Grain processing sector of China which is one of the biggest grain producers witnesses a great competition with the privatization of grain sector and China’s rapid rise in economy. According to the data of State Administration of Grain in China; it is known that there are over 40.000 flour mills in China. However, most of them are village mills. Total number of registered flour mills is 4.245. A significant number of these have the capacity of 50 to 1000 tons per day. Also it is possible to say that 350 flour mills produce between 400 and 1000 tons per day. Besides, three biggest companies of the country produce over 10.000 tons per day.

China, one of the two biggest economies of the world, grows rapidly and becomes the largest labor force in the world with its increasing population. Recording a large increase in the production of grains and oilseeds over the years, China is also the biggest grain producer and consumer in the world. According to the data of World Bank; China produces enough food for 20 percent of the world population although it has only 7 percent of the arable land in the world. The country spares almost all of its arable land for food products. The production of food products like rice, corn and wheat shows quite high levels however it cannot meet the domestic consumption and import activities are carried out. Agriculture has an important place in the country. Along with this, the rate of agriculture on national income chart has decreased to 12 percent due to the reason that the urban population has increased in recent years and labor force has dispersed to other sectors. Even so, it employs nearly 45 percent of total labor force. GENERAL ECONOMIC OUTLOOK OF CHINA People’s Republic of China which has the most crowded population with 1,35 billion comes right after Russia in terms of land area. Labor force resulted from its population, its large geographic area and increasing growing rate for years made China one of the most important countries in the world. After their leader Mao Zedong died, Chinese government repealed collective farming and cleared the way for private enterprise in 1980s. China which transferred from central planning to market-based economy recorded a large growth in economic and social aspects. Showed a regular growth of 10 percent, the economic growth caused nearly 500 millions of people to overcome poverty. With Foreign Trade Provision of 1995, plans and programs were constituted to protect local production and control currency reserves. Although in western and inner parts of the country, sub structural deficiencies still remain, the economic growth in Eastern part is remarkable. Since 1980s, exclusive economic zones have advanced rapidly. The reason of this is the Open Door Policy. In this concept, various reforms were realized and regions like Guangzhou, Shenzen, Dongguan, Shunde, Nanhai and Zhongshan developed rapidly and became important production and trade centers of the world. Although succeeded to be the world’s second largest economy right after USA, nowadays China is still categorized as “developing country”. The primary reason is that per capita income is still low in comparison to developed countries. In spite of that; important regulations have been made for years to maintain economic growth. Recently it has improved the relations with foreign capitals and among developing countries it drew attention with investments made in the country. As a result of all these works, gross domestic product (GDP) of China rose to 9,39 trillion in 2013. İt is seen that İnflation was reduced to 2,6 percent and the rate of unemployment was also reduced to 4,1 percent. Foreign trade volume exceeded over 4 trillion dollars and drew attention as the world’s largest foreign trade volume. Expected growth rate of foreign trade volume in 2014 is 7,5 percent. Also, industry sector fell behind the service sector which for the first time reached to 46,1 percent. THE PLACE AND IMPORTANCE OF AGRICULTURE IN CHINA Agriculture which is one of the most important sectors of Chinese economy provides 12 percent of total national income of the country according to the statistics. Agriculture provides almost 45 percent of labor force in the country and keeps the leading position in production of various products. However, this remarkable growth of China came after a difficult process. Between the years of 1958 and 1961, as a result of drought, natural disasters, wrong agricultural policies, millions of people starved to death in China where the biggest famine in the history was recorded. At the end of 1970s, a series of modernization activities started in agriculture. As a result; the structure of collective farming changed significantly, purchase and sale of agricultural products were taken from government; farmers’ creativity and enthusiasm for work which were lost in time were regained. So, unprecedented production and circulation have been observed in rural china. The problem of drought which has led Chinese into trouble for years was solved. The arable land rate is the basic problem which has led to drought in the country’s history. That only 11 percent of the country’s land is arable couldn’t prevent china from providing food for its own citizens and exporting agricultural products to the world. China that meets the need for food of 20 percent of the world population has the biggest agricultural input in comparison to the other countries. 