Agricultura biotecnológica na China : um objectivo nacional

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Universidade de Aveiro 2005
Secção Autónoma das Ciências Sociais, Jurídicas e Políticas
Mariza Fernandes Pinheiro
Agricultura Biotecnológica na China: Um Objectivo Nacional




Universidade de Aveiro
2005 Secção Autónoma das Ciências Sociais, Jurídicas e Políticas
Mariza Fernandes Pinheiro
Agricultura Biotecnológica na China: Um Objectivo Nacional
Dissertação apresentada à Universidade de Aveiro para cumprimento dos requisitos necessários à obtenção do grau de Mestre em Estudos Chineses, realizada sob a orientação científica do Professor Richard Louis Edmonds, Professor Catedrático Visitante do Departamento de Geografia da Universidade de Londres e Membro Associado do Centro de Estudos Asiáticos da Universidade de Chicago







o júri
presidente Prof. Dr. Rui Armando Gomes Santiago professor associado da Universidade de Aveiro

Prof. Amadeu Mortágua Velho da Maia Soares professor catedrático da Universidade de Aveiro

Prof. Henrique de Pinho Guedes Pinto professor catedrático da Universidade de Trás-os-Montes e Alto Douro

Prof. Dr. Manuel Carlos Serrano Pinto professor catedrático convidado da Universidade de Aveiro







agradecimentos
Ao meu orientador Prof. Richard Louis Edmonds pelo seu apoio, profissionalismo e disponibilidade na elaboração deste trabalho; Ao Prof. Dr. Manuel Carlos Serrano Pinto, Coordenador do Mestrado em Estudos Chineses, pelo seu apoio e encorajamento; Aos meus professores e colegas de mestrado, em especial à Magda e ao Gil, pelo seu apoio e incentivo; À minha família pelo apoio, compreensão e encorajamento prestados ao longo do decurso da realização deste trabalho; Ao meu marido, Mário, pelo seu apoio em aplicações informáticas e pelo seu companheirismo; Dedico especial agradecimento à minha irmã Marinela pelo seu incansável apoio e colaboração, decisivos na conclusão deste trabalho; A todos, o meu muito obrigada.





palavras-chave
Agricultura biotecnológica, China, políticas, estratégias.
resumo
O presente trabalho propõe-se investigar as políticas de desenvolvimento de agricultura biotecnológica chinesa. Objectivos de investigação, estratégias, prioridades, comercialização e a organização institucional para o desenvolvimento da agricultura biotecnológica são examinados. Incluída está também uma descrição da avaliação dos regulamentos sobre a biosegurança na China, bem como a construção da capacidade de investigação e o investimento público – um dos maiores esforços de investimento público em agricultura biotecnológica no mundo. O objectivo deste trabalho é obter um maior entendimento dos principais processos políticos relacionados com agricultura biotecnológica, para poder identificar potenciais temas para subsequente investigação.





keywords
Agricultural biotechnology, China, policies, strategies
abstract
This dissertation researches China’s agricultural biotechnology development policies. Research goals, strategies, priorities, commercialization, and China’s organizational framework for agricultural biotechnology development are examined. Included is a description of the evaluation of China’s biosafety regulations as well as China’s research capacity building and public investment – one of the largest public research efforts on agricultural biotechnology in the world. The goal of this dissertation is to have a better understanding of the main features of policy and policy processes surrounding agricultural biotechnology to identify potential issues for subsequent research.


Table of Contents

Introduction ........................................................................................................................... 8 PART I Agricultural Biotechnology in the World: An Overview ..................................... 16
Chapter I Scientific Context of Biotechnology ............................................................... 17 1 - Definitions of Biotechnology and Agricultural Biotechnology ............................. 18 2 – The History of Biotechnology ............................................................................... 20 3 – Techniques of Genetically Modified Organisms (GMOs) .................................... 23
Chapter II Risks and Benefits of Agricultural Biotechnology ........................................ 34 1 – Risks and Benefits of Agricultural Biotechnology................................................ 35 2 - Technology Inherent Risks .................................................................................... 36 3 - Technology Transcending Risks ............................................................................ 41 4 - Benefits .................................................................................................................. 44 5 - Summary ................................................................................................................ 46
Chapter III Role of Agricultural Biotechnology............................................................. 47 1 – The Green Revolution ........................................................................................... 48 2 – Poverty Alleviation and Food Security ................................................................. 50
Chapter IV The Status of Global Agricultural Biotechnology........................................ 59 1 – The Global Area of Transgenic Crops................................................................... 60 2 – Distribution of Transgenic Crops, by Country ...................................................... 62 3 – Sowing of Transgenic Crops, by Crop Type ......................................................... 65 4 – The Distribution of Transgenic Crops, by Modification Traits............................. 66 5 – The Global Value of GM Crops ............................................................................ 68
PART II Agricultural Biotechnology in China ................................................................... 69 Chapter I Historical and Current Status of Technology and Biotechnology in China .... 70
1 - Historical and Current Status of Technology and Biotechnology in China........... 71 2 – China’s Research and Development System......................................................... 78
Chapter II China’s Agricultural Biotechnology Development Strategies and Policies... 85 1 - China’s Agricultural Biotechnology Development Strategies and Policies........... 86 2 - The Role of the Private and Public Sectors............................................................ 88 3 - Institutional and Policy Measures .......................................................................... 90
Chapter III China’s Agricultural Biotechnology Research Institutions and Administrative System .................................................................................................... 95
1 - China’s Agricultural Biotechnology Research Institutions and Administrative System ......................................................................................................................... 96 2 – Agricultural Biotechnology Research Indicators ................................................ 101 3 - Agricultural Biotechnology Research Focus........................................................ 107 4 - Bt Cotton in China ............................................................................................... 113
Chapter IV Biosafety Management and Regulations in China...................................... 137 1 – Biosafety Management and Regulations in China .............................................. 138 2 - The Cartagena Protocol on Biosafety .................................................................. 143 3 - National Biosafety Framework of China ............................................................. 148 4 - Consumer Acceptance of Biotechnology............................................................. 151 5 - Institutional Setting .............................................................................................. 153 6 - Biosafety Regulations .......................................................................................... 157 7 - Trade and Biotechnology in China ...................................................................... 160 8 - China’s Stance on Biotechnology Development – For or Against? .................... 164

Conclusion......................................................................................................................... 167 Bibliography ...................................................................................................................... 174 Annexs ............................................................................................................................... 186

Agricultural Biotechnology in China: A National Goal 8





Introduction

Introduction

Agricultural Biotechnology in China: A National Goal 9
Introduction

During the past decade, China accelerated its investments in agricultural
biotechnology research and developed the largest plant biotechnology capacity outside of
North America. It is often forgotten that China was the first country to grow a transgenic
crop commercially – tobacco. After having 1.6 million hectares planted with GM tobacco
in 1996, China discontinued growing GM tobacco due to concerns that tobacco processors,
mostly from the U.S., would ban Chinese imports of tobacco because it was genetically
modified.
In a rapidly growing area of GM plants, China has become the fourth largest
grower of GM crops after the United States, Argentina, and Canada.
In developing countries with a high population pressure, genetically modified
organisms (GMOs) might be a ready way to solve food security and this can be a reason
for hasty adoption, though this promise is not being fulfilled by industry. Food shortage is
particularly imminent for China, which houses one-fifth of the world population.
In 1995, the scientist Lester Brown shocked the Chinese government, and received
much criticism, with his prediction that the People’s Republic would face critical food
shortages in the future. In China the average area of farmland per capita is only one-third
of the world average. Many experts say that high yield and disease resistant genetically
modified (GM) crops may help developing nations like China and India feed their growing
populations. GM foods might thus provide an attractive solution to the Chinese
government.
China has enthusiastically pursued genetically modified products in its drive to be
self-sufficient in food supplies for its 1.3 billion people. Proponents contend that
genetically altering crops to resist pests, drought or other adverse conditions may be the
only way to ensure food security in the developing world, particularly in densely populated
Asia. But the technique of splicing genes from one organism into another has also
provoked fears of unforeseen hazards to health and the environment. Although, the country
has not seen the level of heated debate that has raged in Europe and elsewhere over their
safety.
Two 21st century megatrends – China’s likely emergence as an economic colossus
and the global rise of commercial life science – are coming together. For this nexus yield a

Introduction

Agricultural Biotechnology in China: A National Goal 10
world-class biotech industry will probably take a decade or more: turning science into
commerce requires a commercial infrastructure with lots of venture capitalists, strong
patent protections, and vibrant stock exchanges – the product of a daunting process of legal
and cultural change that China has only just begun. Whatever the future will bring, the
Chinese government is stepping up its efforts to control the biotechnological sector.
China is fast applying the latest life science techniques learned from the West to
aggressively pursue genome research. It is establishing its own centres of technical
excellence to build a scientific base to compete directly with the US and Europe. With a
plentiful supply of smart young scientists at home and lots of interest abroad,
biotechnology is on the brink of a boom in China. Potential profits aside, achievements in
the field will help put to rest perennial fears in China about food security. They also will
place the country amongst a vanguard of innovators in an industry that is changing the
world as fundamentally as the communications revolution has in the past decade. In the
view of foreign scientists, Beijing is playing a clever hand, maximizing the opportunities
open to them.
China considers agricultural biotechnology a strategically significant tool to
improve its national food security, raise agricultural productivity, and create a competitive
position in international agricultural markets. China also intends to position itself as a
world leader in biotechnology research. This objective also addresses the perception that
policy makers have of the risk associated with the dependence of national food security on
imported technologies. Despite the growing debate worldwide on GM crops, China has
developed agricultural biotechnology decisively since the mid-1980s. China was the first
country to commercialize a GM crop and was the fifth country in terms of GM crop area in
2003. China has about 20 genetically modified plants that are in the pipeline for
commercialization.
This work will show that China’s efforts in promoting biotechnology research have
increased over time. Most efforts have been made to improve research capacity, increase
the stock of knowledge and technology, and promote commercialization of the
biotechnology significantly needed by farmers (i.e., Bt cotton). Research capacity in terms
of both quantity and quality has improved significantly. The share of professional staff
holding a PhD degree in biotechnology research is the highest in China’s agricultural
research system. On the other hand, human capacity may need further improvement if

Introduction

Agricultural Biotechnology in China: A National Goal 11
China intends to establish an internationally competitive biotechnology research program
and to achieve the overall goal of promoting agricultural biotechnology in China.
A remarkable event has been the growth of government investments in agricultural
biotechnology research. In contrast to stagnating expenditures on agricultural research in
general, investments in agricultural biotechnology have increased significantly since the
early 1980s. In spite of the fact that the number of researchers increased rapidly over the
past 15 years, investment measured as expenditure per scientist more than doubled.
Examination of the research focuses of agricultural biotechnology research reveals
that the food security objective and the current farmers’ demands for specific traits and
crops have been incorporated into priority setting. Moreover, the current priority setting of
investments in agricultural biotechnology research has led to investment in favor of the
commodities in which China does not have relative comparative advantage in the
international market such as grain, cotton and oil crops, which implies that China is
targeting its GMO products at the domestic market. However, the impact of the current
priority setting on poverty is not clear.
The rise of China in the 21st Century to coincide with the Biology Century is not
only of symbolic importance but also holds great promise not just for China but for the
biotechnology industry as a whole. After the breakthroughs of biotechnology in recent
times, and the dotcom crash of recent years, thus diverting venture funds elsewhere to
other growth industries, the stage is set for biotechnology to boom. Therefore, the growth
of biotechnology in China is like biotechnology itself, multifaceted, multidisciplinary and
multiplier, making the economy expand in explosive terms. The country has an excellent
set of comparative advantages when compared to other countries. China is a country that is
a paradise and heaven for the development of biotechnology. It has the market, it has the
talents, the resources, and the great biotechnological research and development work that
have actually gone on for thousands of years already. China, with its own remarkable
achievements in recent years is where the biotechnological researchers and
“scientrepreneurs'” dream come true.
There are other important questions that require attention, and that are going to be
made throughout this study. Should China continue to investment only its own resources in
biotechnology or can China rely more on imported technology? Can China define the
appropriate mix and trade-offs between domestic and imported technologies? What are the

Introduction

Agricultural Biotechnology in China: A National Goal 12
implications of the current biotechnology development on the income and welfare of the
poor? How can China incorporate the objective of poverty alleviation into the priority
setting of biotechnology research? Does China need to continue expanding its
biotechnology at the sub-national level? How can biotechnology programs at different
levels (and within the same level) be coordinated to maximize the efficiency of the
research investment?
This study will be divided into two Parts, which will then be divided into Chapters.
Part I attempts to summarize the concept of agricultural biotechnology worldwide.
The study of agricultural biotechnology in China is better understood when looking at the
general environment that surrounds it. It explores the frontiers of agricultural
biotechnology and places it in the broader context of the production, conservation and
management goals that researchers are addressing. Most of the controversies surrounding
biotechnology focus on transgenic crops, but these innovations represent only a tiny
fraction of the technical possibilities offered by biotechnology in crops. Genetic
engineering is both a more precise extension of breeding tools that have been used for
decades and a radical departure from conventional methods. It is the ability of genetic
engineering to move genes across species barriers that gives it its tremendous power and
that makes it so controversial. Part I is divided in four chapters.
Chapter I introduces the definition of biotechnology and agricultural biotechnology
in a scientific context.
Chapter II reviews the risks and benefits associated with transgenic crops. Scientists
have determined that the transgenic products currently on the market are safe to eat,
although they recommend ongoing monitoring and that newer, more complex products
may need additional food safety procedures. The potential environmental impacts of
transgenic crops provoke greater disagreement among scientists. They generally agree on
the types of hazard that exist, but they disagree on their likelihood and severity. Thus far,
none of the major environmental hazards potentially associated with transgenic crops has
developed in the field. Scientists agree that transgenic crops must be evaluated on a case-
by-case basis taking into consideration the crop, the trait and the agro-ecosystem in which
it is to be released. Scientists also agree that regulation should be science-based, but that
judgement and dialogue are essential elements in any science-based regulatory framework.

Introduction

Agricultural Biotechnology in China: A National Goal 13
The scientific evidence concerning the environmental and health impacts of genetic
engineering is still emerging. Scientists generally agree that the transgenic crops currently
being grown and the foods derived from them are safe to eat, although little is known about
their long-term effects. There is less scientific agreements on the environmental impacts of
transgenic crops. Scientists generally agree on the nature of the potential environmental
risks, although they differ regarding their likelihood and consequences. There is strong
consensus among scientists concerning the need for a case-by-case evaluation that
considers the potential benefits and risks of individual genetically modified organisms
(GMOs) compared with alternative technologies.
Chapter III makes a brief overview of role of agricultural biotechnology in
promoting food security and poverty and hunger alleviation worldwide and in China. The
Green Revolution, which lifted millions of people out of poverty, came about through an
international program of public-sector agricultural research specifically aimed at creating
and transferring technologies to the developing world as free public goods. The Gene
Revolution, by contrast, is currently being driven primarily by the private sector, which
naturally focuses on developing products of large commercial markets. This raises serious
questions about the type of research that is being performed and the likelihood that the
poor will benefit.
Chapter IV reviews the global status of agricultural biotechnology, from 1996 to
2003, according to data reported by Clive James and other researchers.
Part II analyzes agricultural biotechnology in China and it is divided in four
chapters. Chapter I traces a historical overview of technology and biotechnology in China.
Chapter II makes an analysis of China’s agricultural biotechnology development and
strategies. The nation’s public-dominated research system that has been given a clear
mandate to emphasize food security also has given China’s researchers a strong incentive
to produce GM crops that increase yields and prevent pest outbreaks. The information on
the scope of new plant biotechnologies produced by China illustrates the differences in
their research priorities when compared to different parts of the world, differences that may
reflect the fact that China’s research is done by the public sector while in other countries
much of the work is being done by the private sector.
Chapter III recalls China’s agricultural biotechnology research institutions and
administrative system. The statistics on biotechnology research investment and human

Introduction

Agricultural Biotechnology in China: A National Goal 14
capacity will be based on a survey of 29 of China’s leading plant biotechnology research
institutes, a sample that includes information on more than 80 percent of the plant
biotechnology programs in China.
Chapter III also tracks the record that the nation has achieved in the extension of Bt
cotton, the case of one of the earliest and the largest episodes of the commercialization of
plant biotechnology in China. The determinants of adoption and the effect that the new
technology has had on production, the environment, and the health of farmers are analyzed.
The institutional framework for supporting agricultural biotechnology research
program is complex both at the national and local levels. However the current institutional
arrangements show that the coordination among institutions and consolidation of
agricultural biotechnology programs are taking place and have become essential for China
to create a stronger and more effective biotechnology research program in the future.
Chapter IV gives an overview of biosafety management and regulation in China. It
looks at the politics of biosafety regulation in China and policy processes around GM crops.
What implications are associated with them? In China, biosafety decision-making is one
key area where agricultural biotechnology policy is defended and contested. The chapter
looks at how regulatory decisions about imports of GM soybeans have used scientific
arguments strategically to defend China’s nascent biotech industry and the country’s room
for manoeuvre in relation to agricultural trade and food security policy choices.
This study tries to go beyond describing China’s agricultural biotechnology
research, policies, administration and infrastructure. It tries to understand the causes and
consequences of agricultural biotechnology policies undertaken by the Chinese
Government. Why is agricultural biotechnology a national goal? Is food security concerns
the main reason for the development of agricultural biotechnology in China, or is China
positioning itself to be the world leader in agricultural biotechnology in coming years?
What should be the role of China’s emergence as an agricultural biotechnology trading
nation, and its rising strength in plant biotechnology research, production and
commercialization?
In order to better understand China’s role of agricultural biotechnology worldwide
at the moment, this work will rely on different and diverse sources and data, which are by
no means comprehensive in their overview of Chinese interest and importance in
agricultural biotechnology. It is, therefore, my objective to present and to analyze as much

Introduction

Agricultural Biotechnology in China: A National Goal 15
information on this topic as possible in order to understand the reason why agricultural
biotechnology is of major importance for the Chinese policymakers, in particular, and the
Chinese population, in general. In short, this work will try to establish why agricultural
biotechnology has become for the Chinese a national goal.
















PART I Agricultural Biotechnology in the World: An Overview








Chapter I Scientific Context of Biotechnology


Chapter I – Scientific Context of Biotechnology
Agricultural Biotechnology in China: A National Goal 18
1 - Definitions of Biotechnology and Agricultural Biotechnology
Biotechnology is far too diverse and diffuse for any brief definition to be
completely satisfactory. Biotechnology, broadly defined, includes any technique that uses
living organisms, or parts of such organisms, to make or modify products, to improve
plants or animals, or to develop microorganisms for specific use. It ranges from traditional
biotechnology to the most advanced modern biotechnology. Biotechnology is not a
separate science but rather a mix of disciplines (genetics, molecular biology, biochemistry,
embryology, and cell biology) converted into productive processes by linking them with
such practical disciplines as chemical engineering, information technology, and robotics.
Modern biotechnology should be seen as an integration of new techniques with the well-
established approaches of traditional biotechnology such as plant and animal breeding,
food production, fermentation products and processes, and production of pharmaceuticals
and fertilizers (Doyle and Persley, 1996).
The key components of modern biotechnology are listed below:
• Genomics: The molecular characterization of all genes in a species. • Bioinformatics: The assembly of data from genomic analysis into accessible forms,
involving the application of information technology to analyze and manage large
data sets resulting from gene sequencing or related techniques.
• Transformation: The introduction of one or more genes conferring potentially useful traits into plants, livestock, fish and tree species.
• Genetically improved organism. • Genetically modified organism (GMO). • Living modified organism (LMO). • Molecular breeding: Identification and evaluation of useful traits in breeding
programs by the use of marker-assisted selection (MAS).
• Diagnostics: The use of molecular characterization to provide more accurate and quicker identification of pathogens.
• Vaccine technology: The use of modern immunology to develop recombinant deoxyribonucleic acid (rDNA) vaccines for improved control of livestock and fish
diseases.


Chapter I – Scientific Context of Biotechnology
Agricultural Biotechnology in China: A National Goal 19
Cohen (1999) quoted in FAO (2004) proposes another definition of biotechnology.
In this definition, biotechnologies are the products arising from cellular or molecular
biology and the resulting techniques coming from these disciplines for improving the
genetic makeup and agronomic management of crops and animals. These techniques
include fermentation, microbial inoculation of plants, plant cell and tissue culture, enzyme
technologies, embryo transfer, protoplast fusions, hybridoma or monoclonal antibody
technology and recombinant DNA (rDNA) technologies. This definition allows for a focus
on products arising from the research continuum between traditional and modern
biotechnology. The artificial segregation between modern and traditional biotechnologies
will certainly disappear, as laboratories world-wide incorporate modern biotechnology
techniques into their daily research operations.
Biotechnology also can be defined as the application of our knowledge and
understanding of biology to meet practical needs. By this definition, biotechnology is as
old as the growing of crops and the making of cheese and wines. Today’s biotechnology is
largely identified with applications in medicine, and agriculture based on our knowledge of
the genetic code of life. Various terms have been used to describe this form of
biotechnology including genetic engineering, genetic transformation, transgenic
technology, recombinant DNA (deoxyribonucleic acid) technology, and genetic
modification technology (National Academy of Sciences, 2000).
According to the Convention on Biological Diversity (CBD), biotechnology means
“any technological application that uses biological systems, living organisms, or derivates
thereof, to make or modify products or processes for specific use”. Interpreted in the broad
sense, the definition covers many of the tools and techniques that are commonplace today
in agriculture and food production. Interpreted in a narrow sense, biotechnology mainly
covers technological applications involving reproductive biology, or, secondly, the
manipulation, or use, of the genetic material of living organisms for specific uses. This
definition covers a wide range of diverse technologies including, for example, the use of
molecular DNA (deoxyribonucleic acid) markers, gene manipulation and gene transfer,
vegetative, reproduction (crops and forest trees), embryo transfer and freezing (livestock)
and triploidization (fish).
Agricultural Biotechnology is that area of biotechnology involving applications to
agriculture. In the broadest sense, traditional biotechnology has been used for thousands of

Chapter I – Scientific Context of Biotechnology
Agricultural Biotechnology in China: A National Goal 20
years, since the advent of the first agricultural practices, for the improvement of plants,
animals, and microorganisms (Persley et al., 1999).

2 – The History of Biotechnology
For thousands of years humankind has been taking advantage of the activities of
micro-organisms to produce foodstuffs and drinks without understanding the microbial
processes (fermentation). The ancient Egyptians applied mouldy bread to infected wounds
for its antibiotic effect – today we turn that the mould into penicillin. Also, the
fermentation of fruits and grains to make wine, beer and spirits has been going on all over
the world for thousands of years.
To understand why biotechnology is becoming a major influence at this time, it is
useful to review a number of significant advances in modern biotechnology over the past
two decades. A chronology of the development of modern biotechnology is given in Table
1.

Chapter I – Scientific Context of Biotechnology
Agricultural Biotechnology in China: A National Goal 21
Table1 – The evolution of the science of genetics, leading to modern biotechnology.
1866 Mendel postulates a set of rules to explain the inheritance of biological characteristics in living organisms.
1900 Mendelian law rediscovered after independent experimental evidence confirms Mendel’s basic principles.
1903 Sutton postulates that genes are located on chromosomes. 1910 Morgan’s experiments prove genes are located on chromosomes. 1911 Johannsen devises the term “gene”, and distinguishes genotypes (determined by genetic
composition) and phenotypes (influenced by environment). 1922 Morgan and colleagues develop gene mapping techniques and prepare gene map of fruit fly
chromosomes, ultimately containing over 2000 genes. 1944 Avery, MacLeod and McCarty demonstrated that genes are composed of DNA rather than
protein. 1952 Hershey and Chase confirm role of DNA as the basic genetic material. 1953 Watson and Crick discover the double-helix structure of DNA. 1960 Genetic code deciphered. 1971 Cohen and Boyer develop initial techniques for rDNA technology, to allow transfer of
genetic material from one organism to another. 1973 First gene (for insulin production) cloned, using rDNA technology. 1974 First expression in bacteria of a gene cloned from a different species. 1976 First new biotechnology firm established to exploit rDNA technology (Genentech in USA). 1980 USA Supreme Court rules that microorganisms can be patented under existing law
(Diamond v. Chakrabarty). 1982 First rDNA animal vaccine approved for sale in Europe (colibacillosis). First rDNA pharmaceutical (insulin) approved for sale in USA and UK. First successful transfer of a gene from one animal species to another (a transgenic mouse
carrying the gene for rat growth hormone). First transgenic plant produced, using an agrobacterium transformation system. 1983 First successful transfer of a plant gene from one species to another. 1985 US Patent Office extends patent protection to genetically engineered plants. 1986 Transgenic pigs produced carrying the gene for human growth hormone. 1987 First field trials in USA of transgenic plants (tomatoes with a gene for insect resistance). First field trials in USA of genetically engineered microorganism. 1988 US Patent Office extends patent protection to genetically engineered animals. First GMO approved. Human genome mapping project initiated. 1989 Plant genome mapping projects (for cereals and Arabidopsis) initiated. 2000 Plant genome mapping projects for rice and Arabidopsis completed, and about 44 million hectares of land planted to GMO crops. DNA = deoxyribonucleic acid, GMO = genetically modified organism, rDNA = recombinant DNA, UK = United Kingdom, USA = United States of America. Source: Asian Development Bank (ADB), 2001.

Chapter I – Scientific Context of Biotechnology
Agricultural Biotechnology in China: A National Goal 22
Genetic improvement as we know it today is the result of a lengthy process of
research and scientific discoveries that occurred throughout the 20th Century. Though plant
breeding existed for thousands of years, it became a scientific endeover only after Gregor
Mendel formulated his laws on inheritance in 1866. Mendel’s basic discovery was that
each heritable property in any living organism is determined by a physical factor contained
within the cell of the organism.
In the 1930s and 1940s, several new methods of chromosome and gene
manipulation were discovered, such as the use of colchicines to achieve a doubling in
chromosome number, commercial exploitation of hybrid vigor in maize and other crops,
use of chemicals such as nitrogen mustard and ethyl methane sulphonate to induce
mutations and techniques like tissue culture and embryo rescue to get viable hybrids from
distantly related species (Swaminathan, 2000).
In 1953 James Watson and Francis Crick discovered the double helix structure of
DNA (deoxyribonucleic acid), the chemical substance of hereditary. DNA is the molecular
blueprint for life and codes for the proteins that perform the functions of cells. DNA
consists of a series of molecules called bases that join together to form a linear strand.
DNA contains four types of bases termed adenine (A), thymine (T), guanine (G) and
cytosine (C). The order in which these bases occur on the DNA strand determines what
information is carried by that strand. This information is divided into regions that are
called genes. Each gene codes for a specific protein. The technique allows molecular
biologists to “decode” the information held in an organism’s DNA.
This triggered explosive progress in every field of genetics. From the discovery
fifty years ago of the structure of DNA, scientists soon came to realize they could take
segments of DNA that carried information for specific traits – genes – and move them into
another organism. In 1972, the collaboration of Hubert Boyer and Stanley Cohen resulted
in the first isolation and transfer of a gene from one organism to a single – celled bacterium
where it would express the gene and manufacture a protein. Their discoveries led to the
first direct use of biotechnology – the production of synthetic insulin to treat people with
diabetes – and the start of what is often called modern biotechnology (Babinard, 2001).
By the late 1970s, both human growth hormone and human insulin had been
produced in bacteria and in 1980 the first patent for a genetically modified microorganism
was granted in the US (Manning, 2000).

Chapter I – Scientific Context of Biotechnology
Agricultural Biotechnology in China: A National Goal 23
The first microorganism patented granted in the US and the granting of the Cohen-
Boyer process patent for their genetic transfer technique in the 1980 generated a rapidly
growing interest in biotechnology and in its commercial applications (Babinard, 2001).
This was rapidly followed by the development of GM plants and their patenting in 1985.
The first genetically modified animal was patented in 1988 (Manning, 2000). The first
wave of agricultural biotechnology products initiated in the early 1990s has benefited
farmers and producers by providing agronomic traits that make it easier to grow crops
while reducing production costs. The products are primarily modified to include pest or
herbicide resistance genes. Biotechnology is also being applied with some success in the
livestock sector (Babinard, 2001).

3 – Techniques of Genetically Modified Organisms (GMOs)
3.1 – Recombinant DNA Technology
Deoxyribonucleic acid (DNA) and its sister compound ribonucleic acid (RNA) are
vital components of many biotechnological applications. The molecular biology revolution
that has occurred in the last twenty years and created so many new biotechnological
opportunities is fundamentally based on the ability to precisely manipulate DNA (Johnson-
Green, 2002).
The prime role of DNA is to act as a reservoir of genetic information. This is
possible because of the following structural features of DNA:
• DNA is a double helix made up of two antiparallel strands. • Each strand is made up of a backbone of deoxyribose monosaccharides linked
covalently through phosphate bridges.
• Each deoxyribose unit is linked covalently to a base consisting of either adenine (A), guanine (G), cytosine (C), or thymine (T).
• Two antiparallel strands, through hydrogen bonding between adjacent base pairs, can form a stable double helix.
• Hydrogen bonds from between complementary base pairs (C-G and A-T).

Chapter I – Scientific Context of Biotechnology
Agricultural Biotechnology in China: A National Goal 24
• Three linear bases on a strand code for a specific amino acid – this allows a linear sequence of bases on a strand of DNA to code for a linear sequence of amino acids
on a polypeptide. Each group of three bases is a codon (Johnson-Green, 2002).
The gene is the basic functional unit of inheritance and each gene consists of a
DNA molecule which enables an organism to make a particular protein together with the
“molecular switches” that determine when and where each gene is active. The DNA
sequence (genetic code) of each gene specifies the protein to be made when the gene is
active (Robinson et al., 2000).
Genetic modification allows selected individual genes discovered in one organism
to be inserted directly into another. This can be a related or unrelated species. Since the
way particular genes function is similar in most organisms, genes or part of genes from one
organism can generally be transferred to any other organism. The transferred gene is called
the transgene. Genetic modification can be used to promote a desirable crop character or to
suppress an undesirable trait. The technology is also sometimes called gene technology,
recombinant DNA technology or genetic engineering. Practical and functional methods
have now been developed to modify most of our major crops (Nuffield Council on
Bioethics, 2003). Furthermore, in the development of gene technology, DNA can be
isolated from an organism and its sequence (genetic code) determined. DNA molecules can
be chemically synthesized and can be copied in a test tube or by using bacteria as “DNA
factories” to multiply specific DNA molecules. In this way, individual genes can be
identified and new combinations of genetic material can be made. The order of the four
constituent bases that make up DNA (its sequence) determines what product the gene will
make in a cell, but the chemical and physical properties of DNA are essentially the same in
all organisms. This common feature of DNA makes it possible to transfer genes from one
organism to another. There is significant overlap in genes across a wide range of organisms;
for example, bacteria, fungi, plants and animals all contain the same basic set of genes
responsible for cell synthesis and function (Robinson et al., 2000).
The major breakthrough in the development of recombinant DNA technology was
the ability to clone genes. This refers to the process of isolating a specific gene from an
organism’s genome (the entire set of genetic information in an organism).

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Agricultural Biotechnology in China: A National Goal 25
In general terms, genes are usually cloned by inserting fragments of a genome into
a vector. A vector is an agent that can be used to move DNA segments from one organism
to another.
Plasmids, small circular double-stranded DNA molecules that are capable of
replication within their host cell, are commonly used as vectors. Once a plasmid vector has
been inserted into a cell, the cell that contains the desired gene can be located and
separated from cells that contain other fragments of DNA.
Gene cloning allows careful study of a gene’s sequence and properties, and it also
allows the gene to be transferred to a wide variety of organisms. Thus, a gene isolated from
a bacterium can be transferred to another bacterium, a plant, or an animal. In some cases,
gene transfer is relatively easy; in others (e.g., inserting a gene into a multicellular animal),
it is much more challenging and complex. A defining feature of molecular biotechnology is
the ability to transfer specific genes from organism to organism without the restrictions of
incompatibility that otherwise apply (e.g., animals will breed successfully only with
animals of the same species) (Johnson-Green, 2002).
The basic techniques of gene cloning were developed in the mid-1970s. A product
of direct gene transfer is considered to be recombinant, because its genome now consists of
DNA from different organisms. The transfer process is known as genetic engineering, and
in the popular media, the products are known as genetically modified organisms (GMOs).
GMOs are often described as “transgenic”; that is, they contain genetic material from
another organism.

3.2 – Comparing Traditional Breeding with Modern Biotechnology
Around ten to twelve thousands years ago humans began to cultivate plants and
herd animals for food. They probably also began to breed these crops and animals. Over
succeeding generations, the nutritional qualities of various plants and animals were
stabilised and improved. Continued cross breeding and selection, conducted mainly by
farmers for desirable traits in plants and animals, have resulted in slow improvement in
domestic species (Abdalla et al., 2003)
Conventional plant breeding involves cross-hybridization between two parents and
selection of the best offspring for further breeding. In this process, large blocks of genetic

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material (i.e. thousands of genes) are mixed, generating numerous new combinations of
genes. Over several successive generations, plant breeders are able to introduce and
stabilize new genes, such as those providing disease resistance from a wild relative, into
existing varieties and then gradually remove most of the unwanted new genes that were
also transferred in the first cross (Robinson et al., 2000).
In the mid-1970s, plant scientists were quick to see the potential of recombinant
DNA technology to revolutionize plant breeding.
Conventional plant breeding is often understood as the selection of particular
individuals from a great variety of naturally occurring types of plants. This activity tends to
be seen as natural. Many would also view the systematic interbreeding of naturally
occurring types of plants in the same vein. However, plant breeders also create plants
which would not be achievable by judicious interbreeding, using techniques such as wide-
crossing. This has led to completely new varieties such as Triticale (a hybrid between
wheat and rye). Another technique, mutation breeding, involves the exposure of plants and
seeds to radiation or chemical substances. These procedures have been, and still are being
used to produce many important staple crops around the world. Thus, it is important to
note that the deliberate alteration of plants as they occur in nature has been practised and
accepted for several decades. In this context, genetic modification can be seen as a new
means to achieve the same end; it is certainly used in that way. It differs from conventional
plant breeding in that it can allow for much faster and more precise ways of producing
improved crops (Nuffield Council on Bioethics, 2003).
The application of recombinant DNA technology to facilitate genetic exchange in
crops has several advantages over traditional breeding methods. The exchange is far more
precise because only a single (or at most, a few), specific gene that has been identified as
providing a useful trait is being transferred to the recipient plant. As a result, there is no
inclusion of ancillary, unwanted traits that need to be eliminated in subsequent generations,
as often happens with traditional plant breeding (Persley et al., 1999).
Application of recombinant DNA technology to plant breeding also allows more
rapid development of varieties containing new and desirable traits. Further, the specific
gene being transferred is known so the genetic change taking place to bring about a desired
trait also is known, which often is not the case with traditional breeding methods where the
fundamental basis of the trait being introduced may not be known at all. Finally, the ability

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to transfer genes from any other plant or other organism into a chosen recipient means that
the entire span of genetic capabilities available among all biological organisms has the
potential to be genetically transferred or used in any other organism. This markedly
expands the range of useful traits that ultimately can be applied to the development of new
crop varieties (Persley et al., 1999). Therefore, the major advantage of the transgenic
approach over traditional approaches is that theoretically any organism can be a source of
transferred genetic material.
Genes can be transferred from distantly related plants, from bacteria, fungi, or
viruses, and even from animals. Furthermore, the potential exists for exquisite control over
the activity of transferred genes, in terms of the amount and the timing of gene expression
(Johnson-Green, 2002).
In nature, there are a few instances where genetic material is transferred from one
organism to another – usually by a form of infection. One of the most common methods
used to insert genes into a plant exploits the natural ability of the gall forming soil
bacterium, Agrobacterium tumefaciens, to incorporate its DNA into a host plant (Robinson
et al., 2000).
Agrobacterium naturally infects a wide range of plants and it does so by inserting
some of its own DNA directly into the DNA of the plant. By taking out the undesired traits
associated with Agrobacterium infection and inserting a gene(s) of interest into the
Agrobacterium DNA that will ultimately be incorporated into the plant’s DNA where they
are inserted into chromosomes to become a permanent part of the genome (any desired
gene can be transferred into a plant’s DNA following bacterial infection). The cells
containing the new gene subsequently can be identified and grown using plant cell culture
technology into a whole plant that now contains the new transgene incorporated into its
DNA (Persley et al., 1999).

