Study On Growth Of The Food Processing Industry In China

Food processing industry (FPI) is one of the most important sectors within China national economy. There is a close relationship between FPT and Agriculture. At present, it has become a primary route for optimization of agricultural structure, increase of farmers' income and enchance of agricultural competence in the period of strategic adjustment in China's rural economy. As a main source for bettering national employment and income, it will play an important role for the growth of national income via the linkage effects.This paper, which uses C-D model, industry organization theory (SCP paradigm) and case study, focuses on some important factors which influence FPI growth in china.I. According to recent development in industry growth theory, it is endogenous factors, such as knowledge, accumulations of human capital and evolution of institutions, that determine industry growth. The exogenous factors, such as natural resources and population, have little effect on the industry growth. In other words, the intensive growth of industries mainly comes from knowledge, the level of human capital accumulation and efficient arrangement of institutions, instead of labors and material capital, China is in the period of transition, therefore, this study combines the latest theoretical advancement on industry growth with the specific situation and systematic characteristics of china.II. The increasing citizens' food expenditure scale in China is the dominant factor that pulls FPI growth. After the rise of residents' income in both urban and rural areas comes the rise of far-from-home food (FFHF) expenditure, and leads to an increase of the processed food proportion in food expenditure.III. Current China FRI follows the model of extensive growth, which depends heavily on material input. It is the poor investment on technology, the inferior human resource and systematic restriction that contribute to the result.IV. The extensive growth of FPI in China depends largely on factors input and the traditional state intervention. The present FPI growth of china is still driven by the local governments that incline to take high rate of growth as their first target in order to increase employment, raise fiscal revenue and show their achievements.V. The fact that state-owned enterprises excessively input and have many barriers to exit because of local government's intervention leads to disorderly competition in the FPI market. State-owned enterprises and rural enterprises become main conductors of resulting in extensive growth model of FPI. Other enterprises, which are driven by market, choose optimum technical route. They have contributed to improve FPI growth efficiency in China.