An agricultural mega-merger is about to ordain China as a new global leader in genetically-modified food.
First floated in 2016, a $43 billion deal that would merge Chinese state-owned agriculture company, ChemChina, and Swiss-owned seed company, Syngenta, promises to recast the world’s second largest economy as a biotech titan. The proposed deal is just one of three potential farm mergers that, if approved by regulators, will create the biggest farm-business oligopoly in world history and concentrate agricultural power to three countries: the US, Germany, and China.
The ChemChina-Syngenta merger is on the cusp of becoming official as regulators in the European Union and the United States this month gave nods of approval. (Mergers between Bayer and Monsanto, and DuPont with Dow Chemical, are also being reviewed by regulators.)
If the ChemChina-Syngenta deal is solidified, it will mark a major moment for China, which lacks enough arable land to grow the crops necessary for feeding a burgeoning population that’s consuming more meat and dairy products as its middle class expands. By using GM seeds, the country of 1.3 billion people hopes it will be able to use what arable land it does have more efficiently. The seeds have been engineered to endure harsher drought conditions, ward off pests, and produce higher crop yields, according to Science Magazine.
That could wind up having a significant impact in China, which relies heavily on food imports from other countries. China currently imports more soybeans than any other nation in the world, for example, and is the seventh largest importer of corn.
Still, such a power play by the world’s second-largest economy isn’t a for-sure winner in the short-term. Consumers in China, much like those in Europe, remain skeptical of GM food, which is rooted in a general distrust of Chinese government food safety claims. That’s partially because of scandals that have rocked the country in recent years, including one of tainted baby formula in 2008 and exploding watermelons in 2011.
Those incidents weren’t enough to halt Chinese ambitions, though. In 2014, the government published remarks by Chinese president Xi Jinping that signaled tacit approval of investing more and more in biotechnology, including the production the GM foods.