3.3 – Transgenic Plants
Genetic modification of plants involves the targeted introduction of a small number
of selected genes (usually two) into an existing plant variety to affect its performance. This
will normally involve the target gene, which will improve the plant, plus a selectable
marker gene to allow scientists to rapidly identify and isolate those cells that have taken up

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Agricultural Biotechnology in China: A National Goal 28
the target gene. To date, the marker genes most commonly used produce a characteristic,
such as herbicide or antibiotic resistance, to allow positive selection of the GM cells. New
marker genes are presently being developed that do not involve antibiotic or herbicide
resistance and are only manifested in the laboratory. In some crops, it is also possible to
delete the marker gene after the genetic modification has been achieved. Both the target
and marker genes will have controlling elements (promoters and terminators) that are the
“molecular switches” to control when the genes are turned on and off and to specify the
tissues where the genes will be active. The controlling elements from plant virus genes
have been found to be effective in plants and are often used to switch on the introduced
genes (Robinson et al., 2000).
Although several methods of plant transformation have been used, only two are
relevant today to the transformation of food crops. These are the biolistics or “gene gun”
and Agrobacterium. Since both these methods have been patented, we can expect that other
methods will continue to be developed in order to circumvent these patents. Both methods
have advantages and disadvantages, depending on the application and the crop (Nuffield
Council on Bioethics, 1999).
In the biolistics or “gene gun” method, gold or tungsten micro-particles are coated
with transgene constructs and fired into target cells or tissues. Initially the projectiles were
propelled by gunpowder. Later versions of the “gene gun” have used compressed helium
gas or electro-volatilized water propulsion (Nuffield Council on Bioethics, 1999 and
Widhom, 2001). One or more copies of the transgene construct are integrated into the
chromosomes of the target cells. Such methods initially required a sophisticated laboratory
environment. However, portable hand-held guns have recently been developed to make the
technology more widely available (Nuffield Council on Bioethics, 1999).
The other commonly used method utilizes the natural genetic engineer, a bacterium,
Agrobacterium tumefaciens, which can transfer a defined piece of its own DNA into plant
cells at wound sites. Normally the DNA placed in the plant cells by A. tumefaciens carries
genes to make plant growth hormones, causing abnormal tissue growth to produce galls,
resulting in the so-called crown gall disease (Widhom, 2001). The attenuated strains used
as carriers or vectors by plant genetic engineers have had their plant gall-inducing ability
removed. The modified vector is then transformed to carry the engineered gene constructs
before being introduced into a host plant cell. The new genes then integrate into the host

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DNA of the plant (Nuffield Council on Bioethics, 1999). It was initially assumed that A.
tumefaciens could only transfer DNA to dicotyledonous plants such as tobacco and grapes
since crown gall disease was not found on monocotyledonous crops such as cereals.
However, recent research has shown that A. tumefaciens can insert genes into cereals such
as rice (Widhom, 2001).
This method has the advantage that it is relatively simple and can be applied by any
laboratory with suitable tissue culture facilities. Occasionally, DNA from the bacteria may
get transferred in addition to the transgene and it is possible that the carrier itself may
persist in or on transformed plants for up to a year after transformation. These technical
difficulties have been criticised as the inadvertent transfer of genetic material and the
introduction of live-engineered bacteria into the environment (Nuffield Council on
Bioethics, 1999).
The use of A. tumefaciens has an important advantage over biolistics. The
bombardment procedure often inserts multiple gene copies that can be rearranged in
undesirable ways while the A. tumefaciens system in more likely to result in the insertion
of one copy of the correct, full-length DNA fragment since the bacterium has the ability to
direct the specific fragment to the plant nucleous (Widhom, 2001).
All plant transformation methods in use today suffer from the fact that the
transgene(s) cannot be directed to any particular point on the host chromosomes.
Incorporation into the host DNA is more or less at random. Since the location of the
transgene in the host’s DNA can affect the efficiency with which it is expressed, it is often
necessary for the researcher to produce many individual transgenic plants to ensure that an
effective breeding group or line with the desired characteristics can be selected from them.
These plants will then be bred conventionally (Nuffield Council on Bioethics, 1999).
The most widely used transgenic pest-protected plants express insecticidal proteins
derived from the bacterium Bacillus thuringiensis (Bt). Bt is a naturally occurring soil-
borne bacterium found worldwide. Bt forms asexual reproductive cells, called spores,
which enable it to survive in adverse conditions. During the process of spore formation, Bt
also produces unique crystal-like or “Cry” proteins. When eaten by a susceptible insect
during its feeding stage of development (as larvae), the crystal acts as poison. The insect’s
digestive enzymes activate the toxin. The “Cry” proteins bind to specific receptors on the

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Agricultural Biotechnology in China: A National Goal 30
intestinal lining and rupture the cells. Insects stop feeding within two hours of a first bite
and if enough toxin is eaten, die within two or three days (Nelson, 2001).
A unique feature of Bt as a pesticide is that a specific “Cry” protein is toxic only to
specific groups of insects and has no effect on mammals. These characteristics make
various Bt insecticides very desirable generally and crucial to the organic food industry
(Nelson, 2001).

3.3.1 – Introduced Traits by Genetic Engineering
Most commonly, the improvement of plants aims to increase the yield or quality of
crops. Yield is influenced by many factors including pests, diseases, soil conditions, or
abiotic stresses which stem from unfavourable climatic conditions. Significant
improvements can often be achieved by means of irrigation, the application of insecticides
or pesticides and the addition of fertiliser. However, most of these interventions are
expensive, particularly for small-scale farmers in developing countries. The use of genetic
modification provides plant breeders with new opportunities to produce crops that are
protected from environmental stresses and attacks from pathogens and insects. The
following list gives examples of traits that researchers aim to develop by means of genetic
modification. Some of these are still in early stages of development, while others have
been achieved more recently in the laboratory setting. A few are in field trials, or can
already be found in crops used by farmers. In some cases the traits can be arrived at by
conventional breeding, while others are achievable only by genetic modification.
• Herbicide tolerance crops The mostly wide adopted bioengineered crops have been those with herbicide-tolerant traits. These crops were developed to survive the
application of specific herbicides that previously would have destroyed the crop
along with the targeted weeds, and provide farmers a broader variety of herbicide
options for effective weed control. A transgene confers tolerance to a specific
herbicide. This trait allows farmers to apply a herbicide which acts on a wide range
of weeds while not affecting the modified crop. The most common herbicide
tolerant crops are crops resistant to glyphosate, an herbicide effective on many
species of grasses, broadleaf weeds, and sedges. Glyphosate tolerance has been
incorporated into soybeans, corn, canola, and cotton. Other GE herbicide-tolerant

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crops include corn that is resistant to glufosinate-ammonium, and cotton that is
resistant to bromoxynil. The adoption of most herbicide-tolerant crops has been
particularly rapid and are mainly grown in developed countries with the primary
aim of reducing applications of herbicides (Fernandez-Cornejo et al., 2002 and
Nuffield Council on Bioethics, 1999). According to proponents of HRCs, this
technology represents an innovation that enables farmers to simplify their weed
management requirements, by reducing herbicide use to post-emergence situations
using a single, broad-spectrum herbicide that breaks down relatively rapidly in the
soil. Herbicide candidates with such characteristics include glyphosate, bromoxynil,
sulfonylurea and imidazolinones, among others. However, in actuality the use of
herbicide-resistant crops is likely to increase herbicide use as well as production
costs. It is also likely to cause serious environmental problems (Altieri, 1999).
• Insect/pest resistance crops Crops inserted with insect-resistant traits have also been widely adopted. Bt crops containing the gene from a soil bacterium, Bacillus
thuringiensis, are the only insect-resistant crops commercially available. The
bacteria produce a protein that is toxic when ingested by certain Lepidopteran
insects (insects that go through a caterpillar stage). The Bt technology is a novel
approach to controlling insects because the insecticide is produced throughout the
plant over its entire life. Therefore, the insecticide is more effective than
conventional and biological insecticides because it cannot be washed off by rain or
broken down by other environmental factors. Bt has been built into several crops,
including corn and cotton. Bt corn provides protection mainly from the European
corn borer. Bt cotton is primarily effective in controlling the tobacco budworm, the
bollworm, and the pink bollworm (Fernandez-Cornejo et al., 2002).
• Bacterial, fungal and viral resistance Plants suffer from many diseases; some are physiological, caused by drought stress, mineral deprivation, and other
environmental causes, but infectious agents (pathogens) also cause disease,
reducing the amount of harvestable food by about 15% globally. In declining order
of importance, fungi, viruses, and bacteria are the pathogens responsible for
infectious plant disease, and fungi are responsible for most post-harvest food
spoilage. Here a transgene makes crops resistant to biotic stresses such as plant
pathogens which often reduce yields substantially. Examples of crops in which

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Agricultural Biotechnology in China: A National Goal 32
these traits are being introduced include coffee, bananas, cassava, potato, sweet
potato, beans, wheat, papaya, squash and melon. In some cases the transgenes used
are genes which occur naturally in the same species (Nuffield Council on Bioethics,
1999).
• Abiotic stress resistance In the past, plant breeders mainly concentrated on increasing yield, and rarely ventured to increase crop stress tolerance. However,
plant scientists have become increasingly aware that abiotic stresses have strong
effects on yield. Increasing stress tolerance of staple food crops is an important goal
for both traditional plant breeders and biotechnologists. The most serious abiotic
stress in most parts of the world is water availability. Dry or saline soil seriously
affects growth of crops. Dry soil is linked to climate, but saline soil is often
exacerbated by agricultural practices. Excessive irrigation, for example, can lead to
saline soil, because irrigation water always contains a certain level of ions; when
the soil dries, these ions become more concentrated and interfere with crop water
uptake (Johnson-Green, 2002). The ability of some plants to survive in harsh
climatic or soil conditions is sometimes associated with specific groups of genes.
These genes can be isolated and introduced into crops. Such applications promise
to be particularly valuable for developing countries, where abiotic stresses such as
drought, heat, frost and acidic or salty soils are common. Research on crops such as
cotton, coffee, rice, wheat, potato, Brassica, tomato and barley varieties is currently
in different stages of completion (Nuffield Council on Bioethics, 1999).
• Micronutrient enrichment In aiming to prevent malnutrition, transgenes could play a vital role in the provision of vitamins or minerals. GM crops could help to
provide people with essential micronutrients through consumption of their main
staple crop. Research in this area is currently being undertaken in rice, cassava,
millet and potato (Nuffield Council on Bioethics, 2003). Recent research in
Switzerland, funded by the Rockefeller Foundation, shows the potential of modern
biotechnology to address developing country micronutrient malnutrition problems.
A gene that enhances vitamin A production was inserted into rice using a gene from
a daffodil, and in a separate experiment, the bioavailability of iron for human
consumption was also increased by introduction of a gene from a French bean. The
potential of these advances is enormous. More than 2 billion people are anemic due

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Agricultural Biotechnology in China: A National Goal 33
to iron deficiency. In developing countries, 180 million children die annually from
diseases linked to vitamin A deficiency, especially in Asia, where poor children are
weaned on rice gruel (McCalla and Brown, 2000).







Chapter II Risks and Benefits of Agricultural Biotechnology





Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 35
1 – Risks and Benefits of Agricultural Biotechnology
As with any science and technology, biotechnology can bring with it benefits and
risks. It is the risks of agricultural biotechnology that have received widespread publicity in
the media even though biotechnology has also been applied to health and industrial sectors.
Environmental non-government organizations (NGOs) have been particularly vocal in
taking issue with the new technologies derived from or incorporating GMOs. As a
consequence, in the public debate biotechnology has become synonymous with GMOs,
although they are only one of the many products of biotechnology.
A number of food-related crises in recent years have made consumers particularly
sensitive about food safety issues. Health and food safety concerns are again at the
forefront in Europe following additional cases of mad cow disease (bovine spongiform
encephalopathy) and the banning throughout the European Union of blood and bone meal
in feed for all animals. These crises have not been caused by GMOs, but by the
intensification of agriculture and food production, a fact that appears to have escaped
public attention. In Europe in particular, demands have been made for informative food
labeling so that consumers may, if they wish, avoid genetically modified foods. The anti-
GMO movement reveals profound mistrust of developments in science and technology and
of the forces seen to be driving them (ADB, 2001).
Opposition to biotechnology and specifically to genetic engineering is derived from
several viewpoints. They include fears of high-tech farming destroying the livelihood of
smallholders, concerns about artificially created products competing with and destroying
the marketability of “natural” products, and the presumption of environmental threat.
Many critics fear that biotechnology is a scientists’ obsession which is being exploited to
bring quick profits to the few even though it can do great harm to the many. Those who
hold such views are profoundly concerned that the increased application of biotechnology
will harm not only ourselves but even generations of the future. These concerns are
genuine and cannot be ignored (Serageldin, 2000).
In considering the potential risks and benefits of modern biotechnology, it is useful
to distinguish technology-inherent and technology-transcending risks. This distinction is of
utmost importance in any attempt to reason out the risks arising from biotechnology.
Whether this new technology promises to be the key technological paradigm in the fight

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 36
for food security and reducing poverty depends on how its risks are perceived,
disentangled, and accordingly addressed (Leisinger, 2000). Technology-inherent risks are
those where the technology itself has potential risks to human health, ecology, and the
environment. Technology-transcending risks include those that are not specific to the
technology but where its use may have risks. For biotechnology these include the risk of
increasing the poverty gap within and between societies, reducing biodiversity, and
antitrust and international trade issues (Persley, 2000).

2 - Technology Inherent Risks
For genetically improved organisms, the risks classified as inherent in the
technology are frequently summarized as biosafety risks. Most countries with
biotechnological-based industries have sophisticated legislation in place intended to ensure
the safe transfer, handling, use, and disposal of such organisms and their products. But
even with the best procedures and regulations in place, some risks will remain. Risks—
calculable risks—must be taken, otherwise technological progress becomes impossible.
There is always the possibility, no matter how slim, that something could go wrong
(Leisinger, 2000).
Especially in the discussion about genetic engineering, concerns have been
expressed that the direct change in an organism's genome causes new, unforeseeable and
unwarrantable large risks for humans and environment. Since human knowledge is limited
the possible existence of such unknown risks cannot be ruled out with absolute certainty
neither in the case of genetic engineering nor in the case of any other technology. However,
at current knowledge it can be stated that genetically modified plants are not per se more
dangerous than conventionally bread ones. Risk assessment can therefore not be conducted
for genetic engineering in general or biotechnology as a whole, but has to be performed
specifically for each single technology product under respective local frame conditions.

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 37
2.1 - Risks to Human Health
Some commentators take the view that possible risks of GM crops for human health
have not yet been sufficiently examined. In a common, but controversial, interpretation of
what is known as the “precautionary principle”, critics argue that GM crops should not be
used anywhere unless there is a guarantee that no risk will arise.
Some of the debate about GM crops concerns the marker genes co-introduced with
the transgenes. Several exotic markers have been used as research tools, for instance, GUS,
a gene encoding ß-glucuronidase, can be identified in stained material by a blue colour.
However, in practical plant improvement programs, markers have been largely restricted to
proteins providing resistance to herbicides or antibiotics. Putative transformants can be
sprayed with, or grown on, media containing the appropriate chemical. Transformed plants
are identified as those that survive. Critics of GM technology argue that even if marker
genes are avoided, the resulting lines are still likely to contain small segments of non-
coding, non-native DNA, which initially flanked the construct in the vector. The presence,
size and any possible function of such inserts are always considered in the UK regulatory
approval process.
Markers are used only to make the detection of transgenic plants easier. Removal of
marker genes from such plants is technically possible but extremely difficult, although
methods are being developed to do just this. However, in situations where the presence of
the transgene itself can be detected easily or when efficiencies in transgenic production
become high enough, then the use of markers can be dispensed with. Efficiencies as high
as 5% are now being obtained and, at these rates, it is feasible to screen directly for the
unique DNA sequence that describes any gene. It is likely, therefore, that selectable
markers (which include genes that confer antibiotic resistance) will cease to be an issue
with the next generation of transgenic releases (Nuffield Council on Bioethics, 1999).
Since the advent of GM technology, researchers have used antibiotic resistance
genes as selective markers for the process of genetic modification. Bengtsson (1997)
quoted in Robinson (1999) maintained that as some crop varieties will be transformed
many times, antibiotic resistance genes will accumulate, and it is therefore sensible to
remove them as plant breeders will soon encounter difficulties in locating new, harmless
antibiotic marker genes.

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 38
The concern has been raised that the widespread use of such genes in plants could
increase the antibiotic resistance of human pathogens. Kanamycin, one of the most
commonly used resistance markers for plant transformation, is still used for the treatment
of the following human infections: bone, respiratory tract, skin, soft-tissue, and abdominal
infections, complicated urinary tract infections, endocarditis, septicemia, and
enterococcalinfections.
Scientists now have the means to remove these marker genes before a crop plant is
developed for commercial use. Developers should continue to move rapidly to remove all
such markers from transgenic plants and to utilize alternative markers for the selection of
new varieties. No definitive evidence exists that these antibiotic resistance genes cause
harm to humans, but because of public concerns, all those involved in the development of
transgenic plants should move quickly to eliminate these markers (National Academy of
Sciences, 2000).
Other principal concerns are that transgenic foods will be toxic or allergenic.
Genetically improved crops and food, and the risk of allergens associated with them, are
now a concern throughout the world, especially in industrial countries. More than 90
percent of food allergens that occur in 2 percent of adults and 4 percent of children are
associated with eight food groups. Allergenicity of genetically improved foods can be
raised in crops and foods either by raising the level of endogenous allergen or by
introducing a new allergen. Assessment of the risk of allergens is a challenge (Persley,
2000).
Franck-Oberaspach and Keller (1997) quoted in Robinson (1999) reviewed the
consequences of classical and biotechnological resistance breeding for food toxicology and
allergenicity. They reported on many classes of actual and putative toxins and allergens,
concluding that several naturally occurring defence substances found in plants are highly
toxic to mammals, but also indicating that food safety can be severely influenced by
natural pathogens and their products. It is interesting how little we yet know about the
toxicity of non-engineered foods. Known toxins and allergens can be screened for in
advance however to reduce the chances of releasing potentially dangerous foods. Careful
labelling of products would be informative for customers with allergies and for those
averse to buying a product derived from a transgenic crop.

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 39
Based on data like the one presented above, the International Life Sciences Institute
(ILSI) has developed a decision tree that provides framework for risk assessment (Lehrer
2000). It uses the following criterion: that an introduced protein in a food is not a concern
if there is (1) no history of common allergenicity, (2) no similar amino acid sequence to
known allergens, (3) rapid digestion of the protein, and (4) the protein is expressed at low
levels. Protocols enable assembly of the data to judge food against this criterion. It is also
important to inform consumers of any potential risk. A key concern of consumers is being
able to identify where allergens are found. Therefore, consumers want to know where the
potential for food allergens exists. Any protein added to food should be assessed for
potential allergenicity, whether it is added by genetic engineering or by manufacturing.
There are several related areas of concern with regard to potential human health risks of
genetically improved foods: toxicity, carcinogenicity, food intolerances; the risk of the use
of gene markers for antibiotic resistance; other macromolecules aside from protein that
could be potential allergens; and nutritional value. Methods of testing and evaluating risks
of toxicity and carcinogenicity are well established for food. The question remains as to
whether developing countries can implement and use currently available technologies and
protocols to assess food allergens and other health risks. The techniques are well
established, and should be readily implementable by trained professionals.
There is one documented case where genetic modification involving transfer of a
gene from the Brazil nut to soybean also led to transfer of allergenicity. Blood serum from
people known to be allergic to Brazil nuts was tested for the appropriate antibody response
to the transferred gene. Seven out of nine individuals showed a positive response. This
adverse result alerted the company and the work was discontinued so the product was not
even submitted to the regulatory authorities. The potential allergenicity of proteins
expressed by novel genes is now a routine part of safety assessment procedures and that
there are many databases of known allergens that could help identify proteins that may be
problematic if inserted into food products.
When an application to market a GM variety for cultivation in the EU is submitted,
information on likely toxic or allergenic effects must be included in the application.
Continued care is needed in this area, and if there is any reason to suspect an allergenicity
problem, then the appropriate health network can be alerted. It should be noted that the EU
Novel Food Regulations specifically require that products must be clearly labelled if they

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 40
contain genes that may result in toxicity or allergenicity, particularly if such genes would
not normally be expected to occur in the food (Nuffield Council on Bioethics, 1999).
Although no clear cases of harmful effects on human health have been documented
from new genetically improved food, that does not mean that risks do not exist and they
should be assessed on a case by case (Persley, 2000).

2.2 - Environmental Risks
The potential impact of GM crops on the environment has received much attention
in recent years from the scientific community. Altieri (2000) and others have argued that
the transmission of genetic material from GMOs could have adverse effects on the
environment as well as on crop production. On the environmental risk, one of the major
concerns is the possible transmission of transgenes to the wild relatives of the GM crop
through crossbreeding. Of particular concern is the potential development of “superweeds”
as a result of wild plants acquiring the genes that are responsible for herbicide resistance
over time. This could result in these species outcompeting wild species and causing a
reduction in biodiversity. Also, control of these “superweeds” would come at a higher cost
to the farmer and might have a negative impact on farm productivity.
There are also concerns that pesticide resistant crops could have negative effects on
non-target insect species. For example, there have been claims that, in North America,
windblown pollen from Bt corn fields landing on surrounding vegetation could kill the
larvae of Monarch butterflies feeding on milkweed (Losey, Rayor and Carter 1999 quoted
in Abdalla et al., 2003). However, being relatively heavy, corn pollens do not disperse
widely and the possible impact of Bt crops on nontarget species is generally recognised as
being far less than the impact of conventional area spraying of pesticides that can affect a
wider spectrum of insects. Based on a two year study, Sears et al. (2001) quoted in Abdalla
et al. (2003) concluded that the impact of Bt corn pollen on Monarch butterfly populations
is negligible.
In the case of vertical gene transfer – i.e. the out-crossing of genes of transgenic
crops into wild relatives by pollen – the risk can, however, be greater in developing
countries than in industrialised countries. This is because of the fact that in developing
regions are the centres of genetic diversity of most domesticated crops. While in temperate

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 41
regions only few wild relatives of agronomically important species occur, there are far
more sexually compatible partners in the natural environment of tropical regions, so that a
vertical gene-transfer is more likely. Findings from risk studies that are carried out in
industrialised countries cannot simply be transferred to countries of the South. This shows
clearly that in developing countries great care has to be taken in defining appropriate rules
for biosafety as well as in the establishment of effective structures for their implementation.
This applies just the same for the area of food-safety.
Such rules have to fulfil mainly two criteria. Firstly a responsible, locally adapted handling
of the technology needs to be ensured; secondly limitations for technical advancement
should not be too tight. The identification of risk must not automatically mean to relinquish
the technology. Risks have to be judged realistically and always be set in relation to the
potential benefit of a technology which includes possible benefits to the environment.
The support of establishing and enforcing suitable mechanisms for regulation
within partnering countries also represents an important starting point for developmental
co-operation. The development of a regulatory structure is as important as the qualification
of specialists and the strengthening of national institutions and structures to ensure the
enforcement by operational control and regulatory processes (GTZ, 1999).

3 - Technology Transcending Risks
Technology-transcending risks, as opposed to technology-inherent risks, emanate
from the political and social context in which a technology is used (Leisinger, 2000). In
other words, technology transcending risks include problems that can be triggered by the
technology but have its cause in the social, economical and political frame conditions. It
has to be clear that technology alone is an inadequate instrument for removing social
grievances.
3.1 – Socioeconomic Risks
In developing countries, these risks spring from both the course the global economy
takes and country-specific political and social circumstances. The most critical risks have
to do with three issues: aggravation of the prosperity gap between industrial and

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 42
developing countries, growth in the disparity in income and wealth distribution within poor
societies, and loss of biodiversity.
Modern biotechnology research and development (R&D) has been conducted in an
institutional and economic environment that differs significantly from the development of
the earlier Green Revolution technologies. While the latter were essentially the prerogative
of public research institutions and philanthropic foundations, developments in
biotechnology have been driven essentially as a competitive, commercial endeavour in
which powerful private sector actors compete (ADB, 2001).
The major socioeconomic risk of agricultural biotechnology stems from the fact
that the research, development, commercialization, and distribution of new
biotechnological products have been carried out mainly in developed countries by a few,
large, multinational companies. These companies have focused on temperate crops for
large farmers in developed countries. Undertaking R&D on Asia’s basic food crops for
small farmers in rainfed and marginal areas is of little interest because they see limited
returns from such investments. Furthermore, in rural family farms the frame conditions for
acceptance of technologies are often less favourable. For example, poor households
generally have less access to information and extension services that are crucial for the
adoption of technical innovations; temporary financial limitations at the time of sowing can
also aggravate the acceptance of technologies by small holdings with little resources even
if the technology is generally profitable. Adequate access to agricultural extension service
and credits as well as a well functioning seed market by which the technology reaches
farmers are important prerequisites, so that unintended aspects of distribution within a
country can be prevented. National technology politics must also not be restricted to
research but has to explicitly include the area of technology distribution and application.
If this trend continues, modern biotechnology will aggravate the income disparity
between developed and developing countries, and between large and small farmers. Unless
countries have policies in place to ensure that small farmers have access to delivery
systems, extension services, productive resources, markets, and infrastructure, there is a
risk that the introduction of agricultural biotechnology could lead to increased inequality of
income and wealth. In such cases, larger farmers are likely to capture most of the benefits
through early adoption of the technology, expanded production, and reduced unit costs
(Persley, 2000).

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 43
3.2 – Risk of Loss of Biodiversity
The reduction of biodiversity is a technology transcending risk. The reduction of
biological diversity due to the destruction of tropical forests, conversion of more land to
agriculture, overfishing, and the other practices to feed a growing world population is more
significant than any potential loss of biodiversity due to the adoption of genetically
modified crop varieties. This is not an issue restricted to transgenic crops. Farmers have
adopted new commercially developed varieties in the past and will continue to do so when
they perceive this to be to their advantage (Persley et al., 1999).
To slow the continuing loss of biodiversity, the main tasks are the preservation of
tropical forests, mangroves and other wetlands, rivers, lakes, and coral reefs. The fact that
farmers replace traditional varieties with superior varieties does not necessarily result in a
loss of biodiversity. Varieties that are under pressure of substitution also can be conserved
through in vivo and in vitro strategies. Improved governance and international support are
necessary to limit loss of biodiversity. Actually or potentially useful biological resources
should not be lost simply because we do not know or appreciate them at present (Leisinger,
1999).
A trend throughout most agricultural history is the ever-increasing production of
fewer crop species in what is called monoculture. Monoculture is the practice of planting
large acreages with a single type of crop. Limiting production to just one or a few crops
has the effect of reducing the crop diversity of our farmland. This trend has been due to
demands of the marketplace and the specialization of farming production systems. A factor
that has prevented some farmers from continuous monoculture production of certain crop
plants such as corn has been the need for crop rotation for insect and/or disease control.
More effective insect or disease control through biotechnology can make it easier and more
economical for farmers to grow the same crop year after year.
According to the dominant paradigm of production, diversity goes against
productivity, which creates an imperative for uniformity and monocultures. Agricultural
biotechnology promotes intensification of monocultures, and is thus more likely to erode
the environment than to heal it. Monocultures are ecologically unstable – this alone should
be enough to prevent them being viewed as essential to production.

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 44
Agricultural biodiversity is the basis of economic life for two-thirds of the world’s
population – those people who live in rural economies in the Third World. Biodiversity is
the means of livelihood and the means of production of the poor who have no access to
other assets or means of production (Shiva, 2000).
As food industry becomes more concentrated and integrated, uniformity is the
result, and the globalization of consumption patterns, by creating monocultures and
destroying diversity, has a devastating effect on the poorest on the planet. First, they are
pushed into deeper poverty by being forced to “compete” with globally powerful forces to
gain access to the local biological resources. Secondly, their economic alternatives outside
the global market are destroyed (Shiva, 2000).

4 - Benefits
The major potential benefits from the current generation of transgenic crops include
increases in productivity and higher yields. Herbicide tolerant and insect resistant crops
may lower chemical use in agricultural production. Results from a number of studies
(reported in US Department of Agriculture 2001) show significant increases in the net
returns to US farmers growing these crops. Depending on the crop variety and location, the
increases in returns stemmed from combinations of reductions in the use of chemical
inputs and farm fuel and, in many instances, increases in yield. Balanced against these cost
savings, growers have usually faced higher seed costs, with the need to purchase new seed
each season (Abdalla et al., 2003).
Reductions in the use of chemicals in agriculture also have favorable impacts on
human health and the environment. For example, Huang, Hu, Pray, Qiao and Rozelle
(2001) estimated the impact of Bt cotton in China. China approved Bt cotton for
cultivation in 1998. Two competing sets of Bt cotton varieties were approved for
cultivation in different provinces. Thus, the two sets of varieties are not allowed to
compete with each other. The first one is a set of varieties produced by the Chinese
Academy of Agricultural Sciences. The second is a set of cotton varieties produced and
introduced into China by a joint venture between Monsanto Corporation and a Chinese
partner. Estimations from these researchers indicate that Bt cotton in general has a
significant advantage over conventional cotton. In the surveys conducted in 1999 and 2000,

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 45
the authors reported that, on average, growers using Bt cotton reduced pesticide usefrom
55 to 16 kg of formulated product per hectare. In addition, Bt cotton adopters reduced the
number of insecticide sprays per crop from 20 to 7. In addition to a 70% pesticide
reduction, the authors also noted the almost complete elimination of highly toxic
organochlorine and organophosphate insecticides. Preliminary evidence in this study
suggests that the use of Bt cotton resulted in a significant positive effect on farmers’ health.
The authors noted that 30% of farmers who used conventional cotton varieties reported
health problems associated with spraying compared with only 9% who used Bt cotton. The
authors concluded that the evidence is quite clear that Bt cotton reduces pesticide use and
is likely to be beneficial to health and the environment.
Reductions in chemical applications also benefit the environment in other ways. By
reducing the need for conventional tillage necessary for weed control, herbicide tolerant
GM crops could be grown with minimum or no tillage. This would result in reductions in
farm fuel consumption. Besides lower costs to farmers, reductions in fuel use would
generate environmental benefits in terms of reductions in greenhouse gas emissions.
There are many potential benefits for poor people in developing countries.
Biotechnology may help achieve the productivity gains needed to feed a growing global
population, introduce resistance to pests and diseases without costly purchased inputs,
heighten crops’ tolerance to adverse weather and soil conditions, improve the nutritional
value of some foods, and enhance the durability of products during harvesting or shipping.
New crop varieties and biocontrol agents may reduce reliance on pesticides, thereby
reducing farmers’ crop protection costs and benefiting both the environment and public
health. Biotechnology may offer cost-effective solutions to micronutrient malnutrition,
such as vitamin A and iron-rich crops (Pinstrup-Andersen and Cohen, 2000). An example
of this is the development of “golden rice”, a crop that has been genetically modified to
produce vitamin A, which is necessary to reduce the incidence of blindness (due to vitamin
A deficiency) in children for whom rice makes up a disproportionate part of the diet.
The application of biotechnology in agriculture offers a wide range of potential
benefits, yet many of these benefits will not be realized unless a number of important
policy issues are resolved. Policies must ensure that a development-friendly environment
exists and that technological progress is oriented toward the needs of the poor, particularly
smallholders. All serious analyses admit concerns with regard to human health,

Chapter II – Risks and Benefits of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 46
environmental safety, and intellectual property rights (IPR), but the majority conclude
that—with a proper regulatory regimen enforced—benefits are likely to greatly outstrip
concerns, so that ethically there should be every effort to realize these benefits. Continued
research on all aspects of genetic engineering and biotechnology is necessary to maximize
benefits and minimize risks. Whatever helps to address public concerns and regain public
confidence for genetic engineering and biotechnology must be done, because in the end, in
pluralistic democratic societies, it is social acceptance that makes success feasible
(Leisinger, 2000).

5 - Summary
Whether the European public becomes as accepting of GM foods as the American
public will depend on changed perceptions of the risks to human health and the
environment. Such changes will hinge on reliable communication of information from
scientists, policy makers, industry and the press. It might require that there is more public
participation in agricultural research planning in the future. Thus, clear thinking, scientific
information, and realistic views to minimize the risks and maximize the benefits are
needed.
Biotechnology could give us a future where perennial crops have in-built resistance
to pests and diseases, fix their own nitrogen, and give higher yields. However, this calls for
a cautious case-by-case approach to address legitimate concerns for the biosafety of each
product or process prior to its release. The possible effects on biodiversity, the
environment and food safety need to be evaluated, and the extent to which the benefits of
the product or process outweigh its risks assessed. The evaluation process should also take
into consideration experience gained by national regulatory authorities in clearing such
products. Careful monitoring of the post-release effects of these products and processes is
also essential to ensure their continued safety to human beings, animals and the
environment.