75 percent of arable lands were spared to the plantation of food products. 25 percent of aforesaid land is spared to rice production. Rice which was cultivated mostly around Yangtze valley comes second after wheat in agricultural export. ıt is cultivated nearly every part of china, particularly in the North china plain. Other products cultivated commonly are millet and corn. Millet and corn are cultivated mostly in northern and Eastern North of the country. Besides, potato is counted as important among agricultural products and it is cultivated with various types. Oilseeds are also among the primary products. Oilseeds have a large share in meeting the need for cooking and industrial oil and export of agricultural products. Another important product is tea. Specially jasmine and green tea is frequently consumed and black tea is produced particularly for export activities. İn terms of cotton production, china comes second after India and nearly in every part of china it is produced. PRODUCTION AND CONSUMPTION OF GRAIN AND PULSES When grain production of China is viewed, we encounter high rates. Despite the high rate of grain production, imports activities are carried in order to meet the demand. İt is possible to say that Part of the grain produced is exported. When the data of U.S. Department of Agriculture, Foreign Trade Service (USDA) is checked; it is seen that the highest production amount among the grains belongs to the corn. China comes second after USA in terms of corn production. İncrease in production is an important issue in China where the domestic demand for agricultural products gradually increases however the arable land of it is limited. According to the data of USDA; a general growth in corn production has been recorded in China although fluctuations have been realized in certain seasons for the last ten years. With 218 million tons, the highest rate of production was obtained in the season of 2013/14. İn the last ten years, the growing rate of production is 102 million tons. A serious growth of corn production was obtained in 2008/09 season in comparison to the previous seasons and the production amount rose to 166 million tons by increasing 13 million tons. A little decrease was obtained in the season of 2009/10 and the production amount reduced to almost 164 million tons. İn the season of 2010/11, the production amount reached to 177 million tons with a clear growth again. The production of corn which shows clear growths in the seasons of 2011/12 and 2012/13 reached to the amount of 205 million tons in the season of 2012/13. According to the data of USDA, the forecasted production amount for the season of 2014/15 is 214 million tons. All of the corn production in China is used for domestic consumption. However, the production can meet the domestic consumption in some seasons but in some seasons it cannot. So that, low amount of corn import is carried from time to time. The second largest production rate among grains after corn belongs to rice. The leadership of rice productions belongs to China. The production of rice in the country which was realized as 112 million tons in the season of 2003/04 was recorded as 130 million tons in the season of 2007/08 by increasing nearly 18 million tons. İt showed growth between the seasons of 2010/11 and 2013/14; finally reached to the level of 142 million tons. The forecasted production amount for 2014/14 season is 144 million tons. Although the rice production shows high rates, it seems that it is not enough to meet the domestic demand. As a result of the increasing population in China, the production remains incapable and import activities are needed. According to the data of USDA; rice consumption has increased 16 million tons in the last ten years. According to USDA; the rice consumption, which was 133 million tons in the season of 2008/09, rose to 134 million tons in the season of 2009/10 and remained in the level of 135 million tons in the season of 2010/11. The consumption amount rose to 139 million tons in the season of 2011/12 and reached to 146 million tons in the season of 2013/14 with a clear growth. According to the data of USDA; the consumption amount forecasted for the season of 2014/15 is 148 million tons. The highest production rate among grains after rice belongs to wheat. When the data of the last ten years is observed; a stable growth is seen to realize. China is the leader in the production of wheat. Wheat production amount