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Digital Transformation in China’s Food Sector

Image source: gov.cn

China’s food sector is among industries adapting digital transformation by embracing advanced technologies like 5G and Artificial Intelligence (AI) to improve their businesses. The shift is in line with the efforts that the country has taken in recent years to realise supply-side structural reform to take the economy to the next level through innovation in the labour force, capital, technology, and regulation.

One of the examples is Shanghai has improved the firm’s production efficiency and reduced labour costs, requiring between 10 and 15 workers per workshop now, compared to 30 to 40 previously. There is a growing use of hi-tech in other areas of the food industry, like packaging and transportation. the outbreak of COVID-19 has also sped up the demand for digital transformation in China’s food processing and delivery chains.

China’s commitment to carbon neutrality and peak emissions is another factor encouraging manufacturing industries to bring in more new technologies to enrich energy efficiency. Consumption upgrades in China and increasingly tough competition in farm production and delivery in some Southeast Asian nations are also playing a part in this digitalisation process.

When the supply side is improved people can climb up the value chain and secure more income and generate additional demand for upgrades on the demand side. Since supply-side reform requires in-depth institutional planning and long-term adjustment, China has initiated policy support The central government has worked out and put in place policies and pilot programs with a primary agenda of reform.

– Qu Qiang, Assistant Director and Fellow, International Monetary Institute, Renmin University of China

China will reinforce the underpinning role of science and technology in agricultural production. In light of the national conditions and people’s needs, science-based and result-oriented efforts will be made to shore up the areas of weakness.

Mechanisms will be improved to fully mobilise market forces and promote collaboration on innovation between research institutes and universities, and enterprises and farmers. A sound commercial breeding system will be established, and enterprises in the seed industry will be nurtured and expanded.

The research, development and extensive application of practical and efficient farming machinery and equipment will be supported. Quality and efficiency in the agricultural sector will be promoted through technological innovation.

Moreover, an agricultural organisation has implemented a project to analyse and assess digitalisation processes in China’s agrifood sector concerning their effects on production, use of resources and trade. The project aims at systematically assessing the status quo of China’s digital agriculture as a basis for econometric and behavioural economic analyses of the adaptation and adoption of selected technologies and the empirical estimation of the economic and environmental consequences.

The findings will serve as a basis to consider future development paths and assess the impact of digital transformation processes from a global perspective. They will also provide important insights into the effects on international trade relations. The project will act as the starting point for the establishment of an international “Digital innovations in transition economies”.

As reported by OpenGov Asia, digital technology is bound to play a bigger role in the country’s steps toward rural vitalisation and agricultural modernisation. The digitalisation of rural industries is key to developing the countryside, and it is a new driver of a sustainable rural economy.

The push toward digital agriculture is the result of a plan released in January last year aimed at improving smart agriculture and providing support for rural vitalisation in the years leading up to 2025. Jointly released by the Ministry of Agriculture and Rural Affairs and the Cyberspace Administration of China, the plan proposed building a basic data system for rural areas to facilitate targeted management and services. The plan highlighted research into and the use of intelligent agricultural machinery as well as the development of smart agriculture based on the internet of things, sensors, location systems, and robots.

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