Chapter III Role of Agricultural Biotechnology





Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 48
1 – The Green Revolution
The Green Revolution occurred during the 1960s and 70s, it was a planned
international effort funded by the Rockefeller Foundation, the Ford Foundation and many
developing country governments. Its purpose was to eliminate hunger by improving crop
performance. This was central to agricultural development debates in the 1960s and 1970s
and was the basis for the foundation of the International Agricultural Research Centres
who were to spearhead a publicly/philanthropically funded drive to increase food
production in the developing world.
Beginning in the 1960s, advances in classical crop breeding and farm management
techniques resulted in massive growth in cereal crop production, and came to be known as
the Green Revolution. The Green Revolution was driven by a need to increase land
productivity in areas with growing land scarcity and/or high cost land. Increased
production was also achieved through a considerable amount of investment in agricultural
research and infrastructure development, particularly in irrigation.
The Green Revolution of the 1960s and 1970s introduced higher-yielding varieties
(HYVs) of staple food crops, new tilling methods and increased use of chemical inputs.
Along with these technical innovations, modernizers promoted commercial, export-based
agriculture using loans, technical advisors, aid programs, tax incentives, advertising and
military support. Despite these innovations, overall food production more than kept pace
with population growth. These food production increases were achieved largely by the
cultivation of high-yielding varieties (HYVs) of rice and wheat, accompanied by expansion
of irrigated areas, increases in fertilizer and pesticide use, and greater availability of credit.
The scientific basis for the Green Revolution stemmed from national and
international research programs that led to the development and distribution of new HYVs,
particularly of rice and wheat (Asian Development Bank, 2001).
The key elements in improving food security in Asia from 1970-95 were
government policies reflecting a belief that investments in increasing agricultural
productivity were a prerequisite to economic development. These national policies were
supported by political leaders in Asia and by both the public and private sectors of the
international community. This mix of supportive public policies, scientific discoveries, and
public and private investments in rural Asia, particularly in irrigation, credit, and inputs,

Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 49
led to substantial reductions in poverty and improved food security throughout Asia over
the past 30 years. Increased agricultural productivity, rapid industrial growth, and
expansion of the nonfarm rural economy have all contributed to almost a tripling of per
capita gross domestic product across Asia since 1970 (Pinstrup-Andersen and Cohen,
2000).
In other words, the Green Revolution of the 1960s and 1970s helped many
developing countries such as India and China become agriculturally self-sufficient, net
exporters of food in the last three decades. The increased productivity has been
accompanied by a subsequent increase in personal income and stimulus to national
economies.
Despite these successes, problems remain. The intensification of agriculture and the
reliance on irrigation and chemical inputs has led to environmental degradation, increased
salinity, and pesticide misuse. Deforestation, overgrazing, and overfishing also threaten the
sustainable use of natural resources.
What is more, the Green Revolution technologies had little impact on the millions
of smallholders living in rainfed and marginal areas, where poverty is concentrated.
Furthermore, the Green Revolution has already run its course in much of Asia. Wheat and
rice yields in the major growing areas of Asia have been stagnant or declining for the past
decade, while population continues to increase (Asian Development Bank, 2001).
The much heralded Green Revolution was an example of the failure of new
technology applied to farming to reduce hunger. Using the technology, developing
countries significantly increased crop yields, but they nevertheless failed to eliminate
hunger, because they failed to address the root social and economic causes of hunger.
Furthermore, the Green Revolution exacerbated poverty and social inequality. If favored
larger, wealthier farmers who could afford the new high yielding crop varieties and the
chemical fertilizers, pesticides, and irrigation systems that accompanied them. Left behind
were poorer farmers unable to afford such inputs. In the meantime, the heavy use of
chemical fertilizers and pesticides generated resistant pests and degraded the fertility of the
soil, undermining the very basis for future production (Kucinich, 2001).
The key question that arises nowadays is whether the use of recombinant crops will
accentuate the positive or negative aspects of the Green Revolution. It led to enormous
increases in agricultural productivity, but at the cost of increased economic disparity

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Agricultural Biotechnology in China: A National Goal 50
among farmers and increased reliance on technology and chemicals supplied by
corporations from industrialized nations. Because most recombinant crops have been
developed by corporate interests that are relatively uninterested in creating crops that are
specifically tailored to agricultural problems in Asia, biotechnology may have a relatively
small impact on this part of the world. However, increased western support of agricultural
research in Asian countries could lead to the development of transgenic crops targeted to
specific agricultural problems in the developing world.
During the next 25 years, Asia will need a Second Green Revolution, commonly
denominated Biorevolution or Doubly Green Revolution. Conway (1997) pointed out that
the next technology-driven revolution must be doubly green—it must increase food
production at a faster rate than in recent years without significantly damaging the
environment. It must also increase incomes and increase access to food by the poor. The
major differences between the Green Revolution and Biorevolution can be characterized
the following features:
(i) Potentially many crops (particularly high value and specialty crops), will be
affected as well as livestock and aquaculture.
(ii) Potentially all areas, both irrigated and rainfed, will benefit from biotechnology
R&D.
(iii) Technology development and dissemination will substantially involve the
private sector with the public sector playing the role of facilitator and regulator.
(iv) Many processes and products will be patentable and protectable.
(v) Capital costs of research will be high.
(vi) Molecular and cell biology expertise will be required in addition to expertise in
conventional plant breeding and other agricultural sciences (ADB, 2001).
Nevertheless, some of these issues are embedded with controversy and ambiguity
among researchers, policymakers, government leaders and especially in public opinion
within some of the European countries.

2 – Poverty Alleviation and Food Security
In 2000, the world’s population was about 6 billion. It is expected to increase to 9
billion by 2050; 97% of this population increase will occur in the developing countries,

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Agricultural Biotechnology in China: A National Goal 51
with Asia being by far the most populous continent (James, 1996). About 1.2 billion
people, or one of every five humans, live in a state of absolute poverty, on the equivalent
of US$1/day or less (World Bank, 1999).
About 800 million people are food insecure (FAO, 1999), and 160 million
preschool children suffer from energy-protein malnutrition, which results in the death of
over 5 million children under the age of five each year (ACC/SCN, IFPRI, 1999). A much
larger number of people suffer from deficiencies of micronutrients such as iron and
vitamin A. Today, for example, iron deficiency anaemia affects an estimated 1.5 billion to
2.1 billion people, primarily women and children; over 200 million people are considered
to be vitamin A deficient; and iodine deficiency disorders affects between 740 million and
1500 million (Scoones, 2002). Food insecurity and malnutrition result in serious public
health problems and lost human potential in developing countries.
Most, perhaps 75 % of this nutritionally at-risk population live in rural agricultural
regions in developing countries.
Small-scale farmers in developing countries are faced with many problems and
constraints. Pre-and post-harvest crop losses due to insects, diseases, weeds, and droughts
result in low and fluctuating yields, as well as risks and fluctuations in incomes and food
availability. Low soil fertility and lack of access to reasonably priced plant nutrients, along
with acid, salinated, and waterlogged soils and other abiotic factors, contribute to low
yields, production risks, and degradation of natural resources as poor farmers try to eke out
a living. They are often forced to clear forest or farm ever more marginal land to cultivate
crops. Poor infrastructure and poorly functioning markets for inputs and outputs together
with lack of access to credit and technical assistance add to the impediments facing these
farmers (Pinstrup-Andersen and Cohen, 2000).
Family income is probably the single most important determinant of adequacy of
access to food. The World Food Summit in 2002 reaffirmed a commitment made by the
international community five years earlier to halve the number of hungry people by the
year 2015. That goal will not be met unless agricultural productivity and personal income
can be improved in the world’s poorest regions (Chassy, 2003).
The concept of “food security” has been defined in various ways. In the 1970s, food
security was used to refer to the availability of foodstuff in sufficient quantity at a global
level. During the course of the 1980s and 1990s, academics and non-government

Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 52
organizations (NGOs) pointed out the inadequacy of food security approaches rooted in
promoting global production levels and a country’s access to world markets for food alone.
They emphasised instead that food security approaches should guarantee livelihoods which
would generate sufficient food at the household level (Yamin, 2003).
At the 1996 Rome World Food Summit (WFS), the UN Food and Agricultural
Organisation (FAO) produced a new definition. The FAO definition of food security is
“food that is available at all times, that all persons have means of access to it, that it is
nutritionally adequate in terms of quantity, quality and variety and it is acceptable within
the given culture”. Although this definition tried to remedy earlier deficiencies, it is by no
means universally accepted (Yamin, 2003).
Because land and water for agriculture are diminishing resources, there is no option
but to produce more food and other agricultural comodities from less arable land, and
irrigation water. The need for more food has to be met through higher yields per units of
land, water, energy and time.
On a global basis the amount of cultivable land has decreased from 0.44 ha per
capita in 1961 to 0.26 ha in 1997 and is expected to fall further to 0.15 ha per capita by the
year 2050. Given the rate of expansion of arable land is now below 0.2% per annum and
continuing to fall, increasing productivity, through increasing production per unit area of
land, represents the only significant means for increasing food, feed and fiber production
(James, 1997).
Abiotic stresses and non-sustainable agricultural practices have led to decreased
productivity of agricultural land; this has been due to several factors including wind and
water erosion, salinization, overgrazing and overintensification.
With increasing population pressure in developing countries it has become
paramount to find ways of increasing productivity on existing agricultural lands if food
security is to improve and environmental damage is to be minimised. Advances in
agricultural biotechnology are widely considered to have a key role in fulfilling these
objectives (Abdalla et al., 2003). Equally important is the recognition of the need to evolve
and practice a sustainable system of agriculture that will increase productivity, conserve
natural resources and protect the environment. As such, agricultural biotechnology is a
potential means to enhance crop productivity in a environmentally sustainable way.

Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 53
It is often assumed that world food shortages can be eliminated by increasing food
and agricultural production through the application of modern technology. However, when
a new agricultural technology enters a system characterized by unequal power
relationships, it brings greater profits only to those who already have some combination of
land, finance resources, credit worthiness and political influence.
Although developing countries are gene-rich in terms of plant genetic resources
relevant to developing agriculture on a sustainable basis they are widely recognised to be
resource poor in terms of technological and institutional capabilities when compared with
developed countries. Such imbalances are part of the wider, on-going disparities between
developed and developing countries in terms of economic, political and military power.
Thus notwithstanding the fact that the World Food Summit Declaration states that the
“primary responsibility” for attaining food security rests with individual governments, the
ability of developing countries, acting alone, to achieve food security goals unaided is
compromised by many factors (Yamin, 2003).
Hunger persists today despite the fact that increases in food production during the
past 35 years have outstripped the world’s population growth by 16%. Indeed, the United
Nations Food and Agriculture Organization recently stated that growth in agriculture will
continue to outstrip world population growth. The Institute for Food Policy notes that there
is no relationship between the prevalence of hunger in a given country and its population
(Kucinich, 2001).
Hunger is a much more complicated phenomenon that can be rectified by
expanding agricultural production, although, in most instances, expanding agricultural
output is a necessary condition. This is true because issues concerning hunger reach the
heart of the nation’s political economies. The key obstacle to alleviating hunger is that the
rural poor population in most developing countries, who depend and live primarily on local
agricultural production, exercise little control over the prices they receive and the
productive resources they need for efficient production. When the control of resources is in
the hands of the actual farmers and tenants rather than in the hands of absentee landlords,
the farmers are likely to make efficient use of their land. When farmers own land and work
for themselves, they have the motivation to work hard to make the land more productive
(Gebremedhin, 1997).

Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 54
Most farmers are poor, with small land holdings. Productivity is low and agriculture
is subject to water, wind, and temperatures stresses. As such they are the farming systems
most likely to be adversely affected by global warming. Increasing smallholder agricultural
productivity in these areas will not only increase food supplies, but also will increase
smallholder incomes food access, reduce malnutrition, and improve living standards of the
poor (McCalla and Brown, 2000).
Accordingly to Robinson (1999), it is a commonly held view that transformation of
agriculture is a moral imperative for reducing poverty and hunger and promoting equity in
many of the world’s poorer countries. It is Malthusian preoccupations, feeding a human
population of ten billion in the foreseeable future, which represent the ethical justification
for employing such biotechnology. This presupposes that food shortage as such is the
principal cause of hunger, and ignores to some extent the reasons for poverty, inequitable
distribution of food, land tenure inequity, overpopulation, poor health, poor education etc.
In theory, cultivation of transgenic crops could, through intensification of agriculture,
contribute to increased agricultural production and therefore alleviate human hunger, while
promoting environmental conservation.
To increase food production by at least 40% within the next 25 years, Asian
countries not only have to move toward the best technological frontier (to push farmer’s
yields to the optimum level), but keep moving the technological frontier itself. As long as
product safety, environmental and ethical concerns, and intellectual property issues are
adequately addressed, modern agricultural biotechnology has the potential to significantly
increase the quantity and potential to significantly increase the quantity and quality of the
food supply for developing countries (Asian Development Bank, 2001).
Modern plant breeding may help to achieve productivity gains, introduce resistance
to pests and diseases, reduce pesticide use, improve crop tolerance for abiotic stress,
improve the nutritional value of some foods, and enhance the durability of products during
harvesting and shipping. Biotechnology may offer cost-effective solutions to vitamin and
mineral deficiencies by developing rice varieties that contain vitamin A and minerals.
Raising productivity could increase smallholders’ incomes, reduce poverty, increase food
access, reduce malnutrition, and improve the livelihoods of the poor. In the PRC, cotton
farmers that have adopted insect-resistant, transgenic Bt cotton have reduced their use of
highly toxic insecticides. That in turn has reduced farmers’ crop protection costs and

Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 55
benefited both the environment and public health. A real problem is how to provide
adequate incentives for crop breeders to focus on crops and adaptations to difficult
environments, which are of greater interest to poor farmers. Public funding and the
involvement of international organizations will be crucial to such research (Asian
Development Bank, 2001).
As mentioned above, the most critical areas in the world for bringing economic
prosperity and stability are the developing countries. It is the developing countries which
have a high population density and few arable land and, consequently, the severest
problems of food security.
Increasing food production has always been the highest agricultural priority in
China because of the huge population of the country. Demand for food production will
increase by at least 60 percent to keep pace with population growth, which is estimated to
reach 1.6 billion by the year 2030.This rapid population increase and vast urbanization will
eventually result in loss of valuable farmland and other natural resources. The only viable
approach to increasing food production, therefore, is to increase the productivity of
existing farmland.
As China's population increases, the amount of land and water available for
agriculture will become increasingly scarce in per capita terms. Population pressure may
also lead to growing environmental degradation, including erosion and salinization, and
may reduce the amount of land suitable for cultivation. The breeding of higher yielding
varieties and varieties resistant to environmental stresses may compensate for the decline
in cultivated land. However, it is also important to protect the resource base through
measures to control erosion, control water, and enhance soil fertility. In the pre-reform
period, the government was able to mobilize agricultural labor in slack seasons for
environmental improvement projects such as upgrading irrigation systems, salinization
control, reforestation, and terracing. Since the shift to the individual household farming
system, it has become more difficult to mobilize rural labor for such projects. Government
investment in projects for upgrading or maintaining the agricultural resource base thus
becomes increasingly important (Lin, 1998).
Chinese scientists, for many years, have been making great efforts to improve the
crop yield by traditional breeding techniques which have contributed significantly to
agricultural production. Starting 1983, with the development of transgenic techniques,

Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 56
more and more transgenic plants have been developed and agricultural biotechnology has
become a powerful tool for improving agriculture production.
But China has relatively long history of promoting and developing biotechnology
spanning several decades. It has seen in biotechnology the potential to deliver development
gains through the application of hi-tech science to the industrialisation and modernisation
of agriculture. Agricultural biotechnology potentially has a key part to play in China’s
agricultural rural development. With high levels of rural poverty, declining yields from
many key crops and damaging levels of pesticide use, technologies that promise to reduce
reliance on chemical inputs and boost yields are a welcome development. Because of this,
China has sought to promote biotechnology development through strong state-funded
research programs. In China’s case, against a background of ambitious science programs in
Europe and North America (in the form of EURIKA and the Strategic Defence Initiative
respectively), four top scientists made a proposal to Premier Deng Xiaoping, in which the
development of biotechnology featured highly, which he approved in March 1986 (Newell,
2003).
Being one of the most populated and one of the largest agricultural countries in the
world, Chinese local and central governments have taken food security for the people as a
major national concern. Food self-sufficiency has been and will continue to be the central
goal of China’s agricultural policy. The Ninth Five-year Plan for 1996-2000 and the
National Long Term Economic Plan both call for continued agricultural production growth,
annual farmer income growth of four percent, maintenance of “near” food self-sufficiency,
and elimination of absolute poverty (Huang et al., 2000).
Together with food security, poverty alleviation has been a priority of both local
and central Chinese authorities for the last decades. According to government poverty
statistics, the number of people under the poverty line in the rural area declined from 260
million in 1978 to 89 million in 1984. The incidence of poverty (the share of the poor in
the total population) declined from 32.9 percent to 11.0 percent during the period. Much of
the credit for the early reduction in poverty is attributed to the rapid rural economic growth
that resulted from better incentives and the government’s rural reform program. However,
the adequacy of financial resources for the poverty area's development is a challenge for
officials charged with running China’s poor area development. While total funds for poor

Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 57
areas increased in nominal terms over time, real investment in the poor areas declined in
the late 1980s and early 1990s.
With the poor increasingly located in the more remote areas, the change in lending
strategy from the household to economic entities, the inadequacy of financial resources,
and slower growth of the rural economy, the progress achieved since the early 1980s has
slowed. There were about 42 million people still living below the official poverty line in
1998, or approximately 5 percent of the rural population.
The government originally set a goal of eliminating absolute poverty for the
remaining 42 million people by the end of this century. To achieve the above, the program
called for increased funding for the poor areas, particularly for the 592 poor counties that
are designated by the central government. However, the increase of funds for the poor
areas has not been realized since 1994. Indeed, the real investment in the poor area
declined by 33 percent between 1993 and 1996. Although the investment in poor areas rose
in 1997, it was still lower than the level of funding allocated in the first year (1994) of the
8-7 program’s push to eliminate poverty. For a more comprehensive review of poverty
policy.
Although tremendous progress was made in addressing China’s poverty problem in
1980s due to general rural economic growth and government commitment to poverty
alleviation, the progress has slowed down since the early 1990s. There were about 34
million rural people (3.7 percent of rural population) under the government poverty line in
1999. If applying the World Bank’s poverty standard (1$ per day), the number of the poor
rised to 106 million in 1999. The majority of today's poor live in marginal areas that are
cut off from the economic mainstream. As argued by several studies from World Bank and
ADB, the nexus between agricultural productivity growth, poverty reduction, and
environmental sustainability is arguably strong in many developing countries. Without
agricultural productivity growth in fragile environments and marginal areas, poverty
incidence may worsen and environmental degradation will increase. Agricultural research
will be the major source of productivity increases.
If agricultural productivity in developing countries is to advance rapidly to meet
growing food demand, biotechnology apparently has the potential to play a large role in
this achievement (Penn, 2003). Biotech proponents argue that genetic engineering is the
solution to the problem because it will increase crop yields to feed a growing population.

Chapter III – Role of Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 58
The company Monsanto ran an advertising campaign announcing that “Worrying about
starving future generations won’t feed them. Food biotechnology will”. What is different,
now, is that the idea of GM crops being a “magic bullet” is no longer regarded as credible,
even by the biotechnology industry. Monsanto’s UK Director of Corporate Affairs is
recently reported to have said that “Nobody has ever claimed that GM is the answer to
world hunger”. Instead, proponents now argue that GM crops have the potential to help
increase food security, and only if the correct policies are pursued. However, the view that
GM crops have pro-poor potential challenges arguments that GM crops in general will not
contribute to food security. Several prominent development charities, such as Oxfam,
Christian Aid and Action Aid, have published reports arguing that GM crops may, in fact,
exacerbate food insecurity, even if they increase the amount of food that is produced. They
argue that GM crops would not reach the poorest farmers, who therefore would be even
less able to obtain or retain food than they are now. Even if GM crops might help in
exceptional cases, their overall effect might therefore be to increase food insecurity. This
focus on the specifics – specific countries, policies and crops – sounds quite reasonable.
One can agree that it is impossible to sustain the old sweeping claim that GM crops will
feed the world (Huang et al., 2001a).
Undoubtedly, most current GM crops serve the interests of large-scale farmers.
However, a “second generation” of GM crops has the potential to benefit some of the
world’s poorest people. For instance, scientists using GM techniques are researching how
to make staple foods more nutritious, and how crops can be made to grow in drought-prone
areas. The case of “golden rice”, which is commonly treated as an example of a potentially
pro-poor GM technology, is a strain of rice genetically modified to contain increased levels
of ß-carotene, a substance that our bodies can convert into vitamin A. It was developed
non-commercially – part funded by the Rockefeller Foundation – in the hope that it would
alleviate the serious problem of vitamin A deficiency in areas of Asia where rice dominates
the diets of poor people. Golden Rice is well-known because it has become a two-faced
totem in debates about GM crops and food security: for proponents, it typifies the promise
of genetic engineering; for critics, its promises are a hoax.





Chapter IV The Status of Global Agricultural Biotechnology






Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 60
1 – The Global Area of Transgenic Crops
There was an insignificant area planted in GM crops before 1992. China was the
first country to commercialize transgenic crops in the early 1990s with the introduction of
virus resistance tobacco, which was later followed by a virus resistant tomato. In 1994,
Calgene obtained the first approval in the USA to commercialize a genetically modified
food product, when the company marketed its Flavr Savr TM delayed ripening tomato
(James, 1997).
After two decades of intensive and expensive research and development in
agricultural biotechnology, the commercial cultivation of transgenic plant varieties has
commenced in 1996 (Persley et al., 1999). According to James (2002), the rapid adoption
in many countries of transgenic crops during the "initial six-year period", i.e.; from 1996 to
2001 reflects the substantial multiple benefits realized by both large and small farmers in
industrial and developing countries that have grown transgenic crops commercially. James
(2002) also advocates that the most compelling case for biotechnology, and more
specifically GM crops, are their capability to contribute to increasing crop productivity and
thus contribute to global food, feed and fiber security; conserving biodiversity, as a land
saving technology capable of higher productivity; more efficient use of external inputs and
thus a more sustainable agriculture and environment; increasing stability of production to
lessen suffering during famines due to abiotic and biotic stresses; to the improvement of
economic and social benefits and the alleviation of abject poverty in developing countries.
According to James (2003), for the seventh consecutive year, farmers around the
world continued to plant biotech crops at a double digit growth rate of 15% compared with
12% in 2002. The estimated global area of GM crops for 2003 was 67.7 million hectares
(Table 2 and Figure 1). The increase in area between 2002 and 2003 of 15% is equivalent
to 9 million hectares, this increase includes a provisional conservative estimate of 3 million
hectares of biotech soybeans in Brazil, which officially approved planting of biotech
soybeans for the first time in 2003. The final planted area in Brazil could be significantly
higher.
Seven million farmers in 18 countries – more than 85% resource-poor farmers in
the developing world –planted GM crops, up from 6 million in 16 countries in 2002. As

Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 61
shown in Table 3 and Figure 1, in 2003 almost one third of the global transgenic crop area
was grown in developing countries, up from one-quarter in 2002 (James, 2003).

Table 2 - Global area of transgenic crops, 1996 to 2003 (million hectares).
Year Hectares (million) 1996 1.7 1997 11.0 1998 27.8 1999 39.9 2000 44.2 2001 52.6 2002 58.7 2003 67.7
Source: Adapted from James (2002, 2003).

Table 3 - Global area of transgenic crops in 2002 and 2003: industrial and developing
countries (million hectares).
2002 % 2003 % +/- % Industrial Countries 42.7 73 47.7 70 +5.0 +12
Developing Countries 16.0 27 20.0 30 +4.0 +25 Total 58.7 100 67.7 100 +9.0 +15
Source: Adapted from James (2002, 2003).

Figure 1 - Global area of transgenic crops, 1996 to 2003 (million hectares). Global area of
transgenic crops, 1996 to 2003: industrial and developing countries (million hectares)
Source: Adapted from James (2002, 2003).
0,00
10,00
20,00
30,00
40,00
50,00
60,00
70,00
80,00
1996 1997 1998 1999 2000 2001 2002 2003
Total Industrial Countries
Developing Countries

Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 62
2 – Distribution of Transgenic Crops, by Country
Accordingly to James (2003), the number of countries responsible for 99% of the
global transgenic crop area expanded to six in 2003, up from four in 2002. Two new
countries, Brazil and the Philippines, joined the expanding global group of countries that
are growing GM crops. The USA grew 42.8 million hectares (63% of global total),
followed by Argentina with 13.9 million hectares (21%), Canada 4.4 million hectares (6%),
Brazil 3 million hectares (4%), China 2.8 million hectares (4%) and South Africa 0.4
million hectares (1%). Brazil and South Africa joined the USA, Argentina, Canada and
China as the leading growers of biotech crops. Of the six leading GM crop countries,
China and South Africa experienced the greatest annual increase, with both countries
planting one-third more biotech hectares than in 2002 (table 4).
The USA grew 42.8 million hectares of biotech crops, up 10% from 2002, and
accounted for 63 percent of the global total of transgenic crops. The continued growth was
a result of significant acreage gains in biotech corn varieties and continued increases in
herbicide-tolerant soybeans.
Despite the continuing economic constraints in Argentina, and soybean adoption
rates already close to 100% in 2002, its GM crop area grew at 3% with strong growth in Bt
maize. Canada’s GM crop area grew at a significant 26% between 2002 and 2003 to reach
4.4 million hectares with increases totaling almost 1 million hectares in the three crops,
canola, maize and soybean. Brazil, planting GM soybeans for the first time in 2003,
contributed 4% of the global total at 3 million hectares. This is a conservative provisional
estimate as only half of the area was planted at the time of James (2003) report. The final
area could be significantly higher. China grew 2.8 million hectares of Bt cotton (58% of
the national cotton crop) in 2003, an increase of 33% above 2002 and 4% of the total
global area of biotech crops. South Africa planted approximately 0.4 million hectares of
transgenic crops in 2003, up 33% from 2002 and 1% of the global total of GM crops. The
increase is from gains in biotech white and yellow maize, cotton and soybeans.
While GM crop hectarage in Australia decreased slightly due to the continuing
drought that resulted in significantly reduced planting overall, farmers still planted a total
area to cotton at approximately one third of normal plantings. In its second year of GM
crops production, India doubled its Bt cotton area. Romania and Uruguay also reported

Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 63
significant growth, exceeding 50,000 hectares of GM crops for the first time, whilst
countries that introduced GM crops for the first time in 2002, such as Colombia and
Honduras reported modest growth.
Spain remained the only country in the European Union to plant significant
hectarage of biotech crops, with an increase of Bt maize area by one third to reach over 6%
of the national maize crop in 2003. Elsewhere in Europe, Germany continued to grow a
small area of Bt maize, and Bulgaria continued to grow a few thousand hectares of
herbicide-tolerant maize.
Mexico grew about 62 million hectares of Bt cotton and approximately 10 million
hectares of herbicide-tolerant soybeans. The Philippines grew biotech crops for the first
time in 2003 with about 20 million hectares of Bt maize – the first biotech food/feed crop
to be grown in Asia. Reports from Indonesia indicate farmers planted a small area of Bt
cotton. The global area of transgenic crops from 1996 to 2003, by country, is shown in
Table 5 and Figure 2.

Table 4 - Global area of transgenic crops in 2002 and 2003: by country (million hectares).
2002 % 2003 % +/- % USA 39.0 66 42.8 63 +3.8 +10 Argentina 13.5 23 13.9 21 +0.4 +3 Canada 3.5 6 4.4 6 +0.9 +26 Brazil -- -- 3.0 4 -- -- China 2.1 4 2.8 4 +0.7 +33 South Africa 0.3 1 0.4 1 +0.1 +33 Australia 0.1 <1 0.1 <1 0 0 India <0.1 <1 0.1 <1 <0.1 -- Romania <0.1 <1 <0.1 <1 <0.1 -- Uruguay <0.1 <1 <0.1 <1 <0.1 Spain <0.1 <1 -- -- -- -- Mexico <0.1 <1 -- -- -- -- Philippines -- -- -- -- -- -- Colombia <0.1 <1 -- -- -- -- Bulgaria <0.1 <1 -- -- -- -- Honduras <0.1 <1 -- -- -- -- Germany <0.1 <1 -- -- -- -- Indonesia <0.1 <1 -- -- -- -- Total 58.7 100 67.7 100 +9 +15 Source: Adapted from James (2002, 2003)

Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 64
Table 5 - Global area of transgenic crops, 1996 to 2003: by country (million hectares).
1996 1997 1998 1999 2000 2001 2002 2003 USA 1.5 8.1 20.5 28.7 30.3 35.7 39.0 42.8 Argentina 0.1 1.4 4.3 6.7 10.0 11.8 13.5 13.9 Canada 0.1 1.3 2.8 4.0 3.0 3.2 3.5 4.4 Brazil -- -- -- -- -- -- -- 3.0 China -- 0.0 <0.1 0.3 0.5 1.5 2.1 2.8 South Africa -- -- <0.1 0.1 0.2 0.2 0.3 0.4 Australia <0.1 0.1 0.1 0.1 0.2 0.2 0.1 0.1 India -- -- -- -- -- -- <0.1 0.1 Romania -- -- -- <0.1 <0.1 <0.1 <0.1 <0.1 Spain -- -- <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 Uruguay -- -- -- -- <0.1 <0.1 <0.1 <0.1 Mexico <0.1 <0.1 0.1 <0.1 <0.1 <0.1 <0.1 <0.1 Bulgaria -- -- -- -- <0.1 <0.1 <0.1 <0.1 Indonesia -- -- -- -- -- <0.1 <0.1 <0.1 Colombia -- -- -- -- -- -- <0.1 <0.1 Honduras -- -- -- -- -- -- <0.1 <0.1 Germany -- -- -- -- <0.1 <0.1 <0.1 <0.1 Philippines -- -- -- -- -- -- -- <0.1 Total 1.7 11.0 27.8 39.9 44.2 52.6 58.7 67.7 Source: Adapted from James (2003).

Figure 2 - Global area of transgenic crops, 1996 to 2003: by country (million hectares).












Source: Adapted from James (2002, 2003).


0,00 5,00
10,00 15,00 20,00 25,00 30,00 35,00 40,00 45,00
1996 1997 1998 1999 2000 2001 2002 2003
USA Argentina Canada Brazil China

Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 65
3 – Sowing of Transgenic Crops, by Crop Type
The sown area of four major global transgenic crops is illustrated in Table 6 and
Figure 3 for the period 1996 to 2003. It clearly shows the dominance of transgenic soybean
(herbicide tolerant).
As shown in Table 7, globally, in 2003, growth continued in all four
commercialized GM crops: GM soybean occupied 41.4 million hectares (61% of global
GM area), up from 36.5 million hectares in 2002; GM maize was planted on 15.5 million
hectares (23% of global GM area), up substantially from 12.4 million hectares in 2002,
with the highest growth rate for all crops at 25% - this follows a 27% growth rate in GM
maize in 2002; transgenic cotton was grown on 7.2 million hectares (11% of global GM
area) compared with 6.8 million hectares in 2002; and GM canola occupied 3.6 million
hectares (5% of global GM area), up from 3.0 million hectares in 2002 (James, 2003).

Table 6 - Global area of transgenic crops in 2002 and 2003: by crop (million hectares).
1996 1997 1998 1999 2000 2001 2002 2003 Soybean 0.5 5.1 14.5 21.6 25.8 33.3 36.5 41.4 Maize 0.3 3.2 8.3 11.1 10.3 9.8 12.4 15.5 Cotton 0.8 1.4 2.5 3.7 5.3 6.8 6.8 7.2 Canola 0.1 1.2 2.4 3.4 2.8 2.7 3.0 3.6 Squash -- -- 0.0 <0.1 <0.1 <0.1 <0.1 <0.1 Papaya -- -- 0.0 <0.1 <0.1 <0.1 <0.1 <0.1 Potato <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 -- -- Total 1.7 11 27.8 39.9 44.2 52.6 58.7 67.7 Source: James (2003).

Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 66
Figure 3 - Global area of transgenic crops, 1996 to 2003: by crop (million hectares).











Source: Adapted from James (2002, 2003).

Table 7 - Global area of transgenic crops in 2002 and 2003: by crop (million hectares).
Crop 2002 % 2003 % +/- % Soybean 36.5 62 41.4 61 +4.9 +13 Maize 12.4 21 15.5 23 +3.1 +25 Cotton 6.8 12 7.2 11 +0.4 +6 Canola 3.0 5 3.6 5 +0.6 +20 Total 58.7 100 67.7 100 +9 +15 Source: Adapted from James (2002, 2003).

4 – The Distribution of Transgenic Crops, by Modification Traits
During the eight-year period 1996 to 2003, herbicide tolerance has consistently
been the dominant trait followed by insect resistance (Table 8 and Figure 4).
In 2003, herbicide tolerance, deployed in soybean, maize, canola and cotton
occupied 73% or 49.7 million hectares of the global GM 67.7 million hectares, with 12.2
million hectares (18%) planted to Bt crops. Stacked genes for herbicide tolerance and
insect resistance deployed in both cotton and maize continued to grow and occupied 8% or
5.8 million hectares, up from 4.4 million hectares in 2002 (Table 9). The two dominant
GM crop/trait combinations in 2003 were: herbicide tolerant soybean occupying 41.4
million hectares or 61% of the global total and grown in seven countries; and Bt maize,
0,00
5,00
10,00
15,00
20,00
25,00
30,00
35,00
40,00
45,00
1996 1997 1998 1999 2000 2001 2002 2003
Soybean Maize Cotton Canola


Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 67
occupying 9.1 million hectares, equivalent to 13% of global transgenic area and grown in
nine countries. Whereas the largest increase in Bt maize was in the US, growth was
witnessed in all seven countries growing Bt maize. Notably, South Africa grew 84,000
hectares of Bt white maize for food in 2003, a substantial 14 fold increase from when it
was first introduced in 2001. Bt/herbicide tolerant maize and cotton both increased
substantially, reflecting a continuing trend for stacked genes to occupy an increasing
percentage of the area planted to GM crops on a global basis (James, 2003).

Table 8 - Global area of transgenic crops, 1996 to 2003: by trait (million hectares).
1996 1997 1998 1999 2000 2001 2002 2003 Herbicide Tolerance 0.6 6.9 19.8 28.1 32.7 40.6 44.2 49.7 Insect Resistance (Bt)
1.1 4.0 7.7 8.9 8.3 7.8 10.1 12.2
Bt/Herbicide Tolerance
-- <0.1 0.3 2.9 3.2 4.2 4.4 5.8
Virus resistance/Others
<0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1 <0.1
Total 1.7 11 27.8 39.9 44.2 52.6 58.7 67.7 Source: James (2003).

Figure 4 - Global area of transgenic crops, 1996 to 2003: by trait (million hectares).












Source: Adapted from James (2002, 2003).


0,00
10,00
20,00
30,00
40,00
50,00
60,00
1996 1997 1998 1999 2000 2001 2002 2003
Herbicide Tolerance Insect Resistance (Bt) Bt/Herbicide Tolerance

Chapter IV – The Status of Global Agricultural Biotechnology
Agricultural Biotechnology in China: A National Goal 68
Table 9 - Global area of transgenic crops in 2002 and 2003: by trait (million hectares).
Trait 2002 % 2003 % +/- % Herbicide tolerance 44.2 75 49.7 73 +5.5 +12 Insect resistance (Bt) 10.1 17 12.2 18 +2.1 +21 Bt/Herbicide tolerance 4.4 8 5.8 8 +1.4 +32 Virus resistance/Other <0.1 <1 <0.1 <1 <0.1 -- Total 58.7 100 67.7 100 +9 +15 Source: Adapted from James (2002, 2003).

5 – The Global Value of GM Crops
James (2003) predicts that within the next five years 10 million farmers in 25 or
more countries will plant 100 million hectares of transgenic crops. In 2003, the global
market value of GM crops is estimated to be $4.50 billion to $4.75 billion ($4.0 billion in
2002). As of 2003, this represents 15% of the $31 billion global crop protection market,
and 13% of the $30 billion global commercial seed market. The market value of the global
transgenic crop market is based on the sale price of transgenic seed plus any technology
fees that apply. The global market value of the GM crop is expected to increase from
approximately $4.5 billion in 2003 to $5 billion or more by 2005
.