which was 86 million tons in the season of 2003/04 rose to 108 million tons in the season of 2006/07. Also, the production amount which rose to 115 million tons in the season of 2010/11 reached to the amount of 122 million tons in the season of 2013/14. According to the data of USDA; a growth of 5 million tons is expected for the season of 2014/15. According to this; the forecasted production amount is 126 million tons. When the wheat consumption is viewed, a stable growth can be observed. The consumption amount which was 105 million tons in the season of 2008/09 rose to 107 million tons in the season of 2009/10. The consumption amount has also reached to 110 million tons in the season of 2010/11 and showed a remarkable growth of 122 million tons in the season of 2011/12. A little decrease of 121 million tons was obtained in the season of 2013/14. According to USDA; the forecasted consumption amount of wheat in the season of 2014/15 İS 124 million tons. Another important product in the production and consumption of China is Sorghum. When the production of sorghum is viewed; an ongoing decrease in the seasons of 2005/06 and 2009/10 can be seen. However, the sorghum production which was 2 million tons in the season of 2011/12 rose to 2,7 million tons in the season of 2013/14. İn the season of 2014/15 a similar production amount is expected. According to the data of USDA; it is seen that the consumption of sorghum exceeded the production amount. So, the consumption amount which was 3,2 million tons in the season of 2012/13 rose significantly to 6,8 million tons in the season of 2013/14. İn the season of 2014/15, it is forecasted that the growth will continue and the consumption will be around 7,2 million tons. Another grain, barley has the production amount of 1,5 to 3 million ton in China. However, barley production of China which reached to the level of 3,4 million tons in 2005/06 season started to decrease continuously in the following years. It is remarkable that the barley production dropped to the level of 1,5 million tons in 2013/14 season. The production amount for 2014/15 season is forecasted as similar to this. Despite the decrease in production, a rapid growth in consumption is remarkable. China’s barley consumption which was 4,7 million tons in 2003/2004 was realized as 6,3 million tons in 2013/14 season. It is seen that millet production of China is in the same level with consumption. According to the data of USDA; any imports or exports activity seem to realize in China. Based on this, it is clear that current production of millet is realized totally in order to meet the domestic demand. FOREIGN TRADE IN CHINA China that increases its share on world trade is the leader among the world’s biggest product suppliers and exporters currently. China’s foreign trade volume in 2013 reached to 4 trillion 260 billion dollars. This is 7,6 percent over the recorded value of previous year. When the foreign trade data viewed, it is seen that exports showed a growth of 7,9 percent and reached to 2 trillion 210 billion dollars. İmports rose to 1,950 trillion dollars with a growth of 7,3 percent. So that the foreign trade surplus reached to 259,9 billion dollars. When china’s rate of growth is viewed, it is seen that in nearly whole the recent twenty years, china has grown by reaching two-digit numbers. The production and export activities of foreign-invested companies have a big contribution to this. Almost 60 percent of total export is carried by foreign-invested companies. Just like exports, more than 50 percent of import activities are carried by means of foreign-invested companies. China’s share on the export of products with high added value like automatic data processing machines has gradually increases especially in recent years. Primary products that china exported are as follow: telephone and other devices, automatic data processing machines, electronic integrated circuits, crystalline materials, lasers, optical instruments and devices. Hong Kong, USA and Japan are the primary country that china exported. In 2003, China carried out export of 385 billion dollars with Hong Kong which is the largest market of china. The value of export with USA was 368 billion dollars in 2013. Besides USA, the importance of Japan, South Korea and Germany gradually increase in counter trade. The value of export with japan is 150 billion dollars. EU countries are also the leading countries china exports. As a result of the fact that lots of exported products contain import inputs in china, an important growth in imports has been recorded. Especially the growth in imports of raw materials like oil and mine inputs is remarkable. China is incapable of meeting the country’s needs for products with its increasing population and consumption rate. Primary countries china imported from are South Korea, Japan, Taiwan and USA. The value of import with South Korea is 183 billion dollars in 2013. The value of