The Impact Of Global Bioenergy On China’s Food Security

As the continuous development and expand of bioenergy globally, the discussion between bioenergy and food security is hot. In recent years, food prices climb higher, and China has been more open to the outside world, which makes food security face a variety of risks. Problems such as food supply and demand imbalances, price volatility caused by bioenergy are likely to affect domestic market through a variety of ways, such as trade, financial markets. The core problem of this paper is to analyze the mechanisms how bioenergy affects food security in China, and whether at present has formed a significant impact.This paper will firstly introduce bioenergy and food security in the world and China, and carry on the analysis on the surface. By some vertical and horizontal comparison of the main index, we have the preliminary understanding and judgment to the global status of the development of bioenergy and food security, which help to further explore and analyze the problem.Secondly, this paper will focus on analyzing the inner mechanism of how bioenergy influencing China’s food security. By summary of past literature, this paper argues that bioenergy influences China’s food security by two main ways:price transmission path and policy transmission path. No matter whether China produces bioenergy, food security is likely influenced by it. To discuss the general situation, this paper first establishes the perspective of the impact of global bioenergy on food security. This paper refers to the model that Ciaian and Kancs used in their analysis about Energy-Bioenergy-Food Price Systems, and makes some simplification according to this paper research content by adjusting research from two-way to one-way instead. Facing the analysis of policy transmission paths, this paper combined the theory of international trade on the basis of price transmission path, to analysis how the policy will affect food security. After general analyses, this paper also discussed the situation that China as a bioenergy producer. Compared with the general case, more influence factors are included. This paper refers to Zhang and other scholars’ model, and makes some correction according to the research content. In this model, the price and the policy transmission paths are integrate, and long-term and short-term effects, respectively, are discussed.After analyzing price and policy transmission path from economics theory, this paper will use the actual data to test whether this transmission path is significant. Because of the lack of bioenergy data, this paper will use data of crude oil prices index. Explanation about the rationality is given on the analysis of the theoretical model:The high energy prices increase bioenergy demand, which increases the demand for raw materials, and while energy prices are flat or falling, this transmission mechanism does not exist. But the turning point of oil price change cannot be depicted exactly. Owing to this characteristic, this paper used Markov-Switching Vector Autoregression model to analyze the relationship between bioenergy prices and food prices in different energy prices regimes. The empirical results show that the transmission path effect is significant. In order to study the policy transmission path, this paper refers to event analysis which is commonly used in finance. Every event about bioenergy policy will be issued as a shock, and this paper will compare before and after the shock, whether grain futures prices have a significant change. This article will take corn futures prices as example. The research results show that Chinese corn futures prices are not sensitive to the international bioenergy policy, but more sensitive to domestic policy.Based on the above research result, China’s food safety is affected by the bioenergy more significantly in the price transmission path, namely the market behavior has more important impact on food security. As China’s food prices are affected by domestic bioenergy policy to a certain extent, China can take some reasonable measures to withstand the risk of global bioenergy development.