PART II Agricultural Biotechnology in China










Chapter I Historical and Current Status of Technology and Biotechnology in China



Chapter I - Historical and Current Status of Technology and Biotechnology in China
Agricultural Biotechnology in China: A National Goal 71
1 - Historical and Current Status of Technology and Biotechnology in China
1.1 - Pre-1949
Traditional forms of biotechnology have existed in China since its earliest history.
According to legend, Shen Nong, a mythical king, introduced China to grain cultivation
and crop rotation, and invented a transparent stomach covering in order to observe the
effects of herbal medicines on the digestive tract. During the late Neolithic period, the
Chinese were already adept at alcohol fermentation, as evidenced by the discovery of wine
cups and containers from the Longshan culture and of winery ruins in Henan Province.
Records from the eleventh century B.C. show that the importance of temperature and water
quality to grain fermentation was understood. By the end of the Zhou Dynasty in 221 B.C.,
the Chinese were producing bean curd, soy sauce, and vinegar by methods still used today.
The process of flax maceration by anaerobic bacteria is alluded to in a verse from the Book
of Songs, China’s earliest collection of poetry (200 B.C.), while the rotation of bean crops
is described in writings from A.D. 500. As early as the sixth century, the Chinese
understood that rabies could be spread by mad dogs. During the Sui Dynasty (581-618), a
vaccine against smallpox was developed, and by the Ming Dynasty (1368-1644), it was
widely available to the masses (Hamer and Kung, 1989).
Despite this early inventiveness, China’s science and technology, including
biotechnology and medicine, failed to go through the explosive changes that altered
Western science in the seventeenth to nineteenth centuries. As noted by Joseph Needham
in his epic Science and Civilization in China (Cambridge: Cambridge University Press,
1961), China never underwent a scientific revolution; there are no Chinese equivalents to
Locke, Newton, or Darwin. Consequently, the fundamental concept of testing hypotheses
by experimentation was still unknown in China when the door to the west was reluctantly
opened to traders and missionaries during the sixteenth and seventeenth centuries (Hamer
and Kung, 1989).
China’s defeat by the gunboats of European imperialism in the Opium War (1840-
1842) ushered in the “half feudal, half colonial” period of the late nineteenth and early
twentieth centuries, when China flirted with Western technology. Many students, including
Sun Yatsen, went to Japan, Europe, and the United States for training. However, except for

Chapter I - Historical and Current Status of Technology and Biotechnology in China
Agricultural Biotechnology in China: A National Goal 72
the brief Hundred Days Reform of 1898, efforts to modernize China’s science and
education systems were suppressed by the government (Hamer and Kung, 1989).
In 1911, the fall of the last emperor and establishment of the Republic marked a
turning point in China’s science policy. Under the influence of Sun Yatsen, a physician and
firm believer in science, learned societies were formed, scientific journals began
publication, science departments were established at several universities, and students were
once again abroad. An important development was the founding of the Central Academy of
Sciences and the Beijing Academy of Sciences, which were later combined to form the
Chinese Academy of Sciences (CAS) (Hamer and Kung, 1989).

1.2 - 1949-1959
China’s efforts to build a scientific establishment were stymied, however, by
political unrest, and were completely halted by the war with Japan (1937-1945) and by the
subsequent civil war between the Nationalists and the Communists. After the Communist
Party’s victory in 1949, China began restructuring its scientific research and educational
institutions. Following the example of the Soviet Union, basic research was assigned to
Chinese Academy of Sciences (CAS), applied research to various state ministries such as
agriculture and public health, and education to the universities. An important issue
confronting most developing countries is how to develop agriculture rapidly, both to meet
the increased food demand brought on by explosive population growth and also to support
urban industrialization (Hamer and Kung, 1989).
In this context, China's achievements have been remarkable. However, along the
way China also has made many mistakes, for which it has paid a high price. At the
founding of the People's Republic of China in 1949, 89% of the population resided in rural
areas. At that time heavy industry was a major characteristic of the economic structures of
developed countries. China's technological buildup started in the early fifties and heavily
relied on the supports provided by the Soviet Union. To enhance national prestige, the
government in 1952 adopted a Stalinist development strategy oriented toward heavy
industry. The goal was to build, as rapidly as possible, the capacity to produce capital
goods and military materials. Agriculture, in effect, was treated as a supporting sector (Lin,
1998). In addition, the strategy was part of China's ambition to catch up with the developed

Chapter I - Historical and Current Status of Technology and Biotechnology in China
Agricultural Biotechnology in China: A National Goal 73
world and regain its glory in a short time. In China's first Five-year Plan of 1953-1958, the
Soviet Union helped China with 156 major industrial projects. These projects were almost
exclusively in the heavy industry, especially electricity, steel, and heavy equipment
manufacturing. In addition, China imported 426 sets of equipment and 122 single
technologies and production lines from Soviet Union, Eastern European countries and
several western countries (Chen, 1997). These imported technologies laid the foundation of
China's modern industry, their impacts can still be felt even today. As a result, China's
economic structure was changed swiftly.
In 1949, the share of heavy industry in gross national output was only 7.9%, by
1962 when the second Five-year Plan ended, the figure became 35.5%. Inside the industrial
sector, the share of heavy industry was 26.4% in 1949, but became 53.5% in 1962 (Chen,
1997). However, the heavy-industry development strategy was not free of flaws. In fact, it
has been criticized by some authors as the most important factor that has retarded China's
economic development. To be sure, with a weak industrial base and few national savings,
this strategy had to be aided by distorted price signals, the most significant being the
suppression of agricultural prices in order to maintain a low wage workforce (Yao, 2001).
Unfortunately, capital was extremely scarce and the voluntary savings rate far too low to
finance the high rate of investment in heavy industry sought through this development
strategy. To facilitate rapid capital expansion, a policy of low wages for industrial workers
evolved alongside the development strategy oriented toward heavy-industry. The
assumption was that through low wages, state-owned enterprises would be able to create
large profits and reinvest them for infrastructure and capital construction. The practice of
establishing low prices for energy, transportation, and other raw materials, such as cotton,
was instituted for the same reason. To implement its low-wage policy, the government
needed to provide the urban population with inexpensive food and other necessities,
including housing, medical care, and clothing. The government instituted a restrictive food
rationing system in 1953, which remained in place until the early 1990s. During the same
year, to secure a low-priced supply of food for urban rationing, a low-price, compulsory
grain procurement policy was imposed in rural areas. The domestic grain trade was
virtually monopolized by the state. The industrial development strategy resulted in greater
demand for agricultural products because of the increased numbers of urban workers, the
need to expand agricultural exports to earn foreign exchange for importing industrial

Chapter I - Historical and Current Status of Technology and Biotechnology in China
Agricultural Biotechnology in China: A National Goal 74
equipment, and the increased industrial demand for raw material. Under those conditions,
agricultural stagnation and poor harvests would not only affect the food supply, but would
also have an almost immediate and direct adverse impact on industrial expansion.
Reluctant to divert resources from industry to agriculture, the government pursued a
new agricultural development strategy that relied on mass mobilization of rural labor to
work on labor-intensive projects, such as irrigation, flood control, and land reclamation,
and to raise unit yields in agriculture through traditional methods, such as closer planting,
more careful weeding, and the use of more organic fertilizer. The government believed that
collectivized agriculture was the farming institution that would make all of this possible
(Lin, 1998). The 1959-61 crisis made the government more realistic and for a number of
years immediately afterward the government gave priority to agriculture in its development
strategy. Government policy started to emphasize modern inputs. China's irrigated area
increased gradually from 30.55 million hectares (29.7% percent of cultivated area) in 1962
to 44.97 million hectares (45.2% percent of cultivated area) in 1978, but as Table 10 in the
annex shows, most of this increase came from the spread of powered irrigation rather than
the construction of labor-intensive canals and dams. The utilization of chemical fertilizer
accelerated as well, rising from a very modest 4.6 kg/ha in 1962 to 58.9 kg/ha in 1978.
Equally impressive was the expansion in the utilization of electricity, a 17.5-fold increase
between 1962 and 1978.

1.3 - 1960-1978
The fast development of the 1950s ended up with the Great Leap-forward
movement launched in 1958 and the subsequent famine that took at least 20 million lives
in just 3 years (Lin, 1990 quoted in Lin, 1998). In the subsequent 18 years, China was in
the abyss of political movements, economic stagnation, treachery, fractional fights, and
ultimately human degradation. In the early 1970s after the frenzy of the Cultural
Revolution abated, the government under the leadership of the late Premier Zhou Enlai
tried to continue China's modernization process by proposing to achieve Four
Modernizations (agriculture, industry, science, and military) by the end of the century.
Encouraged by this aim, there was a new wave of technological importation. This time, the
source countries were exclusively western countries. In the period of 1972-1976, 5.14

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billion US dollars were spent to equip new factories all with imported equipment. The
emphasis in this period was heavy chemical industry. In 1977, the new party chairman,
Hua Guofeng, an honest but close-minded party functionary, proposed several new grand
plans to catch up with the western world, and a new wave of heavy-industry development
was launched. In 1978, the total investment was 50.1 billion yuan, a 31% increase over
1977; in addition, many technological import contracts were signed in a hasty way, as a
result, foreign reserve had nearly 10 billion US dollar deficit in that year (Chen, 1997).
This wave has been subsequently called "Foreign Leap-forward" and was stopped quickly
after Deng Xiaoping controlled the government in 1979 (Yao, 2001).
China was still in the throes of the Cultural Revolution in the 1970s, and thus,
Chinese scientists had little chance to participate in the development of modern
biotechnology. But in the last years of this decade, China chose economic reform and
development over political ideology by emphasizing the Four Modernizations of
agriculture, industry, national defense, and science and technology, last of this period
making biotechnology the top priority in the high technology field. Funding for biological
research was increased more than 25-fold during this period, and new mechanisms were
introduced to allocate these monies by competitive, peer-reviewed grants. At that time,
China’s investment in biotechnology, as a percentage of its gross national product, was
comparable to that in many Western countries.
The most noteworthy change was the establishment of an agricultural research and
extension system for modern varieties. As a matter of fact, agricultural research is an area
that the Chinese government can view with pride. The Chinese Academy of Agricultural
Sciences was founded in Beijing in 1957; concurrently, each of the 29 provinces in the
mainland established its own academy of agricultural sciences. However, this institution
was initially at an embryonic stage, which developed especially in the 1980s, assuming a
major role in the biotechnological development nationwide. Each national and provincial
academy consists of several independent research institutes. Most prefectures also founded
prefectural research institutes. In addition, agricultural research was conducted in a few
research institutes of the Chinese Academy of Sciences and in some universities (Lin,
1998).
After the 1960s, China’s research institutions grew rapidly, producing a steady flow
of new varieties and other technologies. China’s farmers used semi-dwarf seed varieties

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several years before the release of Green Revolution technology elsewhere in the world.
China was the first country to develop and extend the use of hybrid rice. Chinese-bred corn,
wheat, and sweet potatoes were comparable to the best in the world in the pre-reform era
(Stone, 1988 quoted in Huang et al., 2000a).
Several research institutes within CAAS (the Chinese Academy of Agricultural
Sciences) and CAS (the Chinese Academy of Sciences) as well as in public universities,
initiated their first agricultural biotechnology research programs in the early 1970s. The
research focus of biotechnology in the 1970s was on cell engineering, such as tissue
culture, anther culture, and cell fusion etc. This research covered many crops, including
rice, wheat, maize, cotton, vegetables and others.
This agricultural research system fell apart during the Cultural Revolution, from
1966 to 1976. The Chinese Academy of Agricultural Sciences and many provincial and
prefectural academies were reorganized, and many research scientists were sent in small
groups to work on farms. They were sent to the countryside or factories for reeducation,
and most research institutes were either closed or converted to production facilities.
Between 1966 and 1976, the Cultural Revolution did its best to erase all forms of scientific
innovation in China. A rare exception was the Shanghai Institute of Biochemistry, which
carried out work on the synthesis of insulin and transfer ribonucleic acid (tRNA) during
this period. The agricultural research system was restored after the end of the Cultural
Revolution, and at that time many countries also established their own agricultural research
institutes. The agricultural research institutes were funded by government budgets at their
corresponding levels. The Ministry of Agriculture and the State Science and Technology
Commission, however, also provided grants to research projects at lower level institutes
(Lin, 1998). The government also made a major effort to attract scientists who had left the
country during the war, particularly nuclear physicists and doctors, by promising them the
opportunity to help build a new Chinese society. These promises were soon broken as
China embarked on a series of vicious antirightist campaigns in which scientists, as
members of the intellectual class, were castigated as “evil cow snakes” and “foreign devil
lovers”. The situation was exacerbated by the split with the Soviet Union, China’s main
provider of technological and scientific training in the 1950s (Lin, 1998).


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1.4 - 1979-1999
Since the late 1970s, China’s attitude toward the United States and other developed
countries also underwent a major shift from strict isolationism to ever increasing contact
and cooperation. Since 1978, in the biological sciences alone, China has sent more than
2000 students and researchers to the United States for advanced training. In addition, many
joint research and training programs in China are currently being supported by American
and other foreign academic institutions, private foundations, commercial enterprises, and
government agencies. Such cooperative ventures have the potential to provide a rapid and
efficient mechanism for Chinese scientists to obtain the training and technology needed to
perform advanced biotechnology research.
Since China’s leadership initiated the economic reforms in 1978, the economy has
grown steadily. The annual growth rate of China’s GDP averaged approximately 9.5
percent between 1979 and 1995 (see Table 11 in annex). China’s foreign trade expanded
even more rapidly than its overall economic growth, except during the most recent three-
year period. Even when the Asian financial crisis plagued the region in the late 1990s,
China's economy continued to grow, albeit at a somewhat more moderate rate than during
the pre-crisis period (Huang et al., 2000a).
China's GDP grew at 7.8 percent in 1998 and 8.3 percent in the first quarter of 1999
(compared to the first quarter of 1998). From a technological point of view, China's
economy has the potential to maintain a dynamic GDP growth rate of 8 to10 percent
annually in the coming decades (Lin, Shen, and Zhao, 1996 quoted in Huang et al., 2000a).
China set a priority on science and technology (S&T) more than twenty years ago.
Endeavours to build strength in this area have resulted in rapid improvements, marked by
the quadrupling of Gross National Product since 1978.
During the Sixth 5-Year Plan (1981-1985), funds were allocated to support
biotechnology research in the fields of agriculture, food processing, and pharmaceutical
production; and in 1983, the China National Center for Biotechnology Development
(CNCBD) was established to coordinate these activities. During the Seventh 5-Year Plan
(1986-1990), the level and scope of biotechnology funding have been greatly increased. In
March 1986, the State Council Leading Group on Science and Technology published a
pivotal document, often referred to as the “863 Plan”, describing China’s high technology

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Agricultural Biotechnology in China: A National Goal 78
development program and making biotechnology its top priority. That same year, the
National Natural Science Foundation of China (NSFC) was founded to support basic
research. In 1988, the State Science and Technology Commission (SSTC) published its
second white paper on science and technology, which reinforced biotechnology as China’s
number one priority for high technology development. These events set the stage for the
current mechanisms for determining biotechnology research priorities, administration, and
funding.

2 – China’s Research and Development System
China has traditionally had one of the strongest research systems in the world,
including the largest number of agricultural scientists of any country in the developing
world. Since the 1950s, China’s researchers have successfully produced a steady flow of
new varieties and other technologies. Farmers used semi-dwarf varieties developed in
China several years before the release of Green Revolution technology elsewhere. China
was the first country to develop and extend an F-1 variety of hybrid rice. Chinese-bred
corn, wheat, and sweet potatoes technologies were comparable to the best varieties in the
world in the pre-reform era (Stone, 1988 quoted in Jin et al., 1998).
Variety improvement has been the core of China's agricultural research program
from the very beginning. In the early 1950s, emphasis was given to the selection and
promotion of the best local varieties. New varieties of rice, wheat, cotton, maize, and other
crops were also imported from abroad. A major breakthrough in rice breeding occurred in
1964 when China began full-scale distribution of fertilizer-responsive, lodging-resistant
dwarf rice varieties with high yield potential. This breakthrough occurred two years earlier
than International Rice Research Institute’s (IRRI) release of IR-8, the variety that
launched the Green Revolution in rice elsewhere in Asia. At about the same time, hybrid
maize and sorghum, improved cotton varieties, and new varieties of other crops were also
released and promoted. These high yielding varieties were rapidly adopted (Lin, 1998).
A second major breakthrough in rice breeding occurred in 1976, when China
became the first country to commercialize the production of hybrid rice. The innovative
breeding and commercial development of hybrid rice has been heralded by some as the
most important achievement in rice breeding in the 1970s. By 1979, high yielding varieties

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Agricultural Biotechnology in China: A National Goal 79
covered 80% of the rice area, 85% of the wheat area, 60% of the soybean area, 75% of the
cotton area, 70% of the peanut area, and 45% of the rapeseed area (Lin, 1998).
China’s agricultural scientists and the government support system developed and
disseminated technology throughout the People’s Republic period. By the early 1980s,
China’s research and development system for agriculture was at its peak. It had just made
several major breakthroughs. Its level of national funding had been increasing. In part as a
consequence of past investments, throughout the reform era, breeders turned out a constant
stream of varieties. Since 1982, rice farmers in China have used about 400 “major”
varieties each year (Huang et al., 2000a).
Rice farmers in each province use around 25 major varieties per year. In the case of
wheat, because there is no single dominant variety like hybrid rice (for which several
varieties make up a large proportion of the nation’s sown area), the total number of
varieties per year nationally and the number per province are expected to be larger. In fact,
wheat and maize breeders enjoyed less success. Wheat farmers in each province use
around 23 varieties each year; maize farmers, on average, use 13 varieties. There are even
fewer major soybean varieties in China both in total and on a per province basis. One
reason may be that the research system has not traditionally centered its attention on the
crop. Additionally, China is the center of origin for soybeans and there are many more
small, traditional varieties that are still being grown (Huang et al., 2000a).
Chinese farmers adopt new varieties with great regularity. The rate of turnover of
varieties of major rice, wheat, maize, and soybeans in China is very impressive. Between
the early 1980s and 1995, China’s farmers turned their varieties over at a rate that ranged
from about 13 to 45 percent. Maize farmers turned their varieties over the fastest,
averaging more than 33 percent per year. This means that every three years farmers on
average replace all of the varieties in their fields. Rice and wheat farmers adopt varieties at
a somewhat slower rate, changing their varieties every 4 to 5 years. Soybean farmers adopt
varieties at the slowest rate, changing their varieties every 6 years. Again, this might be
consistent with the fact that the research system has not traditionally centered its attention
on soybean (Huang et al., 2000a).
In addition to producing genetic material itself, China also has drawn heavily on the
international research system for genetic material, especially for rice. The International
Rice Research Institute’s material comprises a large share of China’s rice germplasm.

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Agricultural Biotechnology in China: A National Goal 80
Nationwide, we can trace around 20 percent of the germplasm to IRRI varieties. The
proportion varies greatly over time (from 16 to 25 percent) and also varies by province,
reaching more than 40 percent in Hunan Province, one of China’s largest rice growing
provinces, in the late 1980s. Although the national use of wheat and maize materials from
the CG system (varietal contribution by Consultant Group for International Agricultural
Research, CGIAR), mostly from CIMMYT, is lower (4 percent on nation average), there
does exist great variability among provinces, and in some provinces material from the CG
system (i.e. especially those in CIMMYT’s mandate area, for example, Yunnan province
for wheat or Guangxi Province for maize) makes up around half of the germplasm (Huang
et al., 2000a).
In summary, China’s research system has created a lot of new technology and it has
succeeded in getting farmers to adopt it at a rapid pace. The technology embodies
significant levels of yield-increasing material that may prove to be an important
determinant of productivity. The national research effort also is aided by the international
agricultural research system. The rate of adoption of the highest yielding material, however,
is much slower. China’s yields and output certainly have grown due to increased use of
inputs (Huang et al., 2000a and Jin et al., 2002).
Although China has spent the last 50 years building the most successful agricultural
research system in the developing world—employing more than 70,000 scientists—
research in modern plant biotechnology did not begin until the mid-1980s. Scientists now
apply advanced biotechnology tools to the field of plant science, regularly working on the
synthesis, isolation, and cloning of new genes and the transformations of plants with these
genes. With the initiation of a research program on rice functional genomics in 1997,
China’s researchers began using AC/DS transposons and T-DNA insertion methods to
create rice mutagenesis pools. Biotechnologists also have initiated functional genomics
research for Arabidopsis. Some surveys of China’s laboratories identified over 50 plant
species and more than 120 functional genes that scientists are using in plant genetic
engineering, making China a global leader in the field (Huang et al., 2002a).
There are over 100 laboratories in China involved in transgenic plants research. By
2000, there were 18 GM crops generated by Chinese research institutes, four of them have
been approved for commercialization since 1997. GM varieties in crops such as rice, maize,

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Agricultural Biotechnology in China: A National Goal 81
wheat, soybean, peanut and others are either in the research pipeline or are ready for
commercialization (Huang et al., 2002a).
An interest in biotechnology also builds on strong traditions of agricultural research
in China, and the Green Revolution narratives have been particularly important in this
aspect. Technology has been a key source of growth alongside institutional and price
reforms, although perhaps in recent times it has received less attention by comparison with
the emphasis placed on market reforms. It is often forgotten that China was the first nation
to extend semi-dwarf rice varieties and drought and pest resistant wheat cultivars in the
1950s. These were followed by hybrid maize in the 1960s and the very first hybrid rice
cultivars in the 1970s. Hybrids from the prestigious Hunan [now China] Hybrid Rice
Research Institute covered half the area of cultivated rice by 1990. Nevertheless, strong
arguments have been made that, while research has been key to maintaining total factor
productivity in agriculture, returns in recent years have been declining. Such a case leads to
an emphasis on new, more promising areas of research, given limitations in traditional
avenues. Research institutes are also very crop oriented. The model of research is one of
getting winning new varieties out to farmers, and biotechnology can be seen as an
extension of this through yield increases and a variety focused approach. Some fear that
one consequence of this is that rather less emphasis is perhaps placed on integrated farming
systems or livelihoods-based approaches (Keeley, 2003a).

2.1 – Total Factor Productivity (TFP)
Although China's ability to feed itself during the last 45 years was highly acclaimed,
really remarkable achievements in Chinese agriculture did not occur until the reform began
in 1979 (see Table 12 in annex). As mentioned before, this growth has mainly come from
institutional changes, the mobilization of inputs, intensity of farming, and growth in
productivity from technological changes. Therefore, major elements of the reform included
the replacement of the collective team system with the household responsibility system, the
expansion of rural product and factor markets, and the liberalization of agricultural prices,
except for grain and cotton. Among those reforms, the change to the household system had
the largest impact on productivity (Lin, 1998).

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Accordingly to Lin and Li (1995) quoted in Lin (1998), between 1979, when this
institutional change began, and 1984, when it was complete, we see the largest annual
growth rate in agriculture's TFP as well as in total grain output and per capita grain output.
However, the impact of this institutional change on agricultural production was a one-time
effect that had run its course by 1984. Although growth since 1984 in TFP has remained
substantially higher than in the pre-reform period, annual growth of grain output has
declined significantly. The average annual growth rate of 1.55% from 1984-96 was even
lower than the average annual growth rate of 2.41% in the pre-reform period of 1952-78.
As a result, during 1984-96, the annual growth rate of grain output per capita was 0.14%,
the lowest since 1952. The poor performance in grain production resulted mainly from
continuous government intervention in grain production and marketing. As the government
liberalized the prices and marketing of most other agricultural products, the production of
grain became less profitable than other products and farmers did not have adequate
incentives to increase grain output.
Recent studies on agricultural TFP further confirm that agricultural productivity
growth has mainly come from technology, including both the expansion of HYVs and
improvement in farming system. Technology contributed half of the increase in rice yield
between 1975- 1992. More than 50 percent of the growth of grain production and nearly 40
percent of cash crop output between 1978 and 1992 can be attributed to agricultural
research. The major outputs of agricultural research – improved varieties and hybrids –
have come from national, provincial, and prefectural institutes as well as from agricultural
universities (Huang et al., 2001a).
Research efforts and the application of new technologies are expected to contribute
significantly to growth in agricultural output. The yield profile in Figure 5 in annex, which
measures changes in land productivity, provides indirect evidence of the contribution of
research and technologies to grain production. In an empirical study that directly measured
the contribution of research to production, Fan and Pardey (1997) quoted in Lin (1998),
found that 20% of the growth in agricultural output from 1965 to 1993 was attributable to
research-induced technological change. Another empirical study, focused on rice
production from 1970-90, also confirmed the primacy of technological change in
explaining yield improvements. However, when we look at total factor productivity (TFP)
instead of land productivity and examine the productivity profile for the entire period from

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Agricultural Biotechnology in China: A National Goal 83
1952 to 1996 (instead of just a subperiod), we see a quite different picture. Studies by Fan
(1997) and Wen (1993) quoted in Lin (1998) show that the TFP throughout the 1960s and
1970s was lower than that in the 1950s and did not rise above the 1952 level until the
beginning of the agricultural reform in 1979.

2.2 – China’s Research Performance and Funding Trends
China’s research effort has succeeded by almost every indicator in many different
sectors. Fan (1991) quoted in Jin et al. (1998) has demonstrated the positive effect of
technology on the value of the output of the agriculture sector in the early reform era. More
recent work has demonstrated that the contribution of research to the increase in yields and
production of rice, wheat, maize, and cash crops exceeds that of any other factor in the
early and late reform eras (Huang and Rozelle, 1996; Huang and Rozelle, 1997; Rozelle
and Huang, 1997 quoted in Jin et al., 1998). Research on the rates of return of agricultural
research spending also have generated estimated levels that range between 70 and 108
percent, high for investments even in China’s capital short economy.
Despite the contributions of research to the national food supply, farmer incomes,
and efforts of leaders to meet the nation’s food security goals, sectoral officials have had
trouble maintaining access to enough fiscal resources to keep agricultural research
investment from falling—although the direction of research investment is currently the
subject of intense debate.
Budget pressures, the nation’s “urban first” mentality, and poor intellectual
property rights, in part, account for the inability of China to maintain a robust and growing
agricultural research system. Despite the rapid growth of the economy, China’s record on
tax collection has left governments at all levels, but especially the national government and
poorer provinces, short of fiscal resources. Faced with hard budget constraints, one
response of budget managers has been to slash even well-functioning public services. Cuts
to agriculture-oriented public agencies, may be even greater, given the well-known bias of
policy makers against the rural sector and for urbanites. Weak intellectual property rights,
as typified by the lack of plant breeding rights before 1997, have exacerbated the problem,
since agricultural research institutes have been unable or unwilling to make up funds by

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Agricultural Biotechnology in China: A National Goal 84
marketing their products or selling their technology (Rozelle, Pray, and Huang, 1997
quoted in Jin et al., 1998).





Chapter II China’s Agricultural Biotechnology Development Strategies and Policies




Chapter II – China’s Agricultural Biotechnology Development Strategies and Policies
Agricultural Biotechnology in China: A National Goal 86
1 - China’s Agricultural Biotechnology Development Strategies and Policies
China’s leaders have paid great attention to agricultural biotechnology, as discussed
above. Traditionally, biotech development has been conceived of strongly consistent with
the national interest as defined by the leaders of China.
Chinese leaders have made clear their strong support for biotechnology and urged
that China should position herself to take advantage of the potential biotech revolution. In
his Government Work Report delivered to the National Peoples’ Congress in March 1999,
then Chinese Premier Zhu Rongji said “We should work vigorously to develop agriculture
through science and technology, information technology and other high and new
technologies, accelerate the work of breed selection and improvement and spread the use
of advanced, applicable techniques which can increase production and income” (Ma, 1999
quoted in Newell, 2003).
In response to Science Editor Ellis Rubenstein’s question about concerns in the
West regarding GMOs and criticisms of biotechnology, Jiang Zemin stated that “We are
also very much concerned about these... I think it is important to uphold the principle of
freedom of science. But advances in science must serve, no harm humankind. The Chinese
government is now mulling over new rules and regulations to guide, promote regulate, and
guarantee a healthy development of science. I believe biotechnology, especially gene
research, will bring good to humanity” (Rubenstein, 2000 quoted in Huang and Wang,
2003). These statements reflects China’s position on biotechnology development:
promoting the technology but showing appropriate precaution for biosafety, the
environment, food safety, and the commercialization of biotechnology.
In the early days, China’s vision included shaping biotechnology into a premier
precision tool of the future for creation of wealth and ensuring social justice especially for
the welfare of the poor. More recently, however Chinese biotech policy has expressed a
greater degree of uncertainty about the future of the technology, despite continuing levels
of high investment in the sector. There is less consensus now than was the case even a year
or two ago about the political and economic costs associated with following a strongly
promotional position on biotech and no new crops have been commercialized since 1999
(Newell, 2003).

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Agricultural Biotechnology in China: A National Goal 87
This shift results in part from strategic choices about the need to export food to
European publics sceptical about the safety of GM crops. The size of the European market
means that its policies strongly affect global food and feed production, commodity prices
and trade patterns, and therefore influence the policies of many other countries. The
impacts of the EU moratorium have included a rapid change in the patterns of transatlantic
trade in commodities like soya and maize, as European buyers sought supplies of non-GM
grain from formally GM-free countries such as Brazil instead of traditional suppliers in the
United States (Newell, 2003 and Glover, 2003). This signal was received loud and clear
when Chinese soy sauce was rejected by the UK because it contained GM ingredients from
the US. This was said to be “the most direct cause for the new labelling restrictions in
China”.
Ever since it was announced in 1999 the European Union’s de facto moratorium on
new approvals for the production and import of GMOs, the politics of biotechnology in
China have notably changed with regard to the commercialization of GM crops. China
appeared poised to commercialize GM varieties of food crops such as maize and rice.
However when the European moratorium began, the commercialization of GM food crops
in China was unofficially and indefinitely put on hold (Glover, 2003).
The move towards process-based regulations suggests that China has started to
follow a precautionary position that places its overall approach closer to the European
model of biosafety regulation than to that of the US.
The discussion below makes clear that protection of Chinese producers and
promotion of China’s own biotechnology enterprises are also key factors in this shift of
position. This helps to explain the restrictions on foreign investment that other
commentators have taken as evidence of a “cooling” towards the technology. Overall it
would appear that the combination of global market imperatives and domestic commercial
considerations make what Huang and Wang refer to as a “wait and see” strategy the only
viable and strategically sensible option to adopt, allowing China to keep open all options
about its future agricultural development (Huang and Wang, 2003).
China can be considered to be pursuing a dual strategy in which it seeks to
consolidate its position as a global contender in GMO production, but is also keen to open
market channels to Europe and elsewhere where there is demand for non-GM produce.
There has been some discussion, for example, of the suitability of China aping Brazil’s

Chapter II – China’s Agricultural Biotechnology Development Strategies and Policies
Agricultural Biotechnology in China: A National Goal 88
strategy of seeking to export GMOs from some areas and GM-free produce from other
parts of the country. The Ministry of Agriculture has floated the possibility of developing
the North-East into the world’s largest producer of non-genetically modified soybeans over
the next five years. This dual strategy would mean that China would push forward fast on
GM foods which offer high yield and resistance to disease while promoting GM-free areas
for crops for sale to rich markets where many consumers still reject the idea of genetically
modified.

2 - The Role of the Private and Public Sectors
The private sector dominates the worldwide research in the field of agricultural
biotechnology. Although exact data about international research expenses is not available,
it is estimated that private companies account for about 75 percent in this area worldwide,
with increasing tendency. Few trans-national companies from industrialized countries
dominate biotechnology research and the degree of concentration on the markets for the
respective technology products is growing (GTZ, 1999). However, China’s experience
with biotechnology has been very different from other countries. Unlike the rest of the
world, in which most plant biotechnology research is financed privately, China’s
government funds almost all of its plant biotechnology research. Ministry of Science and
Technology has increased plant biotechnology project funding in the sample institutes
from $8 million in 1986 to $48 million in 1999. After a number of adjustments, China’s
total investment in plant biotechnology in 1999 was estimated to be $112 million.
Expenditures of this level demonstrate the seriousness of China’s commitment to plant
biotechnology (Huang et al., 2002a).
Since the “Biotechnology Revolution” is being led by private companies, there is
little reason to believe the products that emerge are destined to feed the billions on the
planet or to protect the environment. Because the private sector is motivated by incentives
such as profits, timely return to stockholders, and market share, it is not surprising that the
genetic manipulation funded by the private sector would emphasize investments and
product attributes that would differ from that of a more complete public agenda. Put more
formally, one would expect the private sector to invest in low exclusion goods such as
seed-chemical-machinery “packages” or value-added foods and neglect high exclusion

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goods, such as protection of biodiversity or the improvement of minor traditional crops in
the developing world. Private investments can thus be expected to focus on high-return and
high-value crops, on labor-saving technologies, and the needs of capital intensive farming
in order to feed those who can pay, and not on the needs of the smallholder farmers in the
developing world nor environmental conservation (Batie and Ervin, 2000). Thus, there is a
role for the public sector, which is significant in the Chinese case. The nation’s public-
dominated research system has given China’s researchers a strong incentive to produce
GM crops that increase yields and prevent pest outbreaks. In industrialized countries, 45%
of field trials are for herbicide tolerance and improving product quality; only 19% are for
insect resistance. In China, more than 90% of field trials target insect and disease
resistance (Huang et al., 2002a).
This means that the profile of biotechnology products emerging from research is
very different from most other developed and developing country settings. China has not
so far, for example, concentrated on the herbicide-resistant crops that have been a priority
of multinational corporations. The emphasis has been more on producing new seeds that
lower input costs for farmers, rather than tie them into particular proprietary chemicals. In
the case of Bt cotton some farmers have already made significant savings. Also, there has
been more emphasis on non-transgenic techniques of less interest to the private sector,
because they are less likely to result in patentable products: marker-assisted selection, for
example. Meanwhile, crops are being developed with a “pro-poor focus”, including stress
tolerant crops suited for dry, low-fertility or saline settings (Keeley, 2003b).
In 1997, the release of Bt cotton began China’s first large-scale commercial
experience with a product of the nation’s biotechnology research program. (In the early
1990s, virus-resistant tobacco variety had been commercialized before being removed
from production because of pressure from an international tobacco importer). Response by
China’s poor farmers to the introduction of Bt cotton eliminates any doubt that GM crops
can play a role in poor countries. A survey of agricultural producers in China demonstrates
that Bacillus thuringiensis cotton adoption increases production efficiency and improves
farmer health (Bt cotton in China will be discussed in more detail later on). China
increased its Bt cotton area for the fifth consecutive year from 2.1 million hectares in 2002
to 2.8 million hectares in 2003, equivalent to 58% of the total cotton area of 4.8 million

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Agricultural Biotechnology in China: A National Goal 90
hectares in 2003 (James, 2003). Currently, Bt cotton in China is the world’s most
widespread transgenic crop program for small farmers (Huang et al., 2002a).

3 - Institutional and Policy Measures
The goals of biotechnology development have been defined in several dimensions
in China. From the point of view of users of biotechnology, the government defines the
goals of biotechnology development as improving the nation’s food security, promoting
sustainable agricultural development, increasing farmer income, reducing pesticide use and
improving the environment and human health, and raising its competitive positions in
international agricultural markets along with other public agricultural development
programs. From the point of view of the technology itself, the most frequent statement of
the development goal of biotechnology in China is to create a modern, market responsive,
and internationally competitive biotechnology research and development system (Huang et
al., 2001a).
An ambitious scheme to promote biotechnology research was started in the
beginning of the “Seventh Five-year Plan” (1986-1990) when the first comprehensive
National Biotechnology Development Policy Outline was issued. The Outline was
prepared by more than 200 scientists and officials under the leadership of the Ministry of
Science and Technology (MOST), the State Development and Planning Commission
(SDPC), and the State Economic Commission in 1985 and revised in 1986. Although the
State Council issued this Outline two years later (in 1988), it has been used as policy
guideline in developing modern biotechnology programs in China since 1986. The Outline
defines the goals and objectives of biotechnology development in agriculture, medicine,
chemistry, environment, and food processing. The Outline also provides policy measures
and research priorities in each field of agriculture, medicine, chemistry, environment, and
food processing.
A number of high profile technology programs were launched thereafter (see Table
13 in the annex). Some of the most significant programs include the “863 High-tech Plan”
and the “973 Plan”, both discussed below, the Initiative of National Key Laboratories on
Biotechnology, Special Foundation for Transgenic Plants, Key Science Engineering
Program, Special Foundation for Hightech Industrialization, Bridge Plan, and so on (see

Chapter II – China’s Agricultural Biotechnology Development Strategies and Policies
Agricultural Biotechnology in China: A National Goal 91
Table 13 in annex). Based on the Outline, each biotechnology program develops its own
guideline that specifies the research priorities within its program for a certain period
(usually 5 years), and also annually. In each program there is an expert committee with
members from Chinese Academy of Agricultural Sciences (CAAS), Chinese Academy of
Sciences (CAS), leading universities and several other government organizations that
formulate program guidelines. Therefore in the whole policy making procedure for
biotechnology research, the scientists play a very important role in setting priorities
(Huang et al., 2001a).

