If you want to understand China's economy, think of it as a potato.
Whereas a jumble of official economic and financial data spun out by Beijing are prone to official censorship, potatoes, a humble crop that has been a low-cost dietary staple in much of the West, is one of the more illustrative and reliable barometers for the state of the Chinese economy.
Rice and wheat are considered strategically important foodstuffs by Beijing, which can set prices and production. Potatoes are not. Increasingly, they're consumed as convenience food, allowing their growth trajectory to mirror the population's income growth, as well as the expansion of the national economy.
“Potatoes are now considered as a high-valued crop and a vegetable in China. Demand for potatoes has been growing when other bulk commodities, such as rice and wheat, have seen demand declining,” said Jikun Huang, a professor at the Center for Chinese Agricultural Policy under the Chinese Academy of Sciences.
Consumption has gone up by more than 40% over the past five years, compared with a 2.45% global rate during the same period. Domestic production has kept pace, making China the world’s largest potato grower and largest consumer by volume.
French fries are one of the big reasons. China now eats more than 90,000 tons of frozen fries each year, 70% of them imported. According to a recent Rabobank report, China is expected to gobble 20% more potatoes in the next five years, a testament to the growth of the country’s fast-food restaurants.
No surprise that two U.S. fast food giants,
Others are moving in as well. Potato chip and frozen french fry producers--including PepsiCo's
It all points to growth for potatoes and, of course, to the waistlines of the Chinese people. Long bet? Think