*4.1. Matching 1: Export Competitiveness of Central Asian Countries and China's Food Imports*

The study demonstrates that the development of agricultural value chains in the countries of Central Asia is based on a narrow nomenclature of the most competitive products: Fruit, wheat, cereals, and meat. This corresponds with the earlier findings of Rillo and Nugroho [43], Adriano [109], and International Center for Agricultural Research in the Dry Areas [110] who all concluded that value chains in each of the Central Asian countries served their respective competitive sectors and were not deeply integrated with each other due to different competitive advantages.

Both comparative and competitive advantage theories suggest that a country specializes in production and trade in those products in which it possesses an advantage over its competitors. It is natural for a dry and hot region of Central Asia to lose out in the production of cocoa, coffee,

and some crops (rice, maize, and barley) as well as for landlocked Tajikistan and Uzbekistan to be non-competitive in fishing. However, even in the conventional sectors of animal husbandry, fruit and vegetable processing, or edible products preparation, most of the Central Asian economies lose their competitive advantages as corresponds with the World Bank's [77] findings of the erosion of competitive advantages in the region due to the outdated facilities, lack of investment and technologies, underdeveloped infrastructure, low productivity, poor veterinary and phytosanitary systems, and low capacity to comply with packaging, marketing, and other requirements of the contemporary global market.

Apart from a pure trade advantage on one side, an establishment of a sustainable value chain involves the creation of stable demand for a product on the other [111,112]. Demand is one of the four interrelated components of success in international trade in Porter's theory of competitive advantage [113], as well as an integrated element in various value chain concepts, such as global commodity chain [114,115], world economic triangle [116], global value chain [117], Porter's value chain [113], commodity chain [118], and "filiere" approach [119].

On the one side of the chain, there are Central Asian suppliers of fruits, cereals, meat and dairy, and some other products identified as either competitive or conditionally competitive. What is the demand on the other side? China is a country where agricultural sector is intended to feed over 1.3 billion people [120]. This fact alone brings a substantial portion of risk to the stability of agricultural value chains globally. Since the late 1970s, China has been gradually opening its market to food import and external actors [121], as well as encouraging the penetration of its state-backed agricultural companies to value chains abroad. The most recent food security strategy approved in 2019 outlined international collaboration in agriculture as one of the tools to sustain food security of China and thus contribute to the improvement of food security globally [25].

By now, China has achieved self-sufficiency on staple agricultural products on the level above 90% [122]. For some products, nevertheless, the country still depends on imports being the world's top importer of soybeans, cotton, palm oil, and sugar. Oilseeds and oleaginous fruits, in which Kazakhstan and Turkmenistan possess competitive advantages, account for one-fifth of China's total agricultural imports in 2000–2018 (Table 8). Oilseeds and vegetable oils and fats will remain the predominant imported agricultural commodities of China for at least a couple of decades [120]. Currently, self-sufficiency in oilseeds is the lowest among agricultural products in China and is expected to decrease in 2020–2040 [120]. The match between demand and advantage makes soybeans the most perspective crop to produce and export to China. Fruits and nuts, in which all the countries of Central Asia, except Kazakhstan, enjoy the highest advantages, are also perspective for export, but China has been improving its self-sufficiency in fruits since mid-2000s. The demand is still high for exotic tropical fruits not grown in Central Asia. Moreover, there are advantages-demand overlaps for milk and dairy products (Kyrgyzstan), feeding stuff for animals (Kazakhstan and Kyrgyzstan), and sugar and honey (Kyrgyzstan).


**Table 8.** China's top import products and Central Asia's competitive advantages.


**Table 8.** *Cont*.

Note: \* share of a product *i* in total agricultural imports of China, average in 2000–2018; \*\* ratio of import volume of a product *i* to gross domestic output of a product *i*, average in 2000–2018. Source: Authors' calculation based on [26,123].

There is no match between Central Asia's competitive advantage in wheat and China's demand for grain. Currently, China supplies 95% of its own needs for grain [25], but in the coming decades, the demand for and import of grain crops is expected to rise rapidly [120]. Economic development, progressing urbanization and transformation of food consumption patterns along with the degradation of limited arable land and heavy use of fertilizers in China are likely to bring increased demand for all major crops in 2020–2040 [77,122,124]. Zhou [125], Zhou et al. [126], and the World Bank [77] attribute the growth in the consumption of food products of higher quality, nutrient value, and price in China (meat and meat products, milk and dairy products, and seafood) to the prejudice of cheaper and fewer nutrient crops. Consequently, Chinese meat and dairy producers demand more crops as fodder for agricultural animals which is a niche to be potentially occupied by the producers of feeding stuff for animals from Kazakhstan and Kyrgyzstan.