3.1 - Key Government Biotechnology Development Programs
3.1.1 - The 863 Plan
The 863 Plan, also called National High-Tech Research and Development Plan,
was approved in March 1986. The 863 Plan supports a large number of applied as well as
basic research projects with a 10 billion yuan budget (equivalent to US$ 3 billion, based on
the official exchange rate of 3.4 in 1985, or US$ 1.2 billion, based on the official exchange
rate of 8.27 in 2000) over 15 years to promote high technology research and development
(R&D) in China. Biotechnology is one of seven supporting areas, with a budget of 1.3
billion RMB yuan in 1986-2000, with 50% of this budget focused on agricultural
biotechnology (Huang and Wang, 2003).
One of the key bodies through which MOST operates is the 863 program. This
program concentrates on applied science and was started in March 1986 after a group of
four scientists persuaded Deng Xiaoping that major investment in science and technology
research and development was vital if the Four Modernizations were to be realized, and
China were not to fall far behind the West. The importance of this change, and of top level
endorsement, cannot be underestimated; while nuclear science and the science
underpinning heavy industry were key parts of the ideology of the new Chinese state,
scientists have not had an easy ride in modern China. Only 15 years before 863 was
formed, for instance, scientists were being labelled as class enemies and being sent to the
countryside for political re-education. Nevertheless since 1986 a vision of a biotech future
has been an integral part of China’s plans for modernization (Keeley, 2003a).

Chapter II – China’s Agricultural Biotechnology Development Strategies and Policies
Agricultural Biotechnology in China: A National Goal 92
Funds allocated to the 863 program have been very significant. The first 15 years of
the program coincided with the 7th, 8th and 9th Five Year Plans, during which time 11
billion yuan (US $ 1.3m) was allocated, with 1.4 billion going on biotechnology. 863 has
now been extended to coincide with the 10th Five Year Plan. For this period 15 billion yuan
(US $ 1.8m) has been allocated, with 3 billion RMB going to biotechnology and 50 per
cent of that to agriculture. There have also been significant strategic overseas sources of
finance, such as the Rockefeller Rice Biotechnology Program noted earlier, from which
China has benefited (Keeley, 2003a).
There has been a clear nationalist edge to China’s biotech program, and this can be
seen in relation to the pride associated with achievements like decoding of the rice genome,
and also in the way that Biocentury – the company promoted by 863 to commercialize Bt
cotton – and the Biotechnology Research Institute present their biotech achievements; their
promotional material.

3.1.2 - The 973 Plan
973 Plan was initiated in March 1997. This plan is similar to the 863 Plan. The 973
plan was established to support basic science and technology research. Life sciences, with
biotechnology as priority, constitute one of the key supporting areas (Huang et al., 2001b).
The National Basic Sciences Initiative, also called the 973 Plan, with a total budget
of 2.5 billion yuan (US$ 302 million, converted at the1997-2002 average exchange rate) in
the period of 1997-2002, was another high-tech research plan initiated in March 1997. This
plan is complementary to the 863 and many other national initiatives on high-tech
development, as it exclusively supports basic research. Life science, with biotechnology as
a priority, constitutes one of the key programs under this plan (Huang and Wang, 2003).

3.1.3 - Natural Science Foundation of China (NSFC)
The Natural Science Foundation of China (NSFC) was founded in 1986 expressly
to support basic research in China. The NSFC promotes basic research in all science and
technology sectors and carries out the SSTC’s plans for basic research. NSFC gives grants

Chapter II – China’s Agricultural Biotechnology Development Strategies and Policies
Agricultural Biotechnology in China: A National Goal 93
for basic research only. 1993 Figures for NSFC show total allocation of yuan 240 million
(US$ 28 million), of which about one third was devoted to life sciences. The largest
fraction, 14 percent, was devoted to clinical medical sciences (Kahaner, 1996).

3.1.4 - Special Foundation of Transgenic Plants Research and Commercialization (SFTPRC)
A new program aimed at strengthening the national research and industrialization
of China’s agricultural biotechnology, the Special Foundation of Transgenic Plants
Research and Commercialization (SFTPRC), was initiated in 1999 by the Ministry of
Science and Technology. This new program is a unique foundation to promote both
research and commercialization of transgenic plants. Only those projects that are jointly
submitted by research institutes and companies are eligible to receive funding from about
half of the programs under SFTPRC. The foundation also requires a significant financial
commitment from companies to commercialize technology generated by a project, a
reflection of China’s aim to accelerate the diffusion of biotechnology. The total budget of
SFTPRC during its first five years (1999-2003) was 500 million yuan (about US$ 60
million) (Huang et al., 2001b).

3.1.5 - Key Science Engineering Program (KSEP)
Concurrently, the Ministry of Science and Technology and the State Development
and Planning Commission jointly sponsored the Key Science Engineering Program
(KSEP), a national program to promote the fundamental construction for research in the
late 1990s. As an example, one extremely large biotechnology project on crop germplasm
and quality improvement through biotechnology received 140 million RMB yuan (US$ 17
million) from KSEP in 2000. Moreover, the State Council passed a new Agricultural
Science and Technology (S&T) Development Compendium in 2001. The compendium
reemphasizes the importance of agricultural biotechnology in improving the nation’s
agricultural productivity, food security, and farmers’ income, and has led to a new decision
to further increase the research budget for the development of biotechnology. The

Chapter II – China’s Agricultural Biotechnology Development Strategies and Policies
Agricultural Biotechnology in China: A National Goal 94
proposed biotechnology development budget for the Tenth Five-year Plan (2001-2005) is
far more than all prior budgets over the past 15 years (Huang et al., 2001b).







Chapter III China’s Agricultural Biotechnology Research Institutions and Administrative System


Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 96
1 - China’s Agricultural Biotechnology Research Institutions and Administrative System
As discussed above, biotechnology and GM crops have appealed to Chinese
policymakers for a number of reasons. How these arguments were made and how this has
worked in institutional terms are important questions. The primary role of the public sector
in deciding to pursue biotechnology, guiding investment and vigorously promoting the new
technology is central to the Chinese story. Policies related to biotechnology in terms of
development strategies, research priorities, the approval and allocation of budgets, and
biosafety management are formulated by several supra-ministries and agencies. The supra-
ministries and agencies include the Ministry of Science and Technology (MOST), State
Development Planning Commission (SDPC), the Ministry of Agriculture (MOA), and the
Ministry of Public Health (MPH), among others (see Figure 6 in annex) (Huang et al.,
2001a; Huang et al., 2001b and Keeley, 2003a).

1.1 - Ministry of Sciences and Technology (MOST)
At the national level, the most important of these is the Ministry of Science and
Technology (MOST). MOST funds scientific research in a number of ways including
through support to a series of National Key Laboratories and a system of competitive
tendering for biotech research grants. It also develops science and technology policy,
therefore it proposes R&D legislation, and implements legislated policies. MOST also
supervises, coordinates, and evaluates biotechnology R&D plans, projects and budgets –
including some competitive grants which it administers. MOST has always had a key role
together with Ministry of Agriculture (MOA) in writing the research part of the five-year
plans, the route through which most financial support to agricultural research is allocated
(Huang et al., 2001a; Huang et al., 2001b and Keeley, 2003a).
Four departments and centers under MOST administer its biotechnology programs
(see Figure 7 in the annex). They are the National Center for Biological Engineering
Development (in charge of High-Tech R&D, including biotechnology), the Department of
Rural & Social Development (especially the Biotechnology Division under this department,
in charge of research program development), the Department of Infrastructure (especially

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 97
Base Construction Division in charge of physical capacity building), and China’s Center
for Rural Development (in charge of commercialization of agricultural high-tech program).
Four giant high-tech and biotechnology programs, are run by MOST and SDPC.
They are the “863 Plan, the “973 Plan, the Special Foundation for Transgenic Plants, and
the Key Science Engineering Program (discussed in Chapter II) (see Figure 8 and Table 13
in annex).

1.2 - State Development Planning Commission (SDPC)
SDPC makes annual, five-year and long-term plans and ultimately determines
national level financial budgets for all ministries. SDPC authorizes the Ministry of Finance
(MOF) to transmit such funds to MOST for onward transmission to the various ministries
(and their research institutes) and the Chinese Academy of Science (CAS). The principle
institution under SDPC in charge of biotechnology is the Department of High Technology
(DHT, Figure 7, in the annex). Under DHT, there are several divisions responsible for
different aspects of advanced technologies. The Agricultural Division specializes in
agricultural biotechnology and together with MOST co-manages one of the major
agricultural biotechnology programs in China, namely the Key Scientific Engineering
Program (KSEP). The other division (Industrialization Division) was established recently
to promoting the commercialization and extension of biotechnology in both agricultural
and non-agricultural areas through a large and unique program, called the High-tech
Industrialization Program (HTIP, Figures 7 and 8, in annex, and see Table 13 in annex)
(Huang et al., 2001a and Huang et al., 2001b).

1.3 - Ministry of Agriculture (MOA)
MOA contains a Science, Technology and Education Department that coordinates
national level biotechnology research within the Ministry’s research system and attempts
to coordinate R&D between national and sub-national levels and provide some guidance to
lower jurisdiction institutes, but local institutions have considerable autonomy. Activities
of research institutes that lie outside the domain of MOA are largely uncoordinated with

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 98
MOA R&D. Coordination between institutes at local levels is generally weak – which
contributes to unnecessary and inefficient duplication of efforts.
MOA contributes to agricultural biotechnology research programs mainly through
its involvement in formulation of overall agricultural biotechnology research and
development plans (i.e., five-year and long-term plans; R&D legislation) and
implementation of legislation and policies. This activity is coordinated by MOST. Only
one Foundation was set in the late 1990s and run by the MOA, this is the China
Agricultural Sciences and Education Foundation (CASEF). The budget of this Foundation
is nothing, however, when compared with the biotechnology programs administered by
MOST and SDPC. Moreover, biotechnology is only a small component of CASEF. The
debate on which ministry is the appropriate institution to manage agricultural research
programs in general, and agricultural biotechnology in particular, has been going for while.
This debate has generally been resolved in favour of MOST. This may be explained by the
fact that agricultural research institutes directly under MOA account for only 8 percent of
total agricultural research staff and 12 percent of the total agricultural research budget in
1999. Most of research is conducted at provincial (39 percent of the budget) and
prefectural (35 percent of the budget) research institutes. Some agricultural research is also
conducted at universities (8 percent of budget) and at CAS and other ministries (8 percent
of budget in 1999) (Huang and Hu, 2001).
While MOST is responsible for management of biosafety in general, MOA is in
charge of the formulation and implementation of biosafety regulations on agricultural
biotechnology in particular. Several divisions within MOA are involved in agricultural
biosafety management. The Office of Agricultural Genetic Engineering Safety
Administration (OAGESA) and the Biosafety Division of Agricultural Genetic
Engineering (BDAGE) under the Center of Science and Technology Development (CSTD)
and the Planning Division under the Department of Science and Education are jointly
responsible for the biosafety management. OAGESA and BDAGE focus mainly on
biosafety assessment applications for GMOs and implementation of biosafety regulations.
The Planning Division is responsible for the approval of GMOs release and making
decisions on biosafety issues (Huang et al., 2001a).


Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 99
1.4 - Other Ministries and Agencies
Currently, there are about 150 laboratories at national and local level located in
more than 50 research institutes and universities across the country working on agricultural
(plant and animal) biotechnology (see Figures 6 and 7 in annex). Laboratories that were
evaluated and selected as National Key Laboratory (NKL) have been equipped with
advanced instrumentation and also received extra operating funds to strengthen the
biotechnology research program at the recipient laboratory. Both SDPC and MOA
administrated the laboratory selection program. NKLs are denominated “Open
Laboratories” because of the mandate that they should train and allow usage of both
domestic and foreign guest researchers (Huang et al., 2001b).
The laboratories are open to investigators from outside institutions and are intended
to serve as national training centers. In general, these key laboratories have been
established at the most advanced biotechnology research centers in China: Peking
University, Fudan University, Beijing Institute of Virology, Beijing Institute of Biophysics,
Shanghai Institute of Biochemistry, Shanghai Institute of Plant Physiology, and Shanghai
Institute of Cell Biology (Hamer and Kung, 1989).
The value of the key laboratories as training centers is dubious since, in general,
visiting scientists from distant provinces are unable to apply their new knowledge after
returning to their home institutions that lack adequate facilities. On the other hand, the
program has allowed some of China’s best biology research centers to make great
improvements in their facilities and equipment. An example is the Laboratory of Genetic
Engineering at Fudan University. Rather than building a new facility, this key laboratory
was integrated with existing laboratories of the university’s Institute of Genetics, and the
money was spent on new instrumentation. This allows visiting investigators maximum
contact with well-trained university scientists and, at the same time, permits access by
scientists to highly sophisticated laboratory instruments (Hamer and Kung, 1989).
Over the last 2 decades, China established 30 National Key Laboratories (NKL).
Among these NKLs, twelve NKLs are exclusively working on and 3 NKLs have major
activities on agricultural biotechnology. Besides NKLs, there are ministerial and provincial
biotechnology laboratories and programs.

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 100
At the nation level, the MOA, Chinese Academy of Sciences (CAS), State Forestry
Bureau (SFB), and Ministry of Education (MOE) are the major authorities responsible for
agricultural biotechnology research (see Figure 6 in annex). Under MOA, there are 3 large
academies, Chinese Academy of Agricultural Sciences (CAAS, about 8000 research and
supporting staff), Chinese Academy of Tropical Agriculture (CATA), and Chinese
Academy of Fisheries (CAFi). Among 37 institutes in CAAS, there are 12 institutes and 2
National Key Laboratories (NKL) and 5 ministerial laboratories that conduct
biotechnology research programs. CAFi and CATA also have several biotechnology
laboratories or programs, and each has one NKL in biotechnology.
Agricultural biotechnology research is also undertaken by national institutes outside
the MOA system. These include 7 research institutes and 4 NKLs under CAS, research
institutes within the Chinese Academy of Forestry (CAFo) under the State Forest Bureau,
and universities under the Ministry of Education (MOE). There are 7 NKLs located in 7
leading universities conducted agricultural biotechnology or agriculturally related basic
biotechnology research. Other public biotechnology research efforts on agriculturally
related topics include agro-chemical (e.g. fertilizer) research by institutes in the State
Petro-Chemical Industrial Bureau (Huang et al., 2001a and Huang et al., 2001b).
Agricultural biotech research at the provincial level follows a similar institutional
framework to that at the national level (see Figure 6 in annex). Each province has its own
provincial academy of agricultural sciences, and at least one agricultural university. Each
academy or university at provincial level normally has 1-2 institutes or laboratories
focused their works on agricultural biotechnology. Local biotechnology research is
financed by both local government (core funding and research projects) and central
government (research projects only) (Huang et al., 2001a). At provincial level funds come
directly from Provincial Science and Technology Commissions; indeed provincial level
Academies of Agricultural Science are under the STCs, rather than agricultural bureaux.
Summarizing, the institutional framework of agricultural biotechnology program in
China is very complex, having a large number of participating institutions engaged in
agricultural biotechnology. However, multiple sources of funding (MOST, SDPC, MOA,
local and province), combined with the large number of biotechnology research institutes
and laboratories, and the lack of coordination and collaboration among research institutes
both at the national and the provincial level, have led to large overlaps of the agricultural

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 101
biotechnology research programs and has contributed to unnecessary and inefficient
duplication of efforts, particularly at the local level (Huang et al., 2001b).

2 – Agricultural Biotechnology Research Indicators
2.1 - Human Resources
High quality researchers and support staff are invaluable elements for any
successful biotechnology program. In order to build and maintain a strong biotechnology
industry (production and research), China must inevitably lure back many of its students
who went away to the U.S., Europe and Japan for advanced training.
Although moving towards prosperity, China faces some circumstantial and self-
imposed difficulties in convincing these now well trained professionals to return to its own
research institutions and biotechnology companies. The government policy of trying to
wean research institutions off government support may be premature and could possibly
serve to discourage returning scientists. Money will be one problem. While desiring the
return of its overseas students, the government is also trying to save money by forcing
institutions into “self-sufficiency”. In the end though, these laboratories will become
“dependent” on earning harder to obtain funds from sources such as international grants
and joint or contracted projects with private companies. Though there has been the creation
of at least one Singapore-based investment fund that speculates on the industry's long term
prospects, local private investment hasn't materialized to any great extent, yet to compete
with inflation of more than 10% and often in the teens, local investors are looking for
quicker ways to get return on their investment. This uncertain funding period will probably
discourage those who have comfortable jobs from returning. Circumstantially, China's still
developing infrastructure and under equipped research facilities also serve to discourage
students from leaving their properly equipped laboratories located in countries which offer
a better standard of living (Kahaner, 1996).
This is not to say that China has not taken some steps to attract its foreign-trained
professionals. On the contrary, China now offers all returning PhD's ranking positions, at
least associate professorships, and relatively spacious 2-3 bedroom apartments in research
institution apartment buildings.

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 102
Unfortunately this encouragement program is not without potential problems. First,
a large number of returning students may place an unprecedented stress on the research
institution's physical and organizational resources that might undermine the benefits of the
talent and knowledge, which they bring to China. Second, the current meagre research
budgets allotted by local biotechnology companies cannot absorb these returning scientists.
Concurrently, many better-paying positions for these well educated bi-lingual individuals
in non-biotechnology industries may siphon off some of the returnees. Lastly, the increased
competition for a relatively fixed amount of funding will increase the already considerable
amount of time wasted searching for funding.
There are already several bright spots in Chinese biotechnology, often centred on
returning scientists. One such is Yang Huanming, who trained in Europe and America
before returning to start the Beijing Genomics Institute. As well as leading China's
contribution to the human genome sequence and working with Danish partners on the pig
genome, the institute announced completion of a detailed map of the rice genome. It is also
involved in the International HapMap Project, a five-country initiative launched in October
2002, to follow up the Human Genome Project with a large-scale study of human genetic
variation and its relation to disease (The Economist – Science & Technology, 2002).
Similarly, the National Engineering Research Centre for Beijing Biochip
Technology is headed by Cheng Jing, an engineer and molecular biologist trained in
Britain and America. Dr Cheng is one of China's most entrepreneurial academics, having
already spun out some of the centre's technology to Chinese and American start-ups. He
was working on two diagnostic chips, for infectious disease and tissue transplantation, in
trials at Beijing hospitals (The Economist – Science & Technology, 2002).
Another hotspot is the Chinese National Human Genome Centre in Shanghai. Here,
the focus is on studying the genetics of diseases that particularly afflict the Chinese
population, such as hepatocellular carcinoma, a form of liver cancer. Stem-cell research is
in the works at a handful of centres. Most of China's stem-cell scientists are focused on
adult cells, and half a dozen stem-cell banks have already sprung up. But some researchers
are working in the more controversial area of embryonic stem cells. Among them is Sheng
Huizhen, at Shanghai Second Medical University, who is trying to generate stem cells by
transferring nuclei from human skin cells into rabbit eggs (The Economist – Science &
Technology, 2002).

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 103
Dr Sheng's experiments are strictly academic; she wants to understand better the
early stages of cellular reprogramming, work that requires thousands of eggs that are
unavailable from human sources. After more than a decade at America's National Institutes
of Health, she decided to return to China, as increasing restrictions made this line of
research difficult. These are interesting times indeed, with academics returning to China
for the intellectual freedom they cannot find in the West (The Economist – Science &
Technology, 2002).
For all these scientific strengths, the expansion of Chinese biotechnology is held
back by several problems. One is funding. Biotechnology is not cheap: long development
times and scientific uncertainty mean that it takes lots of money to develop a successful
product. At the moment, most Chinese biotechnology is bankrolled by the government,
although private money is beginning to trickle in (The Economist – Science & Technology,
2002).
On the whole, biotech entrepreneurs such as Dr Cheng would rather have private
money than deal with the strings that inevitably come with public funds. So far, private
investors in China are far less sophisticated than their foreign counterparts. Zhao Guoping,
director of Shanghai's genomics centre, has seen plenty of millionaires beat a path to his
door, only to turn back when they hear how risky biotechnology can be. Some investors
from Taiwan, Singapore and Hong Kong have taken the plunge. But venture-capital groups
from Europe and America are holding off until they can be assured of a way to recoup their
investment, preferably by floating any resultant company on the stockmarket, or selling it
to a larger firm (The Economist – Science & Technology, 2002).
China’s public agricultural research system, the largest in terms of research
numbers in the world, employs more than 130,000 staff (Huang and Hu, 2001). China’s
agricultural biotechnology research system probably is also one of the largest in the world.
Table 14 in annex shows the number and composition of plant biotechnology research staff
in a recent study conducted by the authors. The total researchers in 29 plant biotechnology
research institutes reached 1657 in 1999 (see Table 14 in annex). For China as a whole,
Huang et al. (2001b) estimate that the number of researchers in plant biotechnology could
be over 2000.
Results from 22 institutes with complete information show that the number of total
staff involved in biotechnology doubled within 13 years increasing from 641 in 1986 to

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 104
1205 in 1999 (see Table 14 in annex). Of total professional staff, 484 were involved in
research directly, whereas 207 were in management positions. Total professional staff
increased 142% since 1986. The total number of professional staff in all the 29 plant
biotechnology institutes reached 691 in 1999. Among total staff, almost 60 percent was
professional (i.e., researchers and research managers) (Huang et al, 2001b).
The share of the professional staff has been rising over time (see Table 14 in annex).
Professional staff increased by 142 percent within the same period. The most significant
growth was in the late 1980s, reflecting the large movements of several biotechnology
promotion initiatives by the government in the second half of the 1980s (see Table 14 in
annex) (Huang et al, 2001b).
Similar to other agricultural research program in China, plant biotechnology
research primarily is built around the research institutes (see Table 14 in annex). In the 29
institutes surveyed in the study made by Huang et al. (2001b) in 1999, there where 633
researchers employed at research institutes. Total staff in universities sum 166. Of total
research staff in universities, 72 were researchers, 52 managers, and 42 support staff. In
contrast there were 1491 personnel in institutes, of which 633 were researchers, 212
management and 646 were support staff. It is interesting to note that the total personnel in
universities represented 5 percent of the total universities’ research staff and about 4
percent of all the agricultural research system.
A significant improvement occurred in human capacity in biotechnology research
in China. In 1986 there were only 5 researchers holding a PhD degree (see Table 15 in
annex). The number of researchers with a PhD reached 141 in 1999 for 22 institutes and
203 for 29 institutes. Within professional staff, the share of researchers holding PhD
degrees increased from 2 percent in 1986 to about 20 percent in 1999. The share of
professional staff holding a PhD degree is expected to keep rising in the future as the
ability to conduct PhD educational programs in biotechnology has been strengthened in
several of the surveyed institutes. The percentage of professional researchers with PhD
degree in universities is much higher than that in research institutes. Among 124
professional staff in universities, 58 held PhD degrees in 1999, accounting for 47 percent
of the total. In research institutes, researchers with PhD degree represented 17 percent of
total staff in 1999. The percent of PhD degree holding staff varied widely between
institutes and universities. The large number of biotechnology research institutes and wide

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 105
variation of human capacity within institutes will be a challenge for China to consolidate
its national biotechnology research programs for any given amount of research budget in
the future (Huang et al, 2001b).
While the share of researchers with a PhD degree in biotechnology is still low in
comparison to leading biotechnology countries, it is interesting to note that this share is
much higher than that in the Chinese agricultural research system in general. In the
national agricultural research system, researchers holding a PhD degree accounted for only
1.1 percent of the total professional staff in 1999 (Huang and Hu, 2001).
Another unique characteristic of biotechnology research in China is that the share
of female researchers relative to the total professional staff is higher than in the rest of the
agricultural research system. In plant biotechnology, the professional female researchers
accounted for about 33 percent of the total (see Table 16 in annex). In contrast, the percent
of female researchers in the rest of the agricultural research system was about 30 percent of
the total in 1999. The different working environment compared to non-biotechnology
research may explain the relatively larger share of females in biotechnology research.
Agricultural research in the rest of the Chinese research system involves extensive field
activities in which the female researchers may have less comparative advantage than male
researchers due to cultural and social constraints of Chinese society (Huang et al, 2001b).

2.2 - Financial Resources
Accordingly to the study conducted by Huang et al. (2001b) in 1999, a significant
growth in biotechnology research investment was observed in China during the 1990s (see
Table 17 in annex). Biotechnology research investment was insignificant during the early
1980s in China. For 22 of the institutes surveyed in their study, total investment in plant
biotechnology research reached 16 million yuan in 1986 when China formally started its
863 Plan. By 1990, investments in biotechnology grew to 27.7 million yuan, representing
an increase of 73 percent over 1986 or roughly a 20 percent annual growth rate. Strong
growth during this period was mainly due to the increasing research project budgets and
equipment expenses. Investments in biotechnology reached 92.8 million yuan in 1999 for
22 institutes surveyed. Total investments increase to 130.8 million yuan if information for
all 29 institutes is included.

Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
Agricultural Biotechnology in China: A National Goal 106
The growth rate of biotechnology research investment slowed down to 4 percent in
1990-95. The slow-down of investment growth was expected as large investments in
biotechnology equipment were nearly completed during the early 1990s. On the other hand,
the growth in research project budgets was still remarkable. The annual growth rate of
research project budgets remained as high as 10 percent in 1990-95. Several large
biotechnology programs (or programs with a biotechnology component) were initiated
since the mid-1990s. These include the “973” Plan, Special Foundation of Transgenic
Plants, and Key Science Engineering Program, and the Bridge Plan. With the
implementation of these programs, biotechnology research investment increased
dramatically from 32.7 million yuan in 1995 to 92.8 million yuan in 1999 for the 22
institutes studied. This increase represented an annual growth of about 30 percent. Based
on our estimates, total investments in plant biotechnology research reached 140 million
yuan in 1999 for the 29 institutes surveyed (Huang et al, 2001b).
The main source of investments in biotechnology research in China is the national
government. Donor agencies contributed between 1.5 percent in 1986 to 6.9 percent of the
total plant biotechnology budget for 22 institutes studied in 1999 (see Table 17 in annex).
Funds from competitive grants supporting research projects accounted for two thirds of the
total budget. The increasing share of competitive grants reflects the change in priority from
capacity building to an increase in specific research projects (Huang et al, 2001b).
Of the total investment in plant biotechnology research in the sampled institutes, 28
percent (or 36.7 million yuan) was allocated to research in universities, whereas the
remaining 72 percent (94.1 million yuan) to research institutes in 1999 (see Table 17 in
annex). Because the share of researchers in universities represents about 10 percent of the
total, this implies that the research expenditure per scientist is much higher in the
universities than in the research institutes. This pattern of investment is expected, as the
share of the researchers with a PhD degree is higher in the universities than in research
institutes (Huang et al, 2001b).
Among the total budget, payments for personnel accounted between 36 percent in
1986 to 18 percent in 1999 (see Table 18 in annex). If information for all 29 institutes is
included the percent expenditures on personnel reaches 21 percent. This share is much
lower than in developed countries where they normally reach half of the total budget
(Huang and Hu, 2001). The lower share of personnel costs may partially reflect a lower

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level of human resources but may also point to a relatively lower cost of conducting
biotechnology research in China. As the level of private sector investments in agricultural
R&D increases in China (Huang and Hu, 2001), public biotechnology research programs
may face the challenge of keeping its best professional staff from moving to the private
sector, particularly if the salary and incentive system for public agricultural research is not
improved in the future.
Operating expenditures have increased from 3 million in 1986 to 44 million yuan in
1999. If all 29 institutes sampled in the survey are included this figure increases to 56.2
million yuan. The increase from 3 to 44 million yuan represents an increase from 23 to 52
percent in 1986 and 1999 respectively. Conversely, capital expenditures have increased
from 5.5 million yuan in 1986 to 21.5 million yuan in 1999. However, the increase in
capital expenditures represents a decrease of the capital’s share of the total budget from 42
% in 1986 to 27% in 1999 (Huang et al, 2001b).
While both research investments and the number of researchers increased in the
past 15 years, the former has grown much faster than the latter, and thus research
expenditures per researcher increased rapidly. Expenditure per professional staff doubled
from 46 thousand yuan in 1986 (at constant 1999 price) to 115 thousand yuan in 1999 (see
Table 19 in annex). Expenditure per staff member has tripled from 20.6 thousand yuan in
1986 to 66.0 in 1999. If information from 29 institutes is included the increase in
expenditures changes slightly. Huang et al. (2001b) personal communications with
scientists and leaders of the 29 biotechnology institutes surveyed in 1999 reveal that, while
most of them are satisfied with rising research budgets, many of them are still concerned
with the low level of research expenditures per staff member and the fragmentation of
biotechnology research projects over many research institutes.

3 - Agricultural Biotechnology Research Focus
3.1 - Priorities for Agricultural Biotechnology Research
Table 20 in annex summarizes research priorities of plant biotechnology identified
in various Biotechnology Development Outlines for the past 15 years in China. In the
selection of major crops to be included in the biotechnology programs, cotton, rice, wheat,
maize, soybean, potato, and rapeseed have been consistently listed as priority crops for

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research funding from the national biotechnology programs since the mid-1980s. Total
area sown to crops listed as priorities was over 100 million hectares, accounting for more
than two-third of the total crop area sown in China in the 1990s (Huang et al, 2001b and
Huang and Wang, 2003).
Cotton has been consistently selected as a top priority crop not only because of its
importance due to area sown and its contributions to the textile industry and trade, but also
because of the serious problems with the associated rapid increase in pesticide applications
to control insects (i.e., bollworm and aphids) (Huang and Wang, 2003).
Rice, wheat and maize are the three most important crops in China. Each accounts
for about 20 percent of the total area planted. Production and market stability of these three
crops are primary concern of the Chinese government as they are central to China’s food
security. National food security, particularly related to grains, has been a central goal of
China’s agricultural and food policy and has been incorporated into biotechnology research
priority setting. Grain crops have been prioritized not only for biotechnology and non-
biotechnology research programs, but also for irrigation investment and other government
support programs in agriculture (Huang and Wang, 2003).
Genetic traits viewed as priorities may be transferred into target crops. Priority
traits include those related to insect and disease resistance, stress tolerance, and quality
improvement (see Table 20 in annex). Pest resistance traits have top priority over all traits.
Although input decreasing or output enhancing have been the main priority of
Chinese agricultural biotechnology research, quality improvement traits have recently been
included as priority traits in response to increased market demand for quality foods.
Quality improvements have been targeted particularly to rice and wheat, as consumer
income rises in China. Having quality improvement traits as a priority is associated with
recent government structural change policies in agriculture that emphasizes the production
of better quality food. In addition, stress tolerance traits — particularly resistance to
drought — are gaining attention particularly with the growing concern over water
shortages in northern China. Northern China is a major wheat and soybean production
region with significant implications to China’s future food security and trade.
Tables 21 through 25 (in annex) provide lists of all the plant biotechnology
products approved for field trial, environmental releases, and commercialization.
Interviews with the scientists involved in biotechnology research programs indicate that

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most cases approved for various stages of bio-safety assessment presented in Tables 21
through 25 (in annex) are in general consistent with the biotechnology development
China’s priority setting framework as presented in Table 20 in annex. It is worth noting
that among the cases from domestically generated biotechnology that were approved for
environmental release from 1997 to July 1999, approximately 85 percent were from the 29
institutes in which they conducted their survey for this study. In addition, of the 26 cases
approved for commercialization so far, twenty three cases came from the institutes
sampled in their study and 3 were from Monsanto (Bt cotton) (Huang et al, 2001b).
Table 21 in annex presents the available plant events in China up to 1999. A plant
event is the specific combination of a genetic transformation construct and a plant host.
This list also includes the stage in which each plant event is in the biosafety approval
process. There are 18 crops with events that have entered the biosafety approval process.
There are 39 events, of which 9 are for insect resistance, 20 for disease resistance, 2 for
herbicide resistance, 5 for agronomic or quality modification, and 3 for stacked insect or
disease resistance and quality modification (Huang et al, 2001b).
Accordingly to Huang et al. (2001b), in 1997 there were 57 applications for field
trial, environmental release, and commercialization (see Table 22 in annex). Of these
China approved 46 requests for agricultural biotechnology products. The total number of
approved cases for field trials, environmental release or commercialization reached 251 in
1999. Of the 251 approved cases, 92 where approved for field trials, 74 for environmental
release and 33 for commercialization. Up to July 1999, 44 cases have been approved for
field trials in China (see Table 23 in annex). Of the 44 cases approved for field trials 21 are
for resistance to insects, 15 resistant to disease, 7 with an altered agronomic characteristic,
and 1 with a stacked herbicide resistance and altered agronomic response. Rice has the
most approved cases with 21, followed by cotton with 10, tomato with 3, maize and
tobacco with 2. Table 24 in annex presents the cases approved for environmental release in
China. 51 cases have been approved, of which are for resistance to insects, 17 for
resistance to disease, 6 are for a modified agronomic characteristic or response, and 3 are
for herbicide resistance. Cotton has the highest number of approved cases for
environmental disease with 14, followed by rice with 10, potato with 8, tomato and
tobacco with 10, and maize with 4, and sweet pepper and poplar with 2. Among the
approved releases for commercialization (see Table 25 in annex) sixteen approvals were

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granted to Bt cotton (varieties developed by CAAS and by Monsanto), 5 to tomatoes with
resistance to insects or improved shelf-life, a petunia with altered flower color, and sweet
pepper resistant to diseases.

3.2 - Plant Biotechnology Products in the Research Continuum
There are over 120 different genes and more than 50 different plant varieties that
have been used in plant genetic engineering in China since the middle 1980s. Plant
biotechnology research has emphasized the development of new varieties for major crops
seemed as high priority by the Chinese government such as cotton, rice, wheat, maize,
soybean, potato and rapeseed. Genetic traits viewed as priorities may be transferred into
target crops. Priority traits include those related to insect and disease resistance, stress
tolerance, and quality improvement (Huang et al., 2001b). Pest resistance traits have top
priority over all traits. Recently, quality improvement traits have been included as priority
traits in response to increased market demand for quality foods. In addition, stress
tolerance traits - particularly resistance to drought - are gaining attention with the growing
concern over water shortages in northern China.
The main achievements include: newer research focuses on the isolation and
cloning of new disease - and insect-resistance genes, including the genes conferring
resistance to cotton bollworm (Bt, CpTI), rice stem borer (Bt), rice bacterial blight (Xa22
and Xa24), rice plant hopper, wheat powdery mildew (Pm20), wheat yellow mosaic virus,
and potato bacterial wilt (cecropin B). These genes have been applied in plant genetic
engineering since the late 1990s. Significant progress has also been made in the functional
genomics of arabidopsis and in plant bioreactors, especially in utilizing transgenic plant to
produce oral vaccines (Huang and Wang, 2003).

