Beijing Approves Import of Genetically Modified Crops, Slowly

It wasn't the speedy review promised, and Beijing is only part of the way to where the United States wants it to be. But one day after the end of a 100-day period set by the United States and China to develop a trade action plan, China approved two genetically modified crops for import, bringing the number of genetically modified import applications China has approved since May to four. Four other crops remain on the application waiting list.

In April, Chinese President Xi Jinping and U.S. President Donald Trump, meeting at Trump's Mar-a-Lago resort in Florida, agreed to a 100-day plan for trade talks. Now that the 100-day period is over, U.S. and Chinese officials are scheduled to meet in Washington on July 19 to inaugurate the U.S.-China Comprehensive Economic Dialogue. U.S. demands that China cut excess capacity in steel and aluminum production, China's agricultural subsidies, and China's onerous data-sharing requirements for foreign companies will likely top the agenda.

Though meager, China's late-in-the-game import approvals are likely an attempt to shore up its position going into the talks. With four of eight import applications still pending, and with U.S. and global companies still complaining about China's lack of transparency in its review process, Beijing has not quite managed to deliver on its end of the bargain regarding opening of the agriculture trade. (On May 11, Beijing made five commitments to the United States for delivery by the close of the 100-day period, three regarding finance and two regarding agriculture.) This incomplete outcome fits the overall pattern of the 100-day period. For example, China reopened its market to steer after 14 years, but because Beijing bars the use of growth hormones in imported beef and requires individual records on all cattle brought into the country, the U.S. beef it will import will likely remain relatively small. Furthermore, measures to resume beef imports had been all but finalized in September 2016 — well before Trump took office.

Similarly, China agreed to open some parts of its banking, financial services and bond markets to U.S. banks and firms. While Beijing issued guidelines to begin the licensing process to allow Chinese banks to offer credit cards from companies such as Visa and Mastercard, the move for now simply opened the door for applications. And the rules China issued July 10 opening the way for credit ratings of Chinese securities left U.S. firms seeking clarity about how to obtain licenses or how long the licenses would take to procure.

China is a vital market for U.S. agricultural products. Without Beijing's approval of a genetically modified strain of corn, soybeans, alfalfa or other crops, producers will be less likely to plant that variety. Meanwhile, China is working to further develop its own agribusiness and biotechnology industries. ChemChina's acquisition of Syngenta and China's large domestic development initiative are just two of the ways China is pushing this key technology forward. Food security is an imperative for Beijing, and biotech is part of a long-term strategy toward fulfilling that imperative. Allowing the import of genetically modified crops from the United States and other countries does not negate China's long-term goals (as the approvals can always be reversed or amended), but acts as a relatively painless appeasement in the short term.