import with japan is 162 billion dollars. The primary products that china imported are as follows: electronic integrated circuits, crude oil, iron ores and concentrates, liquid crystalline devices, laser and optic devices. THE PLACE OF GRAINS IN FOREIGN TRADE Grain production shows an increase in China and along with this, local production of China is incapable of meeting all the domestic demand due to the high population. As a result of this, imports activity is preferred and the value of imports grows every year. According to the data of USDA; imports of corn increased from 47 thousand tons to 1,2 million tons by showing a serious growth in the season of 2009/10 in comparison to the previous season. In the following years, similar amounts were also recorded. In the season of 2011/12, with the import value of 5,2 million tons, the highest import level was reached. The forecasted imports value of 2014/15 season is 2,5 million tons. İncreasingly decreased numbers are observed in terms of corn export. Exports value which was 7,5 million tons in the season of 2003/04 recorded a drop in every season and remained as 22 thousand tons in the season of 2013/14. The place of rice which is another important food product seems to increase in imports. An important growth was obtained for rice import in the season of 2011/12, the imports amount which was 575 thousand tons in the previous season rose to 2,9 million tons. Rice imports which was 3,8 million tons in the season of 2014/15 is expected to rise to 4 million tons in the next season. In case of exports, low amounts are obtained. İt is possible to say that exports rate has decreased through the years. Export amount of rice which is 300 thousand tons in the season of 2013/14 is forecasted to be around similar levels for the next season. The import of wheat which shows dissimilarity by years increased significantly in the season of 2013/14. The wheat import which was nearly 3 million tons in the previous season reached to 6,7 million tons in the season of 2013/14. As a result of this, wheat import value of 1,7 million tons is forecasted for the season of 2014/15. However, wheat export has been remaining between 800 thousand tons and 1 million tons for the last three seasons. Another important imports product of China is barley. China’s barley import which is between 1 and 2,5 million tons in the seasons of 2003/04 and 2012/13 rose to 4,8 million tons in 2013/14 season. In current season of 2014/15, import amount of barley is forecasted to remain at 4,5 million tons. Import of sorghum in china is too low except for the season of 2013/14. The amount of imports for the season of 2013/14 reached to 4,1 million tons and it is forecasted to rise to 4,6 million tons in 2014/15 season. Import amounts of china are more remarkable than export amounts of china in terms of grains. However, the export amounts which seem high are very low when the size of the country, its population and domestic production amount viewed. In this aspect, china has substantially become self-sufficient. FLOUR MILLS IN CHINA In china of which economy has grown significantly after grains market was privatized competence in grain processing sector has risen significantly too. According to the State Administration of Grains in China; it is known that over 40,000 flour mills exist in China. However, most of these are village type mills. Over 30,000 of these mills have production capacity less than 50 tons per day. The number of registered flour mills is 4245. The number of mills producing 50 to 200 tons per day changes between 2000 and 3000. The number of mills producing 200 to 400 tons per day changes between 500 and 1000. It is possible to say that 350 flour mills produce 400 to 1000 tons of flour per day. Moreover, there are three large flour mills producing over 10,000 tons per day. It is possible to say that locally southern part of China is more modern and has larger mills than North. Particularly Guangdong region is one of the biggest suppliers. In time, large mills operating with 80 percent capacity per year have been constructed in Guangdong that moves ahead of the other regions in wheat import owing to its high consumption rates. 40 percent of flour produced in these mills is exported to the other regions. The capacity of flour mills in China rose significantly between the years of 2005 and 2010; increased from 80 million tons to 170 million tons. İt is stated that the total processing capacity currently is 250 million tons. However, 60-80 million tons of grinding process is actually realized per year. 10 percent of wheat flour produced in China is high quality- special-purpose flour that is used to make bread, pastry and biscuit. 50 percent of it is used in production of steamed bread and instant noodle. Remaining 40 percent is low quality flour consumed in villages. The production and consumption of high quality flour is expected due to rise in the living standards.