3.2.1 - Transgenic plants resistant to insects
• Cotton: The Biotechnology Research Institute (BRI) of the Chinese Academy of
Agricultural Sciences (CAAS) has developed insect-resistant Bt cotton. The Bt gene’s
modification and plant vector construction technique was granted a patent in China in 1998.
The Bt gene was introduced into major cotton varieties using the Chinese-developed pollen

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tube pathway (Guo and Cui, 1998 and 2000 quoted in Huang et al., 2001b). Five
transgenic, open-pollinated varieties and one transgenic hybrid Bt cotton variety have been
registered with the new plant variety registration authorities. Bt cotton has been approved
for commercialization in 9 provinces since 1997. The area planted to Bt cotton reached
around 700,000 hectares, nearly equally shared by Chinese and Monsanto Bt varieties (Bt
cotton will be discussed with more detail later on).

• Rice: Several research institutes and universities have been working on transgenic rice
resistant to insects since the early 1990s. Transgenic hybrid and conventional Bt rice
varieties, resistant to rice stem borer and leaf roller were approved for environmental
release in 1997 and 1998. An additional transgenic rice variety that expressed resistance to
rice plant hopper has been tested in field trials. Through anther culture, the CpTi gene and
the Bar gene were successfully introduced into rice, which expressed resistance to rice
stem borer and herbicide (NCBED, 2000; Zhu, 2000 quoted in Huang et al., 2001b).
More efforts have been put on the GM rice sector. Numerous research institutes and
universities have been working on transgenic rice resistant to insects since the early 1990s.
Transgenic hybrid and conventional Bt rice varieties, resistant to rice stem borer and leaf
roller were approved for environmental release in 1997 and 1998. The transgenic rice
variety that expressed resistance to rice plant hopper has been tested in field trials. Through
the anther culture, the CpTi gene and the Bar gene were successfully introduced into rice,
which expressed resistance to rice stem borer and herbicide (NCBED, 2000; Zhu, 2000
quoted in Huang et al., 2001b).
Transgenic rice with Xa21, Xa7 and CpTi genes resistant to bacteria blight or rice blast
where developed by the Institute of Genetics of CAS, BRI, and China Central Agricultural
University. These transgenic rice plants have been approved for environmental release
since 1997 (NCBED, 2000 quoted in Huang et al., 2001b). Significant progress has also
been made with transgenic plants expressing drought and salinity tolerance in rice.
Transgenic rice expressing drought and salinity tolerance has been in field trials since 1998.
Genetically modified nitrogen fixing bacteria for rice was approved for commercialization
in 2000. Technically, the commercialization of various GM rice is ready. However, the
commercializing GM rice production has not yet been approved as the policy makers’
concern on food safety, rice trade (China exports rice though the amount traded is small

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compared to its consumption) and its implication for the commercialization of other GM
food crops such as soybean, wheat and maize.

• Maize: A transgenic Bt maize resistant to maize stem borer was developed by the China
Agricultural University, which was approved for environmental release in 1997 (OGESA,
1999 quoted in Huang et al., 2001b).

• Soybean: The Jinlin Academy of Agricultural Sciences recently developed a transgenic
Bt soybean that expresses resistance to the soybean moth. The transgenic lines Jilin 27 and
Heilong 35 have already been approved for field trials and environmental release in 1997
(NCBED, 2000 quoted in Huang et al., 2001b).

• Others: Transgenic tobacco, papaya, poplar tree, and a few others now are either in the
stages of field trials or environmental releases (OGESA, 1999; Wu, Sun, and Yao, 2000
quoted in Huang et al., 2001b). Research in transgenic wheat resistant to insect (i.e., aphids)
is in the research pipeline.

3.2.2 - Transgenic plant resistant to disease
• Cotton: BRI of CAAS made a breakthrough in plant disease resistance by developing
cotton resistant to fungal diseases. Glucanase, glucoxidase and chitnase genes were
introduced into major cotton varieties. Transgenic cotton lines with enhanced resistance to
Verticillium and Fusarium were approved for environmental release in 1999 (BRI, 2000
quoted in Huang et al., 2001b).

• Rice: Transgenic rice with Xa21, Xa7 and CpTi genes resistant to bacteria blight or rice
blast where developed by the Institute of Genetics of CAS, BRI, and China Central
Agricultural University. These transgenic rice plants have been approved for
environmental release since 1997 (Zai and Zhu, 1999; NCBED, 2000 quoted in Huang et
al., 2001b).


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• Potato: Synthesized cecropin polypeptide genes and transgenic potato lines resistant to
bacterial wilt were developed by BRI in the mid-1990s. These genetically modified potato
lines resistant to bacterial wilt were approved for environmental release in Beijing and
Sichuan province in 1997 (Jia and Tang, 1998 quoted in Huang et al., 2001b).

3.2.3 - Other plant biotechnologies
According to Huang et al. (2001b), significant progress has been made with
transgenic plants expressing drought and salinity tolerance in rice and wheat. Transgenic
rice expressing drought and salinity tolerance has been in field trials since 1998.
Genetically modified nitrogen fixing bacteria for rice and maize, as well as phytase for
feed additives, were approved for commercialization in 2000. In addition to plant genetic
engineering, tissue culture techniques have also have been often applied in horticulture, to
produce virus free potatoes and strawberries. Several adopted rice and sugar beet varieties
were developed by anther culture. Progress has also been made in molecular marker
assisted selection of plant varieties. For example, a new soybean line with high yield and
resistance to cyst nematode disease was produced in 1998. In microbial research, several
valuable insecticidal genes were isolated and cloned.

4 - Bt Cotton in China
4.1 - Adoption of Bt Cotton in China
Cotton is an important economic and fibre crop, grown in 70 countries in the world.
Over 180 million people are associated with the fibre industry that produces 20 to 30
billion dollars worth of raw cotton. Although great progress has been made in the field of
improvement of cotton with conventional breeding methodology, it is time-consuming and
commercialization of new cotton varieties often takes 6 to 10 years. Compatibility
limitations narrow the gene pool available for this process. A number of these
shortcomings may be overcome by plant biotechnology. For example, control can be
exerted over selection of the gene(s) and its expression. The gene pool can be expanded to
all living organisms (plants, animals, bacteria and fungi). As technology is refined, custom-

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made synthetic genes will become another source for desired traits. Thus, cotton
biotechnology can be significantly applied for the improvement of cotton (Zhang et al.,
2000).
China produces more cotton than any country in the world despite the fact that both
India and the USA have larger areas of cotton. In 2001/02, China grew 4.8 million hectares
of cotton with a high yield of 1,103 kg of lint per hectare to produce 5.3 million metric tons
(MT), equivalent to 25% of world cotton production. China also consumes more cotton
than any other country (5.4 million MT, equivalent to 27% of world consumption) and
imported 100,000 MT compared with 50,000 MT of exports in 2000/01 (ISAAA, 2004).
The adoption rates for Bt cotton in China (Pray et al., 2002) indicate that Bt cotton
quickly escalated (Table 26) from less than 1% (<0.1 million hectares) in 1997, to 2% (0.1
million hectares) in 1998, 11% (0.4 million hectares) in 1999, 22% (0.9 million hectares)
in 2000, and 31% (1.5 million hectares) in 2001. The initial 500,000 small farmers who
adopted Bt cotton in 1998 derived significant and multiple benefits from the technology.
Because farmers who adopted Bt cotton in 1998 were very satisfied with the experience,
they were keen to continue the practice in 1999 and were joined by 1 million other small
cotton farmers, which in turn led to the planting of 400,000 hectares of Bt cotton in 1999.
This was equivalent to 11% of the Chinese national cotton area of 3.7 million hectares in
1999. The number of cotton farmers in China fluctuates annually, depending on the planted
area of the cotton crop which ranged from 3.7 million hectares in 1999, to 4.8 million
hectares in 2001 (Table 26). The estimated number of Bt cotton farmers in China has
increased from a few thousand at its introduction in 1997 to 0.5 million in 1998, to 1.5
million in 1999, to 2.7-3 million in 2000, and 4 to 5 million in 2001.

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Table 26 – Production of Bt Cotton in China, 1997-2001.
Year Cotton Area Bt Cotton
Area
Bt Cotton Number of
Cotton
Farmers
Number of Bt
Cotton
Farmers
Ha Millions Ha Millions % of Area (Millions) (Millions)
1997 4.5 <0.1 1 10.8 <0.1 1998 4.5 0.1 2 10.7 0.5 1999 3.7 0.4 11 8.5 1.5 2000 4.0 0.9 22 9.0 2.7 to 3.0 2001 4.8 1.5 31 13.0 4.0 to 5.0
Source: Pray et al. (2002).

Bt cotton now occupies about one third of the total cotton area in China. It is widely
adopted in the Yellow River Valley where some provinces like Hebei are almost
exclusively Bt cotton, 80% in Shandong, about 30% adoption in Anhui and Henan, and
even small areas in the Northwest province of Xinjiang where bollworm infestation is
much lower, and where cotton is grown under irrigation (see Figure 9 in annex). Estimates
of adoption are probably conservative, particularly for the last two years, when farmers
have become increasingly aware of the value of Bt cotton, and save/sell more of their own
seed and acquire it through many more formal and informal channels (Pray et al., 2002).
Cotton is of superior importance to the Chinese textile industry, which is the largest
in the world. This industry employs nine million workers, and its contribution to China’s
export volume comprises about 25 per cent of the total. Currently China is the biggest
cotton producer in the world; about 50 million farming households grow cotton (Zhang et
al., 2000). Although cotton only occupies between two and three per cent of the total
cultivated area, it renders seven to ten per cent of the total value of agriculture. However,
since the end of the 1980s, cotton production has decreased due to a decline in both yield
and coverage area. The decline in yield of 15 to 30 per cent has mainly been caused by
bollworm infestation. In 1992 and 1993, outbreaks of bollworm infestation in China caused
direct economic losses of about US$ 630 million (Song, 1999). According to Jia (1998),
quoted in ISAAA (2004), the loss was even higher, valued at the national level in 10
billion RMB equivalent to US$1.2 billion (calculated at the official exchange rate of 8.27
RMB = US$1.00). Furthermore, farmers were discouraged from growing cotton. As a

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result, the national growing area decreased by 10–15%, and there is a tendency for cotton
production to move from relatively favourable areas towards marginal regions (Zhang et
al., 2000).

4.2 - Pest Control in China
The growing use of farm chemicals, especially chemical fertilizers and pesticides
was a major factor in the rising production and productivity of China’s post-transition farm
sector. Various kinds of pesticides have been used on a large scale to protect crops from
damage inflicted by insects and diseases in China since the 1950s (Stone, 1988).
Particularly after the spread of modern, semi-dwarf, high-yielding varieties in the 1960s
and 1970s, China’s producers began using increasingly higher levels of pesticides to offset
and avoid damage inflicted by insect and diseases (Huang et al., 2002c)
Initially, farmers used chlorinated hydrocarbons (such as DDT) until they were
banned for environmental and health reasons in the early 1980s (Stone, 1988). In the mid-
1980s, farmers began to use organophosphates, but in the case of cotton, pests developed
resistance. In the early 1990s, farmers began to use pyrethroids, which were more effective
and safer than organophosphates. However, as in the case of other pesticides, China's
bollworms rapidly began to develop resistance to pyrethroids in the mid-1990s. At this
time, farmers resorted to cocktails of organophosphates, pyrethroids and whatever else
they could obtain (including DDT, although the use of cholorinated hydrocarbons is illegal)
with less and less impact on the pests (Pray et al., 2002; Huang and Pray, 2002 and Huang
et al., 2002d).
With rising pest pressure and increasingly ineffective pesticides, the use of
pesticides by cotton farmers in China has risen sharply. Farmers use more pesticide per
hectare on cotton than on any other field crop in China (Huang et al., 2002a). In aggregate,
cotton farmers use more pesticide than farmers of any other crop except rice (as the sown
area of rice is many times more than that of cotton). Per hectare pesticide cost reached
US$101 in 1995 for cotton, much higher than that for rice, wheat or maize, and many times
more than the level applied by most other farmers in the world. Cotton production
consumes nearly US$500 million in pesticides annually (Huang et al., 2002b).

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The nation’s farmers apply more chemical pesticides on their crops than producers
in almost any country in the world. Their annual applications have increased in recent
years, rising from 211,000 metric tons (mt) of active ingredients in 1985 to 340,000 mt in
1996. Without doubt, pesticides have played a major role in increasing the output and
productivity of China’s farming sector. Their use, however, has created many negative
externalities. The use, overuse and misuse of pesticides in China have led to poisonings of
farmers and their families, degradation of rural land and water, and increased levels of
dangerous chemicals in China’s food (Huang et al., 2001d).
Almost $ 50 million is spent each year on chemical pesticides to control cotton
insect pests, a significant proportion of it being toxic organosulphur and organophosphorus
insecticides such as endosulfan and pyrethroid. The more environmentally friendly
synthetic pyrethrin insecticides have been effective in the past, but there are growing fears
that development of resistance by the insects may soon make pyrethroids ineffective. This,
together with the increasing public concern about the use of toxic chemicals and their
impact on the environment, has led to a flurry of interest in more environmentally
acceptable insecticides and the development of more insect-tolerant cotton varieties (Zhang
et al., 2000).
Both the active ingredients and the formulated pesticides are mainly produced by
Chinese companies. Foreign suppliers have been limited by Chinese regulations to
approximately 20% of the market. The pesticides are distributed to farmers by government
input supply organizations and the extension service. The government extension service
not only supplies the technology but also does scouting for pests and provides advice to
farmers about when to spray and what to spray. At present the Chinese pesticide market is
probably the largest in the world based on quantity used, and China competes with the
United States for the highest-value market (Hossain et al., 2004).
More pesticide is applied per hectare to cotton than to any other major field crop,
although the amount used is less than for most vegetable crops (Hossain et al., 2004).
Recognizing the negative externalities of excessive pesticide use, China’s
government has made an effort to regulate pesticide production, marketing and application
since the 1970s (Huang et al., 2002c). Initially, agricultural leaders banned the use of
chlorinated hydrocarbons such as DDT, endosulfan, and BHC in 1983 to eliminate their
impacts on the environment and their longer-term health risks. However, the government

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did not ban the use of some very dangerous organophosphate pesticides. Through the
extension system the government has tried to promote integrated pest management
practices with the goals of reducing pesticide use and using pesticides more effectively.
Nevertheless, pesticide use continues to grow rapidly (Hossain et al., 2004 and Huang et
al., 2001d).
After the government banned the use of chlorinated hydrocarbons in the early
1980s, organophosphates were the main type of pesticide used to control bollworm.
However, bollworms that were resistant to most organophosphates evolved and farmers
had to shift to a new type of pesticide called pyrethroids. These pesticides were effective
for a while against bollworm and had the added advantage of being relatively safe for the
farmers that applied them. However, by the mid 1990s bollworms had developed resistance
to the pyrethroids, too (Hossain et al., 2004).
The Ministry of Agriculture also began a campaign to teach farmers about the safe
use and management of pesticides. However, as experience has shown, the promulgation
of rules and regulations does not guarantee improvements in the quality of pesticide
products on the market or their proper and safe use. A vast majority of farmers have not
changed the way that they handle and apply pesticides in recent years. Moreover, despite
legal and regulatory bans, farmers in our sample still used highly hazardous pesticides in
2000 (Huang et al., 2001d and Huang et al., 2002c).
China’s leaders also invested in and promoted alternative ways to control pests,
many of which hold promise for reducing pollution. The research system greatly expanded
host-plant resistance technology in food and fiber crops in the 1970s and 1980s. Although
the record of IPM has been mixed, improvement of host-plant resistance in new varieties
has helped in reducing pesticide use without reducing crop yields (Huang et al., 2001d).
China's pest problems have led the nation's scientists to seek new pesticides, to
breed cotton varieties for resistance to pests, and to develop integrated pest management
programs to control the pests. Consequently, when the possibility of incorporating genes
for resistance to the pests came closer to reality, China's scientists started working on the
problem. With funding primarily from government research sources, a group of public
research institutes led by the Chinese Academy of Agricultural Sciences (CAAS)
developed Bacillus thuringiensis (Bt) cotton varieties using a modified Bt fusion gene
(Cry1ab and Cry 1Ac), representing an entirely new technique for controlling pests. The

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gene was transformed into major Chinese cotton varieties using China's own methods
(pollen-tube pathways). Researchers tested the varieties for their impact on the
environment and then released them for commercial use in 1997 (Pray et al., 2001; Huang
and Pray, 2002; Pray et al., 2002 and Huang et al., 2002d). Both the Chinese Academy of
Agricultural Sciences and a joint venture between Monsanto, Delta, and Pineland and the
Hebei Provincial Seed Company developed varieties of Bt cotton for farmers (Hossain et
al., 2004).
Farmers found that Bt cotton gave much better protection against bollworm than
chemical pesticides—it increased yields while reducing the costs of insect control, thereby
increasing the farmers’ net income. As a result, farmers have adopted it rapidly (Hossain et
al., 2004).

4.3 - Development of Bt Cotton in China
Bt cotton has been at the heart of China’s biotech program for some time. It is
advertised as one of the clearest achievements in promotional material for the 863 program
and in special glossy volumes documenting history, plans and achievements. The case for
insect-resistant cotton was made mostly strongly after the extremely severe 1992 bollworm
outbreak. This was a key opportunity for China’s biotechnology community. With yield
losses of 100,000 tons in the Yangtse cotton zone and 1.5m tons in the Yellow River area,
valued at 10 billion yuan (US $ 1.2 billion) for north China according to Jia and Peng
(2002) quoted in Keeley (2003a), Bt cotton clearly had much to offer. It became an
important priority, however, not only to learn from foreign corporations, but to develop the
technology at home and also commercialize it through a Chinese enterprise. In many ways
the Bt cotton story in China can be read as a nationalistic battle between Biocentury, the
Chinese company with Chinese technology, and Monsanto, the US multinational,
operating through joint-ventures with foreign technology.
In 1991 the Biotechnology Research Center of the China Academy of Agricultural
Sciences’ (CAAS) initiated a major research program to develop cotton varieties that
would contain a gene that would produce a Bacillus thuringiensis (Bt) toxin which would
control cotton bollworm. After 1-1.5 years of the project CAAS developed and patented a
new Bt gene. The gene was inserted into commercial cotton varieties using a process

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developed by Chinese scientists. The first successful genetically engineered cotton plant
was produced in China in 1993 (Pray et al., 2001).
In 1995 CAAS started testing these varieties in experimental fields regulated by the
Ministry of Agriculture. The first Bt varieties were given to farmers for commercial
planting on a small scale the next year (Pray et al., 2001).
By 1996 a total of 10 transgenic Bt cotton varieties had been developed and a total
of 17 field trials were conducted occupying 650 hectares (ISAAA, 2004).
In 1997 the Biosafety Committee of the Ministry of Agriculture the
commercialization of the first Bt cotton. The commercial plantings of the CAAS Bt cottons
feature a modified Bt fusion gene, Cry1Ab/Cry1Ac, planted in the four provinces of Anhui,
Shangdong, Shanxi, and Hubei. The cowpea trypsin gene, CpTi with a different
mechanism of resistance compared to Bt, has also been incorporated as a stacked gene with
Bt in some varieties.
The introduction of commercial cotton varieties producing CryIA insecticidal
proteins is expected to reduce environmental pollution from synthetic insecticides, increase
worker safety, and improve grower profitability. Thus, Chinese breeders and farmers have
more interest in the breeding and commercialization of transgenic Bt cotton.
Once the Bt gene was inserted into the elite Chinese developed cotton varieties,
scientists embarked on a series of tests to demonstrate the usability of the genetically
modified cotton. Researchers conducted initial experiments in the laboratory and then in
restricted access greenhouses. Lastly, they ran small and large scale field trials.
Two methods were selected for breeding Bt cotton in China. First, Bt genes were
directly inserted into elite Chinese cotton varieties by pollen pathway method or
Agrobacterium-mediated transformation method. This method was selected by about 8
institutes, and has bred some elite varieties or bred lines, such as Jingmian - GK-1 and GK-
12. The second method is cross breeding. Once transgenic Bt cotton plants were obtained,
scientists undertook a cross and back-cross program to introduce the Bt toxin genes into
genotypes of the current major Chinese varieties developed by Cotton Research Institute of
CAAS. This method has been selected by most of institutes and universities, and more than
10 varieties (such as CCRI 30, CCRI 31 and CCRI 32) or lines have been bred and are
being commercialized (Zhang et al., 2000).

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By 1999, the CAAS single gene Bt cottons, and the stacked Bt/CpTi cottons,
designed to provide more durable resistance, were planted in nine provinces compared
with four in 1998. It is estimated that at least 750,000 small farmers grew CAAS Bt cottons
in 1999, most of which carried the single Bt gene. The single Bt cottons were planted in
the nine provinces of Shangdong, Shanxi, Anhui, Jiangsu, Hubei, Henan, Hebei,
Xinagjiang, and Lianoning (see Figure 9 in annex). The CAAS cotton with stacked genes
was planted in the four provinces of Shangdong, Shanxi, Anhui, and Hubei in 1999 (see
Figure 9 in annex).
In 2002, CAAS has permission from the Biosafety Committee to sell 22 Bt cotton
varieties in all provinces of China (Pray et al., 2002 and ISAAA, 2004). Governmental
institutions have also developed new Bt cotton varieties by backcrossing the CAAS and
other Bt varieties with their own locally adapted germplasm and these are being distributed
and sold in many provinces (ISAAA, 2004). The Biosafety Committee has approved the
sale of five Delta and Pineland Bt varieties in four provinces (Hebei, Shandong, Henan and
Anhui – see Figure 9 in annex). Many other varieties from national institutes (such as the
Cotton Research Institute, Anyang) and from provincial institutes are being grown, but
some of these local varieties do not go through the official approval procedure set by the
Chinese Biosafety Committee (Pray et al., 2002).
Up to data, nine new varieties and at least 20 breed lines with the Bt gene have been
bred by Chinese scientists, and ten Bt cotton varieties CCRI 29, CCRI 30, CCRI 31, CCRI
32, CCRI 38, Jiza 66, Jimian 26, GK-1, GK-12 and NewCotton 33B were allowed to be
planted in China. One of these, NewCotton 33B directly came from Delta and Pine Land
Co, USA. The transgenic line, GK-321, carrying both insecticide genes Bt and CpTI in one
cotton plant, that has the fine characters of yield and fibre quality, was planted on 400
hectares in 1999. GK-321 was bred by the Biotechnology Center of CAAS and Jiangsu
Academy of Agricultural Sciences, and will be commercialized in 2000 (Zhang et al.,
2000).
Once the commercial release had been approved, a restricted area of 200 hectares
was planted in 1994. In 1997, the fourth year of commercial release, over 20,000 hectares
of Bt cotton were planted, and in 1998 about 100,000 hectares were planted in China. In
1999, about 350,000 hectares or 8% of the total cotton area was growing transgenic Bt
cotton. Of these, 20.330, 10.330, 6700, 4700 and 4700 hectares of Bt cotton were planted

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in Hebei, Shandong, Henan, Anhui and Shanxi Provinces (see Figure 9 in annex),
respectively, which are the major areas for transgenic cotton. Each year, the demand for Bt
cotton cottonseed greatly outstrips supply (Zhang et al., 2000).
The CAAS Bt cotton is being carefully monitored to develop the most effective
means for achieving durable resistance within the context of a Bt management strategy.
The Institute of Plant Protection has regularly sampled bollworms since 1997. Results
indicate that field performance of Bt cotton is superior to non-Bt cotton with no indication
that resistance to Bt is developing. The multiple cropping system and the spatial
distribution of Bt cotton planted on small farms in China surrounded by alternate host
crops contribute to a natural “refuge”. Jia (1998), quoted in ISAAA (2004), projects that
the current cotton may provide adequate levels of resistance for up to 8 or 9 years from
introduction in 1997, during which alternative strategies of control are being developed
and implemented. One of the current alternative strategies being employed is the use of the
Bt gene in conjunction with the CpTi gene, which encodes for an insecticidal protein with
an independent mode of action from Bt. This strategy is being employed to provide better
control and to delay resistance development.
Delta and Pineland (DLP) began formal research on cotton in China in 1995 in
partnership with the CAAS Cotton Research Institute in Henan Province. It tested a
number of different U.S. varieties and a number of different Bt genes. In November 1996
Monsanto, DPL and the Singapore Economic Development Authority developed a joint
venture with the Hebei provincial seed company to produce and market GE cotton seed
through a new company called Ji Dai. After testing a number of different varieties, they
decided that the American transgenic variety 33B controlled cotton bollworm, out-yielded
both GE and conventional varieties, and had good fiber quality. The Chinese biosafety
committee approved it for commercial use in Hebei province in 1997. Commercial seed
production started that year on 10,000 ha and Ji Dai built a state of the art seed production
facility in Shijiazhuang, Hebei in 1997 (Pray et al., 2001 and Zhang et al., 2000).
Commercial production of 33B started in 1998 in Hebei. In 1999, 33B production
was still allowed only in Hebei, but it was also being grown in neighboring provinces
through farmer to farmer seed distribution and through seed traders. In 1999, Monsanto-
DPL (MDP) had two new varieties of Bt cotton approved for Anhui Province (Pray et al.,
2001 and Zhang et al., 2000).

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4.3.1 - Chinese Academy of Agricultural Sciences (CAAS) Bt Cotton versus Monsanto Bt Cotton
There are two developers and suppliers of Bt cotton in China. The first is the public
sector Chinese Academy of Agricultural Sciences (CAAS) in collaboration with provincial
academies and seed distribution organizations, and the second is Monsanto/Delta Pine
Land from the international private sector (ISAAA, 2004).
At least one third of the Bt cotton in China is marketed by companies that were
formed by state research institutes. The most important of these is Biocentury which
markets the varieties with the gene constructs developed by the Biotechnology Research
Institute (BRI) in the Chinese Academy of Agricultural Sciences in Beijing. BRI is one of
the most prestigious National Key Laboratories based at the huge Chinese Academy of
Agricultural Sciences campus close to the high-tech Zhongguancun area in the north of
Beijing. It was founded in 1986 at the same time as 863. While Biocentury is notionally a
private company, it has clearly been fostered in its development at all stages by MOST and
MOA. BRI retain a major stakeholding, and several senior scientists from the institute who
played key roles in developing Bt cotton have important positions on the board. It could be
argued to be the developmental, or even the entrepreneurial, state in action (Keeley, 2003a).
The setting up of Biocentury in 1998 can in many ways be seen as a key
achievement of the 863 program started 12 years earlier, and particularly of the Bt cotton
program begun with 863 support in 1991. The company has moved quickly to establish a
significant market share, and is soon to be stock-market listed.
There has been explicit policy support for Biocentury, which echoes the experience
elsewhere of nurturing fledgling companies in strategic sectors. A key form of support,
alongside this type of endorsement, is funding. Biocentury was founded with start-up
investment of several tens of million RMB from Dongfang Mingzhu, a southern Chinese
holding company; this was matched by state investment from MOST through the 863
system, and some investment from the Biotechnology Research Institute who have a one-
third share in the company. In 2000 the company got important support from the Technical
Innovation Fund for Small and Medium Scientific And Technological Enterprises. Later
the same year the company secured State Development and Planning Commission support
for a project for commercialization of Bt and CPTI cotton (Keeley, 2003a).

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Total investment in 2003 was 100m RMB (US $ 12m). Profits at present are
divided between the key scientist, the state research institute and the larger company, as
follows: 13.5 per cent of gross sales go to the institute; there are also gene license fee
payments and variety payments; BRI are guaranteed an annual bottom line payment of half
a million RMB, regardless of company performance; and 80 per cent of the profits are
retained by the company. What is clear is that, whatever the profit sharing arrangements,
the link to the state and the sense of continuing to be fostered as a national corporation is
very strong. However, Biocentury is in other respects being encouraged to operate like a
private corporation. One aspect of this is the granting of property rights over important
technologies, another example of policy support for the company. The company has been
granted patents on gene construction modification, and on their novel plant vector
construction technique– the pollen tube pathway. Stock-market listing could also be
presented as another example of privatization (Keeley, 2003a).
The second supplier of Bt cotton in China is Monsanto/Delta PineLand whose
product is based on the variety 33B, which carries the Cry1A(c) gene.
The biotech multinational with the most significant presence in China is Monsanto:
they have the biggest public profile, and they are the only multinational actually selling
GM seed to Chinese farmers.
For cotton Monsanto first approached the Cotton Research Institute in Anyang,
Henan, and began a joint research program to look at cooperating to produce Bt cotton.
According to one informant in the company, Monsanto carried out 100 trials at CRI in
1995, but these talks in the end came to nothing. In 1996 it began a partnership with Hebei
Provincial Seed Company to produce seed in Hebei province. The result was a joint-
venture known as Jidai. The joint-venture was approved by the provincial governor which
led to accusations that Monsanto was operating in China ignoring the central Ministry of
Agriculture, even though at that time there were no restrictions on provinces forming joint-
ventures under US $ 30 m. Following this new regulations were issued in 1997 requiring
central permission for new joint-ventures. Monsanto and Delta and Pineland initially had a
66 per cent share of Jidai, this was also restricted to 49 per cent in the 1997 regulations.
According to the MOA this was because the Chinese partners were not seeing enough of
the benefits of the partnership. A director of Biocentury argued, however, that because of
Monsanto’s high technical fee and the fact they get the majority of this, they still get most

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of the profit from the joint-venture. The Chinese arguments around the technical fee
interestingly echo the international discourse against biotechnology that argues the central
problem is one of control and risk of dependence on expensive technologies (Keeley,
2003a).
Monsanto’s entry into the Chinese market has created great debate and controversy
among Chinese agricultural policy makers and scientists. Some of them argue that the
central government should protect the market by re-establishing monopoly seed production
and distribution, whereas others consider competition as helpful to the transformation of
CAAS in particular and economic development in general (Song, 1999).
Monsanto introduces the foundation seed including its Bt technology, but seed
production, processing and distribution are all operated locally by JiDai. Obviously, JiDai
as a partly government-owned seed company has access to the entire government seed
system, extension service, and marketing system. It uses county government seed
companies as its sales stations and employs the local government officials and extension
workers as salespersons. There are more than 5000 retailers in most of the cotton growing
counties in Hebei, comprising a complete marketing network. Contracts between Monsanto
and JiDai, and between JiDai and the salespersons, determine that the latter are obliged to
distribute Monsanto’s Bt cottonseed exclusively. Furthermore, since these retailers are
local officials, they are allowed to use government intervention measures in the
distribution of seeds to guarantee that farmers fulfil their quota (Song, 1999).
Jidai has gradually become the base for Monsanto’s operations across the north
China cotton zone, in the Yellow River watershed, concentrating on Shandong province in
addition to Hebei, and presumably for Henan province where Monsanto was finally
granted permission to sell after many failed attempts to get biosafety approval. Following
the success of Jidai a second joint-venture followed, based in Hefei in Anhui province,
together with Anhui Provincial Seed Company, again Monsanto own 49 per cent. This
joint-venture known as Andai at the moment only sells in Anhui, but it would be the base
for the wider Yangtse River cotton zone, were permission to be granted for Jiangsu and
Hubei provinces (Keeley, 2003a).
Breakdown of cotton sales is notoriously complicated. Monsanto, for example,
complain that they are presented as having sales in official statistics in provinces where
they are not formally even allowed to sell. In Hebei province – Monsanto’s biggest success

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story and a province where Bt cotton may be as much as 99 per cent – one Monsanto
manager put the breakdown for of the cotton grown as: 15 per cent Monsanto, 15 per cent
Biocentury, 30 per cent farmer saved seed, 30 per cent counterfeit, 10 per cent others. In
Shandong the share of the market is smaller. In Anhui it’s higher at 15 or 20 per cent. In
Henan the market is dominated by the Cotton Research Institute (Keeley, 2003a).
Despite the complexity, Biocentury has several advantages over Monsanto. One is
that links at the local level, particularly with research institutes, allow them access to well
adapted local germplasm, something Monsanto – formally at least – cannot get.
Biocentury has other things in its favour. One key factor is that Biocentury seed is
substantially cheaper than that of Jidai or Andai (the two joint-ventures Monsanto operates
through). In 2002 Biocentury were selling in Hebei at around 38 RMB per kg, whereas
Jidai seed was 45 RMB. According to the manager of Jidai profit margins between the two
companies are very different: ‘Our margins are not high. We have to keep up sales to reach
our balance point. Biocentury can be very profitable at sales of 100,000 kg; we need to hit
the one million mark.’ He went on: ‘Biocentury has no tech fee, or that’s a grey area. Our
technical fee is the major constraint on our profitability. We also spend more than
Biocentury on quality assurance. Our fixed costs are also high. We don’t understand their
fixed costs’ (Keeley, 2003a).
However, in Song’s (1999) view, Monsanto has advantage over Biocentury. CAAS
had difficulty selling its Bt cotton in 1998 because of the government seed companies,
which have regional monopolies on cotton seed sales and were not interested in
distributing it. In Hebei province, Monsanto successfully entered the market by gaining
access to local government systems and by using the government’s monopoly in seed
production and distribution. To achieve this goal, Monsanto could rely on its superior
financial resources, its marketing knowledge, and efficient management, which in the end
gave it a competitive edge over CAAS.
In sum, there are then several ways in which the Chinese state can be seen to
manage multinationals – by not allowing them to buy up Chinese seed companies in key
sectors, by restricting them to a joint-venture model, and by not allowing the foreign
partner to have a majority share. There are other ways in which MNCs can be seen to be
controlled; these include strategic use of biosafety regulations, limiting breeding programs,
and granting plant variety protection on a strategic basis.

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Regulation, and particularly risk assessment processes, have been one way that the
expansion of Monsanto in China has been contained; certainly company employees will
state this, though Chinese officials or researchers will not – unsurprisingly – acknowledge
it (Keeley, 2003a).

4.4 – Data and Surveys
Detailed and rigorous surveys have been conducted by an able team of Chinese and
US members to assess the impact of Bt cotton in China. Surveys were conducted in 1999
(Huang et al. 2002d, Pray et al. 2001), 2000 and 2001, and the five years of experience
(1997 to 2001) with Bt cotton in China (Pray et al. 2002).
Annual surveys conducted by Pray et al. (2002) are the only practical means of
generating an informative database to characterize adoption and assess the impact of Bt
cotton on production. The surveys were initiated in 1999 involving 283 farmers in Hebei
and Shandong provinces, expanded to include Henan Province in 2000, and further
expanded to include Anuhui and Jiangsu in 2001 (see Figure 9 in annex). In several of
these provinces cotton can suffer significant damage from bollworm and in provinces such
as Hebei and Shandong adoption rates for Bt cotton quickly soared to 97% and 80%
respectively in 2000, following their introduction in 1997 (see Figure 9 in annex) (ISAAA,
2004).
The counties where the survey was conducted were selected so that the researchers
could compare Monsanto's Bt cotton variety, CAAS Bt varieties, and conventional cotton.
Hebei had to be included because it is the only province in which Monsanto varieties have
been approved for commercial use. Within Hebei Province, Xinji County was chosen
because that is the only place where the newest CAAS genetically engineered variety is
grown. They chose the counties in Shandong Province because the CAAS Bt cotton variety
GK-12 and some non-Bt cotton varieties were grown there. After the counties had been
selected, villages were chosen randomly. Within the selected villages, farmers were
randomly selected from the villages' lists of farmers, and these farmers were interviewed
(Pray et al. 2002; Huang et al., 2002d and Huang and Pray, 2002).
In the second year they included Henan Province so that they could assess the
efficiency of Bt cotton by comparing it to the conventional cotton varieties that were still

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being grown there. Henan is in the same Yellow River cotton growing region as Hebei and
Shandong, and has similar agronomic and climatic characteristics. In 2001 they added
Anhui and Jiangsu provinces because Bt cotton had now spread further south. As in 1999,
counties were selected so that they would contain both Bt and non-Bt cotton producers. In
the second phase of sample selection, villages and farmers were selected randomly. In
2000 and 2001 they also continued to survey the same villages in Hebei and Shandong that
were surveyed in 1999. The total number of farmers interviewed increased to about 400 in
2000 and 366 in 2001 (Pray et al. 2002; Huang et al., 2002d and Huang and Pray, 2002).

