental Honors Advisor

Frank Caliendo

Capstone Committee Member

Randy Simmons