4.4.1 - Impact on Yield
Data in Table 27 show that Bt cotton variety yields are higher than those of non-Bt
varieties (Pray et al., 2002 and Huang et al., 2002d).
Taking into account all farms in the survey in 2001, Bt varieties yielded about 10%
more than non-Bt varieties – 3,481 kg/hectare versus 3,138 kg/hectare, a difference of 343
kg/hectare in favor of Bt cotton. This difference is somewhat higher than the 8% yield
advantage reported for 1999. Yield advantage is also an important contributor to the
overall economic advantage of Bt cotton. Because Bt is omnipotent throughout the season,
and is more effective than sprays, Bt cotton provides superior control resulting in higher
yields, even compared to the most intensive of insecticide spray programs (ISAAA, 2004
and Pray et al., 2002).

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Table 27 – Yield of Bt and non-Bt cotton in provinces sampled, 1999-2001.
Number of plots Yield (Kg ha-1)
Location/type 1999 2000 2001 1999 2000 2001
Hebei
Bt 124 120 91 3197 3244 3510
Non-Bt 0 0 0 na na na
Shandong
Bt 213 238 114 3472 3191 3842
Non-Bt 45 0 0 3186 na na
Henan
Bt 136 116 2237 2811
Non-Bt 122 42 1901 2634
Anhui
Bt 130 3380
Non-Bt 105 3151
Jiangsu
Bt 91 4051
Non-Bt 29 3820
All samples
Bt 337 494 542 3371 2941 3481
Non-Bt 45 122 176 3186 1901 3138
Cotton production in Henan was seriously affected by flood in 2000, which lowered the yield.
Counties included in the surveys are: Xinji (1999-2001) and Shenzhou (1999-2000) of Hebei
province; Lingshan (1999-2001), Xiajin (1999-2000) and Lingxian (1999-2000) of Shandong
province; Taikang and Fugou of Henan province (2000-01); Dongzhi, Wangjiang and Susong of
Anhui province (2001); and Sheyang and Rudong of Jiangsu province (2001).
Source: Pray et al. (2002) and Huang et al. (2002d).

4.4.2 - Impact on Insecticide Use
Data in Table 28 indicate that in all three years, insecticide usage was reduced
substantially on Bt cotton compared with non-Bt varieties. The average saving in
formulated insecticide was 43.8 kg/ha equivalent to a 67% reduction in insecticides. At a
national level this translates to a reduction of 20,000 tons of formulated insecticide in 1999

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and 78,000 tons in 2001. Expressed in terms of reduction of the number of sprays at the
farm level in 1999, the number of insecticide sprays decreased from 20 sprays for non-Bt
to 7 sprays for Bt – equivalent to a two-thirds reduction, a saving of 13 sprays. In 2000 the
reduction in number of sprays were 12 (21 sprays reduced to 9), and 14 sprays (28 sprays
reduced to 14) in 2001 (ISAAA, 2004).

Table 28 – Insecticide Use on Bt and Non-Bt Cotton in China, 1991-2001. Kg/ha of
Formulated Product
1999 2000 2001 Average
Non-Bt 60.7 48.5 87.5 65.5
Bt 11.8 20.5 32.9 21.7
Non-Bt - Bt 48.9 28.0 54.6 43.8
Source: Pray et al. (2002).

In 2001, China used an estimated 16,000 tons of cotton insecticides (a.i) valued at
$285 million at the farm level, down by more than 10 %, compared with 2000, which
coincided with an almost 10% increase in Bt cotton adoption from 22% in 2000 to 31% in
2001. The cost savings, discussed later, associated with reduced volume of insecticides and
the labor savings from reduced number of sprays is substantial and is the major element
contributing to the overall substantial and is the major element contributing to the overall
economic advantage of Bt cotton in China (ISAAA, 2004).
When comparing pesticide use on Bt cotton to that of non-Bt cotton in Table 29,
data demonstrates that Bt cotton varieties exhibit reduced pesticide usage. For the
provinces that adopted Bt cotton first - Hebei and Shandong - Table 29 shows that
pesticide usage has remained low. In the provinces of Henan and Anhui, where Bt cotton
was recently introduced commercially, the mean application of pesticides has been
dramatically reduced when compared to non-Bt cotton. Only in Jiangsu, where red spider
mites are the main pest rather than bollworms, was the difference in pesticide use small
between Bt and non-Bt cotton - only 7 kilograms per hectare. This suggests that the spread
of Bt cotton may be reduced as it moves away from the regions in which bollworms have
historically been the major pest - Hebei and Shandong. As a consequence, the economic
benefits from producing Bt cotton are not as great, especially with higher Bt seed prices. In
Henan, bollworm problems are as important as in Hebei; however, farmers can only buy

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inferior varieties of Bt cotton. There is a virtual monopoly on seed production and sales by
the Provincial Seed Company supplying varieties from the local research institutes. In
addition, China’s Biosafety Committee has refused to allow the 33B or 90B varieties to be
grown in the Province. Thus, farmers have to grow illegal 33B and CAAS varieties
supplied by private seed traders or local Bt varieties that have not been approved by the
Biosafety Committee. Part of the problem for the Henan varieties is that the level of Bt
expression is reduced by midseason (Huang et al., 2002d and Pray et al., 2002).
When looking solely at pesticide use per hectare on Bt cotton, sample does show
some increase over time. In those provinces for which we have data for all three surveyed
years, results on pesticide use per hectare is mixed. In the Hebei province, for example,
pesticide usage increased between 1999 and 2001. In Shandong, however, after pesticide
use per hectare increased between 1999 and 2000, it decreased in 2001. Precise assessment
of impacts of Bt cotton on pesticide usage calls for a more methodologically oriented
estimation (Huang et al., 2002d and Pray et al., 2002).

Table 29 – Pesticide application (Kg/ha) on Bt and non-Bt cotton, 1999-2001.
Year Location Bt cotton Non-Bt cotton
1999 All samples 11.8 60.7
Hebei 5.7
Shandong 15.3 60.7
2000 All samples 20.5 48.5
Hebei 15.5
Shandong 24.5
Henan 18.0 48.5
2001 All samples 32.9 87.5
Hebei 19.6
Shandong 21.2
Henan 15.2 35.9
Anhui 62.6 119.0
Jiangsu 41.0 47.9
Source: Huang et al. (2002d) and Pray et al. (2002).

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4.4.3 - Health Benefits Associated with Bt Cotton

According to the survey data (Pray et al., 2002) the reduction in insecticide usage
on Bt cotton compared with non-Bt cotton, was associated with a decrease in the
percentage of farmers reporting that they had become sick from spraying insecticides. The
information in Table 30 shows that in 1999, 22% of farmers growing non-Bt cotton
reported ill-effects, compared with 5% for Bt cotton – a fourfold decrease in favor of Bt
cotton. Similarly, in 2000 there was a fourfold decrease from 29% poisonings for non-Bt
cotton to 7% for Bt cotton. The difference was much lower in 2001 with non-Bt farmers
reporting a 12% incidence of poisoning compared with 8% for Bt, 33% less poisonings for
Bt cotton farmers. For the three year period 1999 to 2001 there was a consistent and
significant decrease in the percentage of Bt cotton farmers suffering from pesticide
poisonings, compared with non-Bt cotton farmers. In China, insecticides are applied to
cotton with back-pack sprayers that are either hand or motor-powered. Given the
demanding field conditions, avoidance of exposure to insecticides is difficult and the
significant decrease in insecticide usage of 78,000 tons of formulated product in 2001 is a
major achievement, not only in terms of health, but also in terms of the environment.

Table 30 – Percentage of Bt and Non-Bt Cotton Farmers Suffering from Pesticide
Poisonings in China, 1999-2001.
1999 2000 2001
Non-Bt 22 29 12
Bt 5 7 8
Non-Bt - Bt 17 22 4
Source: Pray et al. (2002).

The linkages between Bt cotton adoption, reduction of pesticide use, and reduced
poisoning incidence are further strengthened by the evidence presented in Tables 31 and 32.
Table 31 categorizes the pesticides used by chemical type. The use of organophosphates
showed the greatest decline. A number of organophosphates are rated highly for acute
toxicity—category I in the Chinese and international systems, which rate pesticides from I
to IV according to acute toxicity. Table 32 shows the toxicity levels and the numbers of
users reporting poisonings for the insecticides that had caused the most poisonings during

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the preceding five years. Five of the top six pesticides, ranked by number of farmers
reporting poisonings, were organophosphates. Furthermore, the most popular pyrethroid
pesticide, cypremethrin, is a category II pesticide. It is not surprising, then, that a decline
the amount of organophosphates used would result in a reduction in poisonings (Hossain et
al., 2004).

Table 31 – Average Quantities (Kg/ha) of Framers’ Pesticides Use by Type of Pesticide,
2000.
Average Quantity (Kg/ha)
Bt varieties (n=377) Non-Bt varieties
(n=90) Decline in Use (%)
Organochlorines 1.6 3.9 58
Organophosphates 8.8 21.0 58
Amino-formicdacid esters 0.3 0.4 25
Pyrethroids 5.2 13.0 60
Organosulfates 2.8 6.0 53
Other insecticides 0.8 1.2 32
Fungicide 0.1 0.3 62
Herbicide 0.8 1.2 32
TOTAL 20.5 48.0 57
Source: Hossain et al. (2004)

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Table 32 – Type and Toxicity Levels of Pesticides Causing Farmer Poisonings, 1995-2000.
Category Toxicity Poisoning Cases
Organophosphates
Chlordimeform I 94
Parathion-methyl I 65
Acephate I 19
Carbofuran (furadan) I 9
Phorate I 9
Parathion III 8
Monocrotophos I 5
Pyrethroids
Cypermethrin II 12
Killingthrin 39 III 6
Source: Hossain et al. (2004)

4.4.4 - Economic Advantage of Bt cotton
The data (Table 33) indicate that the overall economic advantage of Bt cotton, compared with non-Bt cotton ranges from $357/hectare in 1999 to $550 in 2000, to $502 in 2001, with an average of $470/hectare. It is noteworthy that in all 3 years, farmers growing non-Bt cotton were actually making a loss when labor is costed, whilst Bt farmers were enjoying substantial profits. To put economic advantage into context, in 1999 cotton farmers with an average per capita income of $250/annum were generating additional income of approximately $350/hectare equivalent to additional income of $140 for the average 0.4 hectare planting of Bt cotton. Considering that Chinese cotton farmers are small resource-poor producers, the Chinese experience with Bt cotton supports the thesis in the 2001 UNDP Human Development Report, that technology can contribute to the alleviation of poverty. In terms of distribution of benefits, the data clearly show that in 1999, 80 to 85% of total benefits accrued to farmers with a small percentage (15% to 20%) to the developers of the technology.



Chapter III – China’s Agricultural Biotechnology Research Institutions and Administrative System
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Table 33 – Net Revenue (US$/ha) of Bt and Non-Bt Cotton Farmers in China, 1999-2001
(US$/ha).
1999 2000 2001 Average
Bt 351 367 277 332
Non-Bt -6 -183 -225 -138
Bt – Non-Bt 357 550 502 470
Source: Pray et al. (2002).

Taking all 3 years into account, savings on insecticides both in terms of lower cost
for the reduced amount of product used and the substantial labor savings from reducing the
number of sprays by one-half to two-thirds, is the major contributor to decreased
production costs. The increase in yield of Bt cotton leads to increased revenue, which is
offset by the higher price of Bt seed. For example, for 2001, labor savings, which are
probably largely related to reduced number of insecticide sprays, provided savings of
approximately $300, pesticide reduction approximately $100 savings, and increased yield
$100 for a net economic advantage of $500/hectare. The additional cost of the Bt seed was
approximately $60/hectare, whereas cost for fertilizer was higher for non-Bt cotton. Some
critics voiced concern that Bt cotton would increase the supply of cotton and would result
in losses rather than profits for Bt cotton farmers. Increased supply of cotton was
associated with a significant price decrease of approximately 30% between 2000 and 2001
(4.42-4.45 yuan/kg to 3.02-3.04 yuan/kg). Despite this decrease in price, Bt cotton farmers
still increased their income by approximately $500/hectare compared to non-Bt cotton
farmers (ISAAA, 2004).
At a national level, the economic benefits of Bt cotton in China in 2001, based on
adopted area of Bt cotton (Table 26) and net revenue/hectare (Table 33) was approximately
$140 million in 1999, $495 million in 2000, and $750 million in 2001 (Table 34). Of this
return of $1.4 billion over three years, about half, $700 million, can be attributed to the Bt
cotton developed by the Chinese public sector (CAAS) which has invested R&D
expenditures of the order of $100 million plus, annually on biotechnology for all crops,
including cotton. This represents an excellent level of return on R&D investments for the
Chinese Government and should provide the incentive to implement its intent to quadruple
its R&D budget in crop biotechnology to $450 million by 2005. Bt cotton has also been an
excellent investment for resource-poor small Bt cotton farmers in China who captured 80

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Agricultural Biotechnology in China: A National Goal 136
to 85% of the total benefits in 1999. This represents a very high level of return for
resource-poor small Bt cotton farmers who now suffer from less insecticide poisonings. It
also represents an excellent investment for China as a nation, and for consumers who
benefit from more affordable prices for cotton and a safer environment.

Table 34 – National Economic Benefits Associated with Bt Cotton in China.
Year Benefits ($ Millions)
1999 140
2000 495
2001 750
Total 1,385
Source: Compiled by Clive James, based on data from Pray et al. (2002).








Chapter IV Biosafety Management and Regulations in China



Chapter IV – Biosafety Management and Regulations in China
Agricultural Biotechnology in China: A National Goal 138
1 – Biosafety Management and Regulations in China
It is widely recognized that biotechnology is one of the most innovative
technologies developed in the 20th century with an even more promising future in the 21st
century. Biotechnology is currently a hot topic in both academic and political circles for its
implications on food security, economic growth and income distribution, human health, the
environment, and agricultural trade. Genetic modification techniques are at the center of
this focus and have spurred worldwide debate on biosafety issues. Many regard these new
techniques as a potential threat to human life, to existing plant and animal species, and to
the environment. These concerns have resulted in government regulations in some
countries that have tightened monitoring, supervision, and control of research and
commercialization of genetically modified (GM) varieties, especially GM foods.
In the late 1990s, six European Union (EU) member nations (Austria, France,
Germany, Greece, Italy, and Luxembourg) banned imports of transgenic corn and rapeseed
that were approved by the European Union. In late 1998, the EU imposed a five-year de
facto moratorium on approving new transgenic varieties, which effectively prohibits most
US corn exports to Europe. In May 2003, the United States, Argentina, and Canada filed a
World Trade Organization (WTO) dispute against the EU over its moratorium (Marchant
et al., 2002).
Japan also has strict regulations for biotech food imports. In 2000, Japanese
legislation was introduced to prevent imports of food products that contain transgenic
varieties not yet approved in Japan. Japan’s biotech testing focuses on transgenic products
approved for commercialization abroad but not yet approved in Japan (e.g., StarLink corn
is not approved for any use in Japan). In Japan, foods found containing unapproved
transgenic varieties must be reexported, destroyed, or diverted to nonfood use (Marchant et
al., 2002).
As in many other countries, Chinese policy-makers are concerned about
environmental and food safety, in response to the debate on the potential risks of GMOs
recently raised by the Chinese media. The debate in China has involved scientists,
government officials and newspaper reporters: responses and reactions vary among
stakeholders and change over time as more information becomes available on
biotechnology. A consensus seems to be growing in China that the most important task a

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scientist or biotechnologist can do is to reduce the potential negative effects and
demonstrate the safety of GMOs.
As a consequence of this consensus, research budgets allocated to biosafety
management and the study of biosafety have increased. Since 1999/2000, nearly all
biotechnology research programs have expanded their scope into biosafety issues
particularly for the following programs: “863”, “973” and the Special Foundation for
Transgenic Plants Research and Commercialization. A number of national institutes under
the Ministry of Agriculture, the Ministry of Public Health and the State Environmental
Protection Authority have launched various biosafety programs, including capacity
building for biosafety management and risk assessment, research studies on environmental
safety and food safety, detection technology for GMOs and GMO products, and
monitoring of international practices (Huang and Wang, 2003).
The development of more comprehensive and science-based safety assessment are
reasons for the recent adjustment of China’s GMO’s commercialization. Concern over the
impacts of GMO development on agricultural trade is another important factor. Issues such
as labelling of GM products and possible trade barriers resulting from biotechnology
concerns in countries that follow precautionary and preventive policies do have impacts on
the current (short run) pace of GMO commercialization in China as agricultural trade is an
important contributor to the aggregate Chinese economy and trade (Huang and Wang,
2003).
It appears that international trade concerns may have been one of the important
factors, but not the dominant factor, in recent agricultural biotechnology policy processes.
The critical event here appears to have been the EU’s decision to ban Chinese soy sauce
imports produced with GM soybeans imported from the United States. Additionally, the
recent decision by Thailand, the world’s leading rice exporter, to halt further development
of GM rice may also have been significant. It is unclear whether public attitudes towards
GMOs in Europe are now softening, or whether policies may soon change, hence, a “wait
and see” tactic in the short run in China is probable (Huang and Wang, 2003).
The hesitations and ambiguities around GMOs gravitate around the issue of
biosafety.
According to Gopo (2001), biosafety is the safe development of biotechnology
products and their safe application resulting from the existence of effective mechanisms for

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the safeguard of human and animal health, safe agricultural production, safe industrial
production, safeguard of the natural plant and animal species, (flora and fauna) and the
environment from negative consequences from the practice and applications of
biotechnology and its products. Biosafety then deals with the safe uses and applications of
GMO and their products for the safeguard from the negative consequences on human and
animal health and on the environment.
For Glover (2003), biosafety is understood to refer to the management of the risks
associated with the contained use and environmental release of GMOs. Therefore, the
concept of biosafety can be seen to be based implicitly on the concept of “risk”, and in
particular the assumption that the environmental and human health risks associated with
GMOs can be identified, evaluated and controlled by science.
For Levidow et al. (1996) quoted in Newell (2002), risk assessment is the process
by which the state defines the problems for which it accepts responsibility. Implied by it is
a social contract that specifies the terms under which state and society agree to accept the
costs, risks and benefits of a given technological choice, even if it is unclear how far
society is involved in making that choice.
In this sense, risk management and evaluation is both a means and an end of
regulation. It implies a process whereby choices can be made and justified about
acceptable risks associated with new technologies. It can both minimise side-effects from
the production process and overcome the legitimacy problems of an industrial process. The
choice of risk and the approach to assessing those risks are of course contested and
politicised, as they imply different degrees of regulation and oversight. For example,
existing regulation can appear to be adequate and competent for the task of managing risks
associated with biotechnology, because only those risks that can be accurately measured or
plausibly known are identified as relevant. Not only does a focus on particular risks imply
a level of technical competence, but the forms of expertise that are thought to be relevant
in formulating assessments help to determine who is in a position to participate in
regulatory choices.
Since risk assessment is central to any biosafety system, its principles and strategies
are a matter of much debate. The term “risk” is defined as the multiplicative product
between likelihood and magnitude of a specific unwanted effect. This definition implies
that risk can be identified and quantified mathematically. But risk also has a subjective

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dimension, because it relates to what we feel, accept or fear. Unfortunately, the concept of
risk is burdened with negative associations and can be easily instrumentalized. Even the
term “risk assessment” per se suggests that a risk exists and that the intention is to analyze
and assess its impact. Any debate on assessment procedures, therefore, requires an
agreement on what is perceived as a risk in principle. A few statements may outline the
direction (de Kathen, 2000):
• A priori, no scenario results in a zero-risk situation. The fact that we ignore a certain risk or that we are used to it does not change the likelihood or the magnitude
of the potential damage.
• Risk is commonly associated with “doing” or “modifying”, that is, something dynamic. In turn, “not doing” anything, that is, the static reference situation, is
often implicitly regarded as safe. This is an inappropriate assumption; risk
assessment needs to consider realistic alternative scenarios.
• In the public, the concept of risk is often confused with probability. For example, a horizontal gene transfer as such is not a risk. It occurs with a certain probability and
the mere fact that it occurs is an important scientific finding, describing a feature of
any genetic material (transgenic or not).
A very important point should be noted here: those who favored a strong
precautionary principle in the Cartagena Protocol did so in order to remove the decision-
process from an invisible scientific arena into a transparent public space. Yet the same
transparency should be applicable vice versa i.e., it should be crystal-clear on what basis
decisions are made. For instance, the factual moratorium – by the EU-council of Ministers
of Environment in June 1999 – on the commercialization of GMOs in Europe is not the
result of a negative risk assessment but politically motivated.
Limited resources also require priority setting. Biosafety assessment procedures
have not been applied to non-GMOs, but such organisms may pose risks to the
environment and human health, too. In fact, many of the risks of non-GMOs are identified,
and the potential harm is almost quantified, but there is no feedback mechanism. It would
be wrong to hypothesize that there is no risk associated with GMOs.
In 1992, the Convention on Biological Diversity (CBD) took place with the main
objectives of working for the conservation of biological diversity, the sustainable use of its
components and the fair and equitable sharing of the benefits arising out of the utilization

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of genetic resources. When developing the Convention, the negotiators recognized that
biotechnology can make a contribution towards achieving the objectives of the Convention,
if developed and used with adequate safety measures for the environment and human
health. The Contracting Parties agreed to consider the need to develop appropriate
procedures to address the safe transfer, handling and use of any LMO resulting from
biotechnology that may have adverse effect on the conservation and sustainable use of
biological diversity. The Biosafety Protocol is the result of that process.
The full name of the Biosafety Protocol is "the Cartagena Protocol on Biosafety to
the Convention on Biological Diversity." Cartagena is the name of the city in Colombia
where the Biosafety Protocol was originally scheduled to be concluded and adopted in
February 1999. However, due to a number of outstanding issues, the Protocol was finalized
and adopted a year later on 29th January 2000 in Montreal, Canada.
Biosafety is a term used to describe efforts to reduce and eliminate the potential
risks resulting from biotechnology and its products. For the purposes of the Biosafety
Protocol, this is based on the precautionary approach, whereby the lack of full scientific
certainty should not be used as an excuse to postpone action when there is a threat of
serious or irreversible damage. While developed countries that are at the center of the
global biotechnology industry have established domestic biosafety regimes, many
developing countries are only now starting to establish their own national systems. The
term “biosafety” has thus been coined to describe the regulation, elimination, or control of
the risks associated with the use and release of such organisms.
A special, but not infrequent situation arises, however, when lack of scientific
certainty or consensus prevails. It is for such circumstances that the legal concept of
precaution has been developed in the 1970s. It has subsequently increasingly been
reflected in international treaties, as well as national law, and has become known as the
precautionary principle (Mackenzie et al., 2003).
Its most commonly referred to formulation is that contained in Principle 15 of the
Rio Declaration, adopted by States at the UN Conference on Environment and
Development in 1992 – the single most important non-binding international instrument
adopted by States after the Stockholm Declaration of 1972 (Mackenzie et al., 2003).
In short, the precautionary principle holds that uncertainty regarding serious
potential environmental harm is not a valid ground for refraining from preventive measures.

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In this sense, the principle’s chief characteristic is to operate as enabling action, and
authorizing preventive measures, in circumstances of scientific uncertainty (Mackenzie et
al., 2003).
Whether and to what extent there is scientific uncertainty is therefore critical in the
context of precautionary action. There is no internationally agreed definition of “scientific
uncertainty”, nor are there internationally agreed general rules or guidelines to determine
its occurrence. Those matters are thus dealt with – sometimes differently – in each
international instrument incorporating precautionary measures (Mackenzie et al., 2003).

2 - The Cartagena Protocol on Biosafety
The Protocol’s general coverage includes the transboundary movement, transit,
handling and use of all GMOs (referred to as “living modified organisms” (LMOs) in the
Protocol) that may have adverse effects on the conservation and sustainable use of
biological diversity, taking into account also risks to human health\ (Mackenzie et al.,
2003). The central procedural mechanism set out in the Protocol to regulate transboundary
movement of living modified organisms is advance informed agreement (AIA). Risk
assessment is the central component of the AIA procedure. The AIA procedure essentially
requires that before the first transboundary movement of a GMO subject to the AIA
procedure, the Party of import is notified of the proposed transboundary movement and is
given an opportunity to decide, within 270 days, whether or not the import shall be allowed
and upon what conditions. This decision must be based upon a risk assessment, carried out
in a scientifically sound manner, in accordance with Annex III of the Protocol and taking
into account recognised risk assessment techniques (La Vina, 2003 and Cosbey and
Burgiel, 2000). The purpose of this procedure is to ensure that importing countries have
both the opportunity and the capacity to assess risks that may be associated with the LMOs
before agreeing to its import.
For the agricultural and other products within its domain, the Protocol divides
LMOs into three classes: (1) those intended for release into the environment; (2) those for
food, feed, and processing; and (3) those in transit and for contained use.
As discussed above, the Protocol promotes biosafety by establishing rules and
procedures for the safe transfer, handling, and use of LMOs, with specific focus on

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transboundary movements of LMOs. It features a set of procedures including one for
LMOs that are to be intentionally introduced into the environment (AIA procedure), and
one for LMOs that are intended to be used directly as food or feed or for processing
(LMOs-FFP).
LMOs intended for direct use as food or feed, or processing (LMOs-FFP) represent
a large category of agricultural commodities. The Protocol, instead of using the AIA
procedure, establishes a more simplified procedure for the transboundary movement of
LMOs-FFP. Under this procedure, A Party must inform other Parties through the Biosafety
Clearing-House, within 15 days, of its decision regarding domestic use of LMOs that may
be subject to transboundary movement (CBD, no year).
The Protocol established a Biosafety Clearing-House (BCH) as part of the clearing-house
mechanism of the Convention, in order to facilitate the exchange of scientific, technical,
environmental and legal information on, and experience with, living modified organisms;
and to assist Parties to implement the Protocol (CBD, no year).
In order to reinforce the information sharing on biosafety and implement the
obligation for the establishment of biosafety information clearing-house under, SEPA has
organized the experts to develop “the web site of biosafety information in China”. The
system design for the web site and the application for domain name have been completed
and submitted to SEPA for review. The information contents in the web site include: “The
Cartagena Protocol on Biosafety”, the national focal points, the competent national
authority, the policies and regulations on biosafety, the technical guidelines for biosafety,
the databases of contained use, field trial and commercialization of GMOs, the database of
transboundary LMOs, the list of biosafety experts, the biosafety news, and other biosafety
web sites (Wang et al., no year).
The major players in the negotiations included five negotiating groups, they include
the Miami Group, the Like-Minded Group, the European Union, the Compromised Group
and the Central and Eastern European bloc of Countries (CEE).
At the end of the spectrum, the Miami Group represents the major agricultural
exporting countries, Australia, Argentina, Canada, Chile, Uruguay, and the U.S., which
have a particularly high stake in the free flow of agricultural commodities, argued that the
Protocol should protect free trade in products of modern biotechnology (Smith, 2000).

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The group’s positions included limiting the scope of the Protocol by excluding
commodities from the Cartagena Protocol’s stringent requirements for LMOs intended to
be released into the environment. One of the Miami Group’s goals was to allow
commodities intended for food, feed, and processing to operate under a simplified
procedure, so that they would be subject to expedited import approvals. They also wanted
LMOs in transit and those destined for contained use to be excluded from the scope of the
agreement, since those products do not have an adverse effect on the environment. The
exclusion of human pharmaceuticals produced through biotechnology was also an issue
(Smith, 2000).
Another critical issue for the Miami Group was the preservation of countries’ rights
and obligations under other international agreements, especially the World Trade
Organization’s (WTO) agreements, already signed by most parties to the Protocol
negotiations. As major agricultural exporters, Miami Group countries fought for a “savings
clause” in the pact to clarify that the Protocol would not take precedence over other
existing trade agreements. (In international agreements, a “savings clause” is an explicit
statement that the rights and obligations of countries under existing international
agreements are protected) (Smith, 2000).
The Like-Minded Group emerged from the G-77/China (a developing country
negotiating coalition) to distinguish itself from the three developing countries in the Miami
Group. The largest negotiating group (measured by the number of countries, population
and biodiversity), the Like-Minded Group included countries ranging from those with no
domestic regulatory structures, legislation or biotechnology industries to those with fairly
developed systems (Cosbey and Burgiel, 2000). China interacts closely with the “like-
minded” group of which she is a part. Although China has differences of opinion with the
group, on issues around the conditions in which it is acceptable to block the trade in GMOs
for example, it continues to align itself most closely with this grouping across a spectrum
of substantive issues. Indeed, Cai Lijie from SEPA, (State Environmental Protection
Administration) was head of the Chinese delegation and spokesperson for the Like-Minded
Group at different points in the international negotiations. He is credited with maintaining
a firm stance on issues such as the relationship between the Protocol and the WTO and the
importance of adopting the precautionary principle in the agreement in the face of intense
pressure from the Miami group (Newell, 2003).

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Agricultural Biotechnology in China: A National Goal 146
China is a signatory to the Cartagena Protocol on Biosafety, even though China has
not yet ratified the agreement. China’s ratification has been slowed by a tussle between
SEPA and the Ministry of Agriculture over the extent of their mandates and
responsibilities for overseeing the different elements of the Protocol. While SEPA is
pushing for early ratification of the Protocol, MOA is seeking overall control over the
implementation of the agreement as a condition for accepting early ratification. Ultimately,
however, the final decision on ratification of the agreement will be made by the State
Council, which sits above the other agencies involved in policy (Newell, 2003).
They took positions almost diametrically opposed to the Miami Group. They
supported a strong Protocol, in light of the unknown effects of LMOs on the environment
and human health, and given the need to protect countries without adequate regulatory or
institutional capacity to effectively handle LMO imports.
The Like-Minded Group called for a comprehensive scope, including LMO–FFPs (LMO
intended for direct use as food or feed or for processing), arguing that seeds and other
LMO products intended for consumption might actually be planted in many developing
countries. They also argued for comprehensive identification and documentation
requirements on LMO imports. The Like-Minded Group supported a strong statement of
the precautionary principle, and was the prime backer of tough and concrete text on
liability and redress.
The EU bloc took many positions in opposition to the Miami Group. It was no
surprise, given the strong anti-biotechnology campaigns waged in the EU, that this bloc
supported a much more restrictive Protocol. Still in the throes of U.K.-led hysteria about
bioengineered food, EU policy makers have reacted by restricting this technology, and
would like to see the same approaches adopted on the international level. Thus, in the
Protocol negotiations, the EU bloc supported a stringent Protocol based on the
precautionary principle, whose scope would cover commodities (Smith, 2000).
On scope, the EU had pushed for inclusion of LMO-FFPs (LMO intended for direct
use as food or feed or for processing), while acknowledging that they might merit special
treatment under the AIA procedure. They also supported alternative considerations for
contained use, transit and pharmaceuticals for humans. On these issues their position
generally fell somewhere between those of the Miami Group and the Like-Minded Group.
The EU also supported visible identification and documentation for LMOs, given the EU

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desire to identify GM products through labelling. The EU objected to the inclusion of a
savings clause, arguing that it would threaten decisions to deny LMO imports on
environmental grounds. The EU instead supported the inclusion of a non-discrimination
provision, stating that countries would not discriminate among domestically produced
LMOs and those being imported (Cosbey and Burgiel, 2000).
A Compromise Group also emerged at Cartagena (consisting of Japan, Mexico,
Norway, Singapore, South Korea, Switzerland, and in the final stages New Zealand). Its
objective was to be to bridge gaps between the other negotiating blocs by elaborating
compromise stances. In this respect, the role of the Compromise Group was to prove
critical in the final discussions in Montreal. (Newell and Mackenzie, 2000).
The Group did have joint positions supporting a comprehensive scope and the
precautionary principle, although they acknowledged internal difference about the savings
clause. The group’s inclusion of countries with high levels of biodiversity as well as those
with advanced biotech industries provided additional cache for addressing the range of
concerns of developed and developing countries (Cosbey and Burgiel, 2000).
The fifth negotiating bloc was formed of the countries of Central and Eastern
Europe. These five groups were flanked by the Biotechnology Industry Organisation on the
one hand, representing agricultural, food and pharmaceutical companies promoting the
goals of the Miami group on trade, and an international coalition of consumer and green
groups on the other, supporting the Like- Minded Group and maintaining pressure on the
EU (Newell and Mackenzie, 2000).
The Miami Group insisted that risk assessments and decision-making on imports of
LMOs should be based on “sound science” and should conform to WTO requirements.
These include those under the Agreement on Sanitary and Phytosanitary Measures which
require that measures which restrict trade on sanitary or phytosanitary grounds must be
based on risk assessment and sufficient scientific evidence. In addition, the Miami Group
insisted that the precautionary principle need not be expressly written into the operative
provisions of the Protocol, since, as no actual threats to biodiversity or human health from
LMOs had been proved, the Protocol was in itself a precautionary instrument. By contrast,
while agreeing to the need for risk assessment, the Like-Minded Group and the EU argued
that it was precisely the lack of scientific certainty and consensus around possible impacts
of LMOs which necessitated the inclusion of the precautionary principle in the operative

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provisions of the Protocol on AIA. In addition, the fact that a particular LMO may have
different effects in different ecosystems had to be taken into account (Newell and
Mackenzie, 2000).

3 - National Biosafety Framework of China
As a result of the debate outlined above, there have been increasing policy
discussions on how to regulate the application of genetic modification techniques at the
national level and a number of national regulatory frameworks have been established. As
activities involving the technology expanded, and in particular as actual and potential
commercial use increased, the scope of national regulations tended to expand. Designing
frameworks for GMO regulations has not been easy, as the main challenge was perceived
to be establishing an appropriate balance between potentially important technological
benefits and appropriate environmental and human health safeguards. But as the debate
evolved, the role of law as a “provider” of biosafety, i.e. as the provider of mechanisms to
ensure the safe handling, transfer and use of genetically modified organisms, increasingly
came to the fore (Mackenzie et al., 2003).
The challenges of biosafety, in particular in the context of the transboundary
movement of GMOs, made an international regime a prerequisite for an efficient
regulatory system: biosafety cannot be achieved without a coordinated approach between
countries. This is why the Protocol has been negotiated.
A National Biosafety Framework (NBF) is a combination of policy, legal,
administrative and technical instruments that is developed to address safety for the
environment and human health in the context of developing and applying modern
biotechnology. These frameworks often focus on GMOs. Although National Biosafety
Frameworks vary from country to country, they often contain a number of common
components, such as; a policy on biosafety, which is often part of a broader national policy
on biotechnology; a regulatory regime for biosafety, which usually consists of a law or act
in combination with implementing regulations; a system to handle notifications or requests
for authorisations for certain activities, such as field test releases of GMOs in the
environment. The system typically provides for administrative handling, risk assessment,
decision making and public participation; systems for monitoring and enforcement;

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systems for public awareness and participation, i.e. a system to inform stakeholders about
and involve them in the development and implementation of the national biosafety
framework (UNEP-GEF, no year).
To implement the relevant obligations of Convention on Biological Diversity and
help developing countries strengthen their capacity building for biosafety management,
United Nations Environment Program (UNEP) has selected in 1997 18 countries in the
world for pilot projects for formulating their national biosafety framework by using the
funds from Global Environment Facility (GEF) (the UNEP-GEF Biosafety Pilot enabling
Activity). China was one of the 18 countries selected for this pilot project. The project was
led by the State Environmental Protection Administration (SEPA) of China and
implemented by 8 relevant government departments. The project was initiated at the end of
1997. The final version of the National Biosafety Framework of China (NBFC) was
produced in the middle of October 1999. The NBFC brought forward the frameworks of
policies and regulations for national biosafety management, established the framework of
technical guidelines for risk assessment and management of LMOs and specified the
priority demands and actions for capacity building of national biosafety management
(UNEP-GEF, no year).
The NBFC was formulated before the adoption of the Cartagena Protocol on
Biosafety. The policies brought forward in the NBFC were general outlines but not specific
strategies ready for implementation. China has been a member of WTO and the Protocol
came into force on 11 September 2003 (UNEP-GEF, no year).
Given these developments, it was necessary to modify some contents of the policy
framework in the NBFC, to evaluate the biotechnology development status in China based
on the requirements of the Protocol and needs of national biosafety management, to
analyze the influence of the Protocol on biotechnological industry and the environment in
China, to analyze the influence of the articles of WTO on the trade of LMOs and the
management of biosafety, to further put forward the strategy on implementation of the
Protocol and the measures to strengthen the management of environmental release and
transboundary movement of LMOs. The above mentioned measures not only will be very
significant for the protection of biodiversity, human health and environment, but also
necessary for China to better implement the Protocol and offer reference to biosafety
management in the world (UNEP-GEF, no year).

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The People's Republic of China is a strategically important country in the field of
genetically modified organisms, since research and application have both progressed fairly
far. The demands on China in terms of assessing the risks in dealing with genetically
modified organisms are particularly onerous, since China is one of the countries with the
greatest biodiversity in the world, and is the centre of origin of many important genetic
resources. Legislation on biosafety, taking into account the standards of the Cartagena
Protocol on Biosafety and the pertinent EU regulations were not introduced until 2001,
however. Illegal release of such plants is common, and GMO activities are far from
transparent. In this sense, the Chinese Government has signed the Cartagena Protocol and
is preparing to ratify it. In line with this protocol, relevant legislation and policies were and
must be developed at national level (GTZ, no year).
In 2002, UNEP and GEF approved the implementation of the framework and
contributed some 1 million US dollars to the project, which targets the improvement of
China's legal system on biosafety and its capacity of risk assessment on GMOs among
others. Over the past year, the project has achieved substantial results, including the
completion of a report on the current status of research on transgenic plants and animals
and risk assessment, said Xue Dayuan, chief of the project's expert group.
According to the NBFC, the Chinese government has set some theoretical
principles in biosafety, which include, for example (Huang et al., 2001a):
Equal attention should be paid to both biotechnology R&D and to safety
management. The government actively supports and encourages biotechnology R&D
through preferential policy measures, at the same time it pays great attention to biosafety
issues. Promotion of biotechnology and its related industries must guarantee human health
and environmental safety;
Safety issues are another priority. Based on the particular biotechnology product,
negative ecological and environmental effects and potential dangers to human health in the
period of experimental research, field trials, environmental release, commercialization and
processing, storage, utilization and waste treatment etc should be prevented. Therefore,
prevention is fundamental;
There also should be cooperative management between related ministries.
Biotechnology products are associated with many fields, such as agriculture, forestry,
pharmaceuticals and health, and food processing etc. Biosafety management involves not

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only human health and ecological and environmental protection, but also export and import
management and international trade activities. Therefore, the cooperation among related
ministries and agencies is necessary;
Management should be based on fair and scientific principles. Biosafety assessment
must be based on science, the related manipulation techniques, monitoring processes,
monitoring methods and results must be up to scientific standards. According to
regulations, all released biotechnology products should be monitored regularly and
corresponding safety measures should be adopted regarding monitoring data and results. A
system of national biosafety assessment standards and monitoring of technology should be
established;
Consumers also have the right to know the facts about the products of
biotechnology. The public should be aware of similarities and differences between
biotechnological and traditional products. The consumers have choice as to whether to use
new genetically modified products or not;
Assessment should be on a case by case basis. Genetic information exchange
during processes of genetic manipulation is complex, so specific analysis and assessment
must be taken for every particular product. Based on requited information, appropriate
safety measures should be taken according to the progress of genetic engineering. On the
other hand, these scientific measures will be gradually improved and perfected with the
development of technology, accumulation of experience, public opinion and acceptance.

4 - Consumer Acceptance of Biotechnology
The GM food safety debate seems to have been initiated by the commercialization
of GM crops and has since become more heated. This debate has important implications
for the development of this new technology, which is viewed as a major approach in the
fight against global hunger. Also, it is widely recognized that consumer acceptance will
ultimately determine whether GM foods can survive and expand in the marketplace, and
will conclude this debate to some extent, at least with regard to policymaking.
A survey conducted by Chern and Rickertsen (2002), quoted in Zhong et al. (2002),
of consumer acceptance of GM foods in Japan, Norway, Taiwan, and the United States
showed wide differences in consumer acceptance across countries. For example, although

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Norwegian consumers seemed better informed about GM issues, and a higher percentage
of them viewed GM foods as - very safe - Norwegian consumers tended to accept GM
foods much less than US consumers. In Japan and Taiwan there was also a large difference
in consumers’ willingness to pay for GM foods. Although Japanese consumers were most
the skeptical in this survey, Taiwanese consumers seemed to have similar attitudes as those
in the United States. These survey results may imply that consumer attitudes are strongly
influenced by cultural and institutional factors.
Focusing on Asia, consumer surveys conducted in China, Indonesia, and the
Philippines suggest that most Asian consumers have a positive attitude toward GM foods
(Asian Food Information Center, 2002, 2003 quoted in Zhong et al., 2002). Results
indicated that about two thirds of consumers not only accepted GM foods but also believed
that they would personally benefit from consuming GM foods. This finding is consistent
with previous observations in Taiwan. However, this survey does not reveal Asian
consumers’ knowledge of GM foods.
An additional survey conducted by Xuan and Zhou (2002), quoted in Zhong et al.
(2002), in China sought to identify consumers’ awareness of GM foods. Results from
questionnaires showed that only about 5% of Chinese consumers think that they know the
issues concerning GM foods well, while 63% know - a little - and the rest (32%) know
nothing. Additional, survey results indicated that about half of consumers did not know
whether GM foods are safe for humans or the environment; 37% and 29% respectively
believed they are harmful to human health and the environment in the long run. These
findings are very negative. The authors suggested that the results be considered with
caution, because the survey was conducted through the mail among individuals known to
the investigators.
Acceptance of biotechnology by Chinese consumers carries with it enormous
potential benefit to firms wishing to market biotechnology products. Consumer attitudes
are heavily influenced by the government due to its control over the news media. A 1999
Environics International survey of consumers in 10 countries found that China had the
highest consumer acceptance of biotechnology products of all the countries surveyed
including the US, Canada, Japan, Russia, India, and four European countries. In a survey
of 600 Asian consumers, including 200 Chinese citizens, 66 percent believed they would
personally benefit from food biotechnology during the next five years, 55 percent believed

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they had eaten biotechnology foods recently and of those that had, 96 percent were
satisfied with biotechnology products being available in their market and took no action to
avoid them. When asked to spontaneously list advantages and disadvantages of
biotechnology, five times more advantages were given than disadvantages. This survey
also found that only 23 percent of respondents would prefer more information being
included on food labels but when asked what information they would like to see, not one
respondent mentioned genetically modified ingredients. In general, concerns over possible
negative side effects were expressed in a desire for more information and demonstrated a
balanced and open-minded approach (Asian Food Information Centre, 2003 quoted in
Loppacher and Kerr, 2004). Of course, these are very small samples of the Chinese
population and caution must be exercised in generalising the results.
Some exceptions to this positive view of biotechnology, however, appear to be
emerging. Discussion of GM crops is increasing in the media. In January of 2000 the
China Consumer Association issued a statement calling for labelling of genetically
modified food products. The government has also begun to regulate the market. While the
effects of this new legislation is not yet clear, it is apparent that China is stepping back
somewhat from its unfaltering support for biotechnology (Canadian Trade Commissioner
Service 2002). Due to the state control of the media, if the government position on
biotechnology changes, consumer attitudes will almost surely change as well, producing a
far less predicable commercial environment for biotechnology products (Loppacher and
Kerr, 2004).

5 - Institutional Setting
In general, biosafety management in China is implemented at 3 levels: national,
ministries and research institutes. The Ministry of Science and Technology (MOST)
represents the national level and is responsible for the general management of biosafety.
Recently, a new division for biosafety management has been set up within the National
Center of Biological Engineering Development (see Figure 10 in annex). It is responsible
for the administration of new regulations, for promoting academic exchange on biosafety,
and coordinating different ministries involved with biosafety issues.

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At the ministry level, the Ministry of Agriculture (MOA) is in charge of the
formulation and implementation of biosafety regulations for agricultural biotechnology.
Within the MOA, the Office of Agricultural Genetic Engineering Safety Administration
(OAGESA) under the Department of Science and Education is responsible for the
implementation of regulations (see Figure 10 in annex). The Biosafety Committee on
Agricultural Biological Engineering (BCABE) composed of officials from MOA and
scientists from different disciplines including agronomy, biotechnology, plant protection,
animal science, microbiology, environmental protection and toxicology, nominated by the
MOA, is responsible for the biosafety assessment of experimental research, field trials,
environmental release and commercialization of GMOs. The Ministry of Public Health is
responsible for the food safety management of biotechnology products. The Appraisal
Committee consisting of food health, nutrition and toxicology experts, nominated by MPH,
is responsible for reviewing and assessing GM food since it has been designated as a New
Resource Food. The State Environmental Protection Agency and MOA assume
responsibility for environmental safety.
While the Ministry of Science and Technology is mainly responsible for
biotechnology research, the Ministry of Agriculture is the primary institution in charge of
the formulation and implementation of biosafety regulations on agricultural biotechnology
applications and their commercialization, particularly after 2000 (Huang and Wang, 2003).
The MOA is not however the only ministry with responsibility for biosafety. Since
April 2002 there has been a coordinating body under the State Council bringing together
seven different ministries with biosafety responsibility. However, building joined-up
government is difficult, and some argue this Allied Ministerial Meeting has “no strong
power to manage since it is bringing so many together, like the UN” (Keeley, 2003a).
In order to incorporate representation of stakeholders from different ministries, the
State Council established an Allied Ministerial Meeting comprised of leaders from the
MOA, the SDPC, the MOST, the Ministry of Public Health, the Ministry of Foreign
Economy and Trade (MOFET), the Inspection and Quarantine Agency and the State
Environmental Protection Authority (SEPA). This Allied Ministerial Meeting coordinates
key issues related to biosafety of agricultural GMOs, examines and approves the
applications for GMO commercialization, determines the list of GMOs for labelling and
import or export policies for agricultural GMOs.

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However, routine work and daily operations are handled by the Office of
Agricultural Genetic Engineering Biosafety Administration (OGEBA). The National
Agricultural GMO Biosafety Committee (BC) is the major player in the process of
biosafety management. Currently, the Committee is comprised of 56 members. They meet
twice each year to evaluate all biosafety assessment applications related to experimental
research, field trials, environmental release and commercialization of agricultural GMOs.
They provide approval or disapproval of recommendations to OGEBA based on the results
of their biosafety assessments. OGEBA is responsible for the final approval of decisions.
The other unique aspect is that China’s National Agricultural GMO Biosafety
Committee plays a critical role in the biosafety decision-making process. As most of its 56
current members (29 for GM plants, 9 for recombined microorganisms for plant, 12 for
transgenic animals and recombined microorganisms for animals, and 6 for GM aquatic
organisms) are experts from various research institutes within the public sector. Their
GMO biosafety assessment provides key information for decision makers on whether
OGEBA should approve or disapprove GMO application cases. However, the weakness of
this approach is the time constraint from BC members who often are leading scientists in
various disciplines. There has been concern about the problem of heavy burdens on a few
key individual scientists and also that there are too many biotechnologists on the Biosafety
Committee (Huang and Wang, 2003).
Clear differences exist between China’s technical biosafety committee and the
corresponding biosafety review committees in Kenya, Brazil, and India. China’s CS is the
only one of this group that rests entirely within a ministry of agriculture rather than a
ministry of science and technology (as in Kenya and Brazil) or chaired by an environment
ministry (as with GEAC in India). The CS has consequently been less prone to paralysis
over issues of scientific uncertainty in the biosafety area. Through 1999 the CS gave 26
separate commercial production approvals for GM crops, including multiple varieties of
cotton, green pepper, tomato, petunia, and rice (Paarlberg, 2000).
The Ministry of Public Health (MPH) is responsible for food safety management of
biotechnology products. The Appraisal Committee consisting of food health, nutrition and
toxicology experts, nominated by MPH, is responsible for reviewing and assessing GM
foods as they have been designated a Novel Food. The State Environmental Protection
Authority (SEPA) participates in GMO biosafety management through the Allied

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Ministerial Meeting and through their members on the National Agricultural GMO
Biosafety Committee. While SEPA has taken the responsibility of international Biosafety
Protocol and most of international activities, particular the activities implemented by
UNEP, SEPA’s focus on biotechnology in China is limited to biodiversity.
Comparing China to the US and the EU, China has several unique elements with
regard to the institutional setting of agricultural GMO biosafety management. The Ministry
of Agriculture in China appears to have more power than its counterparts in the US and the
European Union. The leaders in the State Council of the previous government believe that
the MOA is more familiar with, and has more expertise in agriculture and agricultural
GMOs than any other ministry. Moreover, because MOA in China is also in charge of
pesticide use and its environmental assessment in agricultural production, the national
leaders such consider MOA as a major player in China’s agricultural biosafety
management (Huang and Wang, 2003).
The State Environmental Protection Administration (SEPA) is the only part of the
Chinese government not satisfied with current GM crop biosafety policies (Paarlberg,
2000). SEPA argue that this institutional setting might result in less attention being paid to
the environmental risks of GMOs, or even involve a potential conflict of interests as the
MOA is primarily responsible for agricultural production, with many biotechnologies
developed under MOA’s own research system (Huang and Wang, 2003). SEPA would
prefer a biosafety policy toward GM crops not so heavily dominated by molecular
biologists and agricultural production scientists from MOA and the Chinese Academy of
Agricultural Sciences (Paarlberg, 2000).
Another significant challenge is managing the large and extremely complex
agricultural biotechnology effort in China. Lack of coordination between the numerous
divisions administrating the program and between individual researchers has contributed to
unnecessary and inefficient duplication of efforts, particularly at the local level. This
results in fewer, more expensive technology advances.

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6 - Biosafety Regulations
Concerns have been expressed by Chinese policy-makers, insofar as over the last
decades, some administrative departments under the State Council have promulgated
several regulations relevant to biosafety management according to their administrative
responsibility, including:
• The Safety Administration Regulation of Genetic Engineering, issued by the Ministry of Science and Technology, and promulgated by the former State
Commission on Science and Technology on 24th December, 1993, which was in
fact not enforced and will not be enforced. This regulation consisted of general
principles, safety categories, risk evaluation, application and approval, safety
control measures, and legal responsibilities.
• Safety Administration Implementation Regulation on Agricultural Biological Genetic Engineering, issued by the Ministry of Agriculture on 10th July, 1996,
which was not enforced and cancelled after the promulgation of the Safety
Administration Regulation on Agricultural LMOs in May, 2001. This regulation in
many aspects is similar to the US’s GMO biosafety regulations. Labelling was not
part of this regulation. Nor was any restriction imposed on imports or exports of
GMO products. The regulation also did not regulate processed food products that
use GMOs as inputs.
• Biosafety Regulation on LMOs in Agriculture, issued by the State Council on 9th May, 2001; The objective of the regulation is to strengthen biosafety management
of LMOs in agriculture, protect human health and safety of biological organisms,
protect the environment and promote the development of biotechnology in
agriculture. The scope of the regulation is the research, experiment, production,
process, deal, import, export of LMOs in agriculture. The competent authority is
the Ministry of Agriculture. Its main mechanisms are the system of risk assessment,
the system of labelling, the procedure of ratification;
• Administration Regulation on Safety Assessment of Agricultural LMOs, issued by the Ministry of Agriculture on 11th July, 2001. The objective, scope, and competent
authority are the same as above. The procedures of risk assessment, application and
ratification, monitoring, and supervision are stipulated;

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• Administration Regulation on Safety of the Importation of Agricultural LMOs, issued by the Ministry of Agriculture on 11th July, 2001. The objective and
competent authority are the same as above. The scope of the regulation is import of
LMOs in agriculture. Procedures for the application and ratification of LMOs in
agriculture for the purposes of research, experiment, production, and process are
stipulated;
• Regulation on the Labelling of Agricultural LMOs, issued by the Ministry of Agriculture on 11th July, 2001. The objective and competent authority is the same
as above. The scope of the regulation is labelling in the circumstance of placing on
the market and import of LMOs.

In May 2001, the State Council decreed a new and general rule of Regulation on
Safety Administration of Agricultural GMOs to replace an early regulation issued by the
Ministry of Sciences and Technologies in 1993. The new regulation established four basic
management systems aimed at the safety management of agricultural GMOs (Wang et al.,
no year):
1. A joint meeting system on the safety management of agricultural GMOs was established
under State Council. The meeting is composed of responsible officials from MOA, MOST,
SEPA, Ministry of Public Health (MOPH), State Inspection and Quarantine Administration
(SIQA), and relevant departments. The important issues on agricultural GMOs are
discussed and coordinated on the meeting.
2. The management of agricultural GMOs was implemented in line with their safety level.
That is that agricultural GMOs will be divided into four safety levels from level I (the most
safety), II, III, to IV (the lowest safety), according to their potential risk to the human,
animals, plants and microorganisms.
3. Safety assessment system of agricultural GMOs was established. The activities
concerning the GMOs which are intended to conduct intermediate trial, environmental
release and commercialization need to make safety assessment and to obtain the approval
from the competent department.
4. Label system of agricultural GMOs was established. The species which are written into
the “The List of Agricultural GMOs” need to be labelled by manufacturers and distributors
before they are placed into marketplace.

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In addition, The Regulation also included the provisions related to the research and
experiment, the production and processing, the operation, the import and export, the
supervision and inspection of agricultural GMOs.
On January 5, 2002, the Chinese MOA issued implementing regulations for
transgenic products - specific regulations as a follow-up to the prior Biosafety
Administration Regulations on Agricultural Transgenic Products. These implementing
regulations consisted of three separate implementing documents: (a) Biosafety Evaluation
and Administration Regulations on Agricultural Transgenic Products; (b) Import Safety
Administration Regulations on Agricultural Transgenic Products; and (c) Labelling
Administration Regulations on Agricultural Transgenic Products (Marchant et al., 2002).
These new regulations placed restrictions on Chinese imports of transgenic
products, including those imported from the United States (e.g., biotech soybeans). March
20, 2002 was set as the effective date for implementing these regulations. Specific rules
included in these implementing regulations specified that (Marchant et al., 2002):
1. The Chinese Ministry of Agriculture’s approval process can take up to 270 days
to grant safety certificates that are needed for importing transgenic products through
China’s customs inspections;
2. Each shipment of biotech products imported into China needs a single or separate
safety certificate accompanying each shipment;
3. Transgenic products imported into China require test results or data obtained
from in-country field experiments within the exporting country (or a third country) to
prove that products are safe for human consumption and do not impose biosafety risks to
other plants, animals, or the environment;
4. There is a zero threshold level (based on qualitative test results) for transgenic
content in foods. Food products that contain transgenic content must be labelled;
5. The newly announced labelling regulations are applied to the following imported
transgenic products: soybean seeds, soybeans, soybean flour, soybean meal, soybean oil,
corn seeds, corn, corn oil, corn meal, rapeseed seeds, rapeseeds, rapeseed oil, rapeseed
meal, cotton seeds, tomato seeds, fresh tomatoes, and tomato ketchup (tomato jam).
There were several important changes to existing procedures included in these
guidelines, and also details of regulatory responsibilities after commercialization. These
included the addition of an extra pre-production trial stage prior to commercial approval,

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new processing regulations for GM products, labelling requirements for products marketed
in both domestic and international markets, new export and import regulations for GMOs
and GMO products, and local and provincial level GMO monitoring guidelines. Meantime,
the MPH also promulgated its first regulation on GMO food hygiene in April 2002 and
take effect after July 2002 (Huang and Wang, 2003).
By the late 2002, the system of biosafety regulation in China has clearly become
progressively more elaborate and sophisticated. Many provinces have established
provincial biosafety management offices under provincial agricultural bureaus. These
biosafety management offices collect local statistics on and monitor the performance of
research and commercialization of agricultural biotechnology in their provinces, and assess
and approve (or refuse) all applications of GM related research, field trials and
commercialization in their provinces. Only those cases that have been approved by the
provincial biosafety management offices can be submitted to the National Biosafety
Committee for further assessment (Huang and Wang, 2003).
The Chinese government hopes that these regulations will ensure the biotechnology
products grown in China for both domestic consumption and for international trade will
not pose risks to human health or the environment. These regulations have already been
responsible for delaying several attempts to commercialize new varieties of crops such as
rice and corn. In general, it appears that China is beginning to put in place increasingly
stringent regulations on GM foods in particular. While widespread support and favourable
policies have been granted for non-food GM products (such as cotton), both domestic and
international food safety concerns have begun to influence the government’s regulations
and policies regarding GM foods. Some Chinese scientists argue that this more cautious
approach is justified given that the next generation of GM crops includes staple foods such
as rice which could be consumed by billions of people around the world and whose safety
now rests in China’s hands (Loppacher and Kerr, 2004).

7 - Trade and Biotechnology in China
China has had to dramatically alter its trading practices, regulations, tariff system,
non-tariff trade barriers, market structure and domestic legislation in order to be in
compliance with their WTO accession agreement. While China has made considerable

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progress in moving toward compliance with the WTO’s trade regime, the process has been
difficult and may result in a considerable number of trade disputes. The Chinese
government still frequently changes major policies affecting trade with little to no notice
given to other members of the WTO. Even after these policies are made public, they are
often vague and full of ambiguities. Rapid and unilateral shifts in trade policy and
domestic policies that affect international commerce runs contrary to the WTO and will
lead to complaints from China’s trading partners.
Many of the most restrictive policies faced by firms wishing to export to China are
a direct result of the pressure the government faces to provide strong domestic protection.
While Chinese economic reforms have reduced the role of government, there is still a
widespread expectation that the government should intervene when firms face financial
difficulties. When China joined the WTO, they had to agree to reduce or eliminate a wide
range of trade barriers. This has led many analysts to believe that the motivation for some
of these new and confusing regulations is a way to circumvent China’s WTO commitments
and provide protection for their local industries. These technical and “scientific” barriers to
trade have already been used to deny exporters of biotechnology access to the European
Union market and many believe it is reasonable to assume that China sees it as a way to
skirt around their obligations to open their markets to foreign competition. China has also
been accused of making less stringent trade regulations for domestically manufactured
products than regulations for their foreign counterparts, a particularly contentious issue in
biotechnology trade and which runs counter to China’s “National Treatment” commitments
under the WTO.
China enters into trade to acquire the technology it needs to develop. It does not
want the foreign exchange acquired through the exports frittered away on the importation
of consumer goods. Instead, foreign exchange should be used to acquire technology. This
difference in philosophy leads China to be more interventionist in their trade regime than
those of developed market economies. It also leads to potential disputes at the WTO.
Further, China’s experience with trade regimes signed with western powers over the last
three hundred years has not been particularly positive, starting with “unequal treaties”
arising from the Opium Wars of the 19th century. This leads China to view the WTO from
a jaded perspective. One cannot expect China to voluntarily play by the rules, but rather to
attempt to circumvent them when it does not suit China’s interests.

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7.1 - Impact of China’s 2001-2002 Biotechnology Regulations on Imports

Recent changes to the regulatory framework regarding biotechnology have become
contentious trade issues. These regulations, ostensively designed to deal with safety issues,
were first promulgated in 1993. The State Science and Technology Commission of China,
the Ministry of Agriculture, and the Ministry of Health, all issued regulations regarding
biosafety matters. These regulations were modified, clarified and enhanced in 2002 when
the Ministry of Agriculture issued three documents for managing biosafety, the Biosafety
Evaluation Regulation for Agricultural GMOs, Import Regulation for Agricultural GMOs,
and Labelling Regulation for Agricultural GMOs. The effects of the Biosafety Evaluation
Regulation was discussed above and applies to all products that will be produced in China,
including imports of intermediate goods containing GM material. If imports that will be
used in the production chain are deemed as having a moderately high degree of risk, the
restrictions that the product will face will be quite stringent. These import regulations have
had, and will continue to have, the largest effect on the trade of biotechnology products.
These new regulations have been met with strong opposition from China’s trading partners,
especially the US, who view them as protectionist rather than science-based. In addition to
being coupled with the Labelling Regulation, these regulations require companies
exporting products to China to apply for safety certificates stating that their products are
harmless to humans, animals and the environment. It has been estimated that it will take at
least 270 days, in addition to any delays that may be caused by having to wait for the crops
to be grown for evaluation purposes.

7.1.1 - The case of US soybeans
In December 2001 China joined the WTO, and many argue that the Chinese
labelling rules were introduced so that China could not be accused of doing this afterwards
to restrict trade. The rules introduced a labelling threshold that on paper is the strictest in
the world at 0 per cent. After this was announced there was a long running dispute centred
on imports of soybeans, principally from the United States. China initially imposed a
moratorium on imports of GM soybeans unless they were labelled. Then in December
2002 it issued interim rules which were extended until September 2003, and again until

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April 2004. This ruling allows GM soybeans to continue to be imported while safety
assessment is carried out. Such a ruling buys time for Chinese administrators while still
allowing the possibility of a declaration that GM soybeans are not safe at some point in the
future. The multinational corporations of course oppose China’s strategy arguing that
environmental and food safety studies of imported GM crops have taken place elsewhere
to an adequate standard. China has also been able to use the 270 day ruling under the
Cartagena Protocol on Biosafety to say that GMO imports can be held for this period of
time while a safety assessment is carried out (Keeley, 2003c). But in a world of
international trade agreements China needs to formulate policies that do not incur trade
sanctions, or infringe trade rules, and its decisions for the most part need to be justified as
fitting with the sound science criteria that are the basis for exemptions and exclusions in
the sub agreements to WTO such as the Sanitary and Phytosanitary and Technical Barriers
to Trade agreements (Keeley, 2003c).
Similar observations can also be made in relation to the decision-making process
over whether or not to allow the import of GM soybeans. Here the regulation story
emphasises the international dimension. China imported 14m metric tons of soybeans in
2001 (from the US, Argentina and Brazil) and most of these were Round-up Ready, the
herbicide resistant GM variety. For US soybeans exports China is the single largest market
importing US $ 1 billion in 2001. Most of this soya is used for feed or for processing. In
2001 China lost 10 m RMB (US $ 1.2m) of soy sauce exports to Korea, and it has also
faced the threat of lost markets in the European Union due to consumer rejection of GM
products. These experiences appeared to have a very important effect. They made it clear
that a commitment to GM may not be in China’s interests in terms of international trade.
As this argument took hold it appeared to result in a complete re-evaluation of China’s
commitment to biotechnology, and whereas a few years earlier there had been a glut of
articles on China’s GM revolution, suddenly the international press began to report that
China was cooling on biotechnology (Keeley, 2003c).
Following China’s imposition of a temporary moratorium on GM soybean imports
while regulations were developed, President Bush made a high-level visit in February 2002
to persuade the government to keep trading channels open while regulations on biosafety
were recast. Following rounds of negotiation in China, US Agriculture Secretary Ann
Veneman and US Trade Representative Robert Zoellick announced in early March that

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the US and China had reached an agreement. This agreement indicated that China would
temporarily allow imports of agricultural transgenic products that had completed the safety
review process within an exporting country (e.g., the United States). On March 10, 2002,
immediately before the effective date set by the implementing regulations, China’s
Ministry of Agriculture issued a temporary measure permitting all exporting traders to ship
transgenic soybeans into China using temporary import certificates through December 20,
2002, according to the Temporary Administration Procedure of Import of Agricultural
Transgenic Products. Each temporary import certificate granted by the Chinese Ministry of
Agriculture was good for 10 shipments (Marchant et al., 2002).
Before the termination date of these temporary import regulations (December 20,
2002), the Chinese Ministry of Agriculture announced an extension to September 20, 2003.
On July 17, 2003, the Chinese MOA announced that the temporary import regulations
would be further extended to April 20, 2004 (MOA, 2003). However, after September
2002, each tentative import certificate issued by the Chinese government is good for only
one shipment of biotech soybeans, in contrast to the 10 shipments approved earlier
(Marchant et al., 2002).

8 - China’s Stance on Biotechnology Development – For or Against?
While the government of China provides considerable financial support for the
biotechnology industry and makes extensive claims about the benefits biotechnology will
bring to their society, when it comes to regulations, the commitment is less firm and
increasingly opaque. The President of Monsanto in China, the firm that holds the only
foreign GM licence, John L. Killmer states that, “[China has] one foot on the accelerator,
which is funding biotech research and development, and they have one foot on the
regulatory brake”. The lack of clear and consistent direction from the government creates
an extremely risky business environment for those wishing to export GM products to
China or to invest in biotechnology related activities, including research (Loppacher and
Kerr, 2004).
The Chinese government’s failure to provide clarity regarding the future direction
of regulatory policy has made foreign governments, particularly those in the European
Union, extremely nervous that insufficient care will be taken in the design and enforcement

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of regulations to assure the food safety and environmental concerns of consumers and
others in the European Union. As a result, they have been pressuring the Chinese
government for stricter safety protocols. The government has not yet been able to find a
good balance between ensuring their products are safe, satisfying international concerns
and encouraging the industry to grow. If the balance cannot be found, not only will the
public firms suffer considerably, meaning ongoing subsidies, the lack of certainty will
discourage private domestic and foreign investment.
While the apparent acceptance of biotechnology products in China is a significant
advantage at present, there is uncertainty over its long-term continuance. Although the
limited information available suggests that Chinese consumers have a high level of
awareness, they also have little accurate knowledge of GM foods. As Chinese consumers
have not been exposed to the debates regarding the safety of biotechnology, their views
could easily be shifted if there were to be negative media coverage in the future.
The Chinese government has put regulations in place that restrict foreign
investment in an attempt to ensure that what they perceive as a vital future industry
remains under domestic control. The cost may be loss of opportunity for technology
transfers.
As shown by the evidence above, China will play an important role in international
biotechnology trade, but it will not be without controversy or conflict. The Chinese
government continues to invest heavily in biotechnology development and if they are
going to be successful, they must secure international markets for their products. One
necessary component of successful trade relationships will include allowing biotechnology
products, such as GMOs, into the Chinese market as a sign of goodwill. The new safety
regulations that China has put in place are clearly a barrier to trade, whether intended or
not. The Chinese government has proved, however, that they are willing to compromise to
accommodate the needs of foreign producers and to avoid disrupting trade beyond what is
absolutely necessary.
Long term acceptance of biotechnology products in China, both domestic and
foreign, has still not been determined. No one knows (likely including the government
itself) what the next move will be in terms of regulations for products such as GMOs.
China’s government needs to take a firm stand rather than trying to sit on the fence. If they
decide to support it wholeheartedly, biotechnology producers, such as the US, will become

Chapter IV – Biosafety Management and Regulations in China
Agricultural Biotechnology in China: A National Goal 166
strong international allies. If, on the other hand, China decides that the health and
environmental risks are too high and put stringent safety regulations in place, not only will
it serve as a significant trade barrier, the effect on their domestic industry will likely be
detrimental.
If China chooses to embrace biotechnology, their head start in the market will prove
to be an important advantage. China is already the fourth (albeit a distant fourth) largest
grower of transgenic plants in the world. They certainly have the potential to at least retain
their competitive advantage, if not increase it significantly. As mentioned earlier, China
has some issues with compliance to the WTO that need to be resolved if they are to reap all
the benefits of their commitments.
In general, China has had to develop biosafety regulations both for domestic and
international purposes. Locally, to deal with the challenge of how to regulate its own GM
products (and imported GM seed), and internationally, in response to the global trade in
GMOs, and changing agricultural contexts following entry into WTO. The argument is that
China has practised biosafety and devised and implemented regulations quite strategically.
And why not – the US is after all a powerful actor on the international stage prepared to
use any means to support its trading interests and those of its key corporations. China is
new to this and it has to get smart. Being ultra-transparent or kowtowing to US demands in
relation to process may only result in them being rolled over either in terms of subsided US
exports, or US GM seeds. But approaching biosafety in this way carries with it dilemmas
Keeley, 2003c).
China however seems to use biosafety in its own way to frame the biotechnology
debate in a way it finds useful, that is it wants biotech, but only on certain terms, and risk
assessment and regulation are important ways of asserting this. But this approach is also
precarious. Other voices in China can also show limits to the sound science approach, or
push for consistent and thorough risk assessment. This can challenge the room for
manoeuvre of some of the core networks of actors trying to shape and guide the path of
biotechnology in line with China’s basic policy of supporting biotechnology as a key
industry and key tool in Chinese development as set out in the mid-1980s with the
formation of the 863 committee. The next section looks at how processes and practise of
biosafety have been contested looking first at the theme of Bt cotton biosafety assessment
and then at research into the potential impacts of GM food crops (Keeley, 2003c).





Conclusion





Conclusion
Agricultural Biotechnology in China: A National Goal 168
Conclusion

In an ever-increasing demand for food and food security in developed and
developing countries agricultural biotechnology has become increasingly important. As
such, the Chinese government has come to view agricultural biotechnology essentially as a
tool to help improve the nation’s food source, raise agricultural productivity, increase
farmer’s incomes, foster sustainable development, and improve its competitive position in
international markets. In order to meet such objectives, the Chinese government has made
considerable resources available to the sector and actively promoted its development since
the mid 1980s.
To ensure food security for its 1.3 billion people, Beijing has injected large sums of
public money into agricultural biotechnology research for some decades now. And what is
more, China’s plan appears to have two sides: push forward fast on GM foods which offer
high yield, and resistance disease, while promoting GM-free areas for crops for sale to rich
export markets, where many consumers still reject the idea of genetically modified food.
However, the considerable scientific success of the biotechnology sector in China
has lead to a rapidly growing increase in support in recent years by policy makers,
investors and the public in general. In the second half of the 1990s, biotechnology
spending more than doubled from the equivalent of US $40 million to US $112 million per
year. The Chinese government has also promised to increase research budgets by 400
percent over the five-year period between 2002 and 2007. Even though China is a
developing country, its total expenditures on agricultural research and development
comprises an estimated 10 percent of global public expenditure. There are currently nearly
400 major biotechnology laboratories aided by the government and more than 20,000
research and technical personnel working in the industry. This research effort has yielded a
wide array of genetically modified (GM) varieties that have gone through field trials, been
cleared for environmental release and have been put into commercial production.
Genetic modification has had a number of objectives (or combinations of
objectives): insect resistance, bacterial-fungus resistance, virus resistance, salt tolerance,
drought resistance, nutrition enrichment, quality improvement or yield increase. China has
the fourth highest commercial acreage of transgenic crops, behind the U.S., Canada and
Argentina. In China, six crops have been issued licences that permit commercial

Conclusion
Agricultural Biotechnology in China: A National Goal 169
production. Two licences were granted for different varieties of insect resistant cotton. In
2000, GM cotton was planted on 700,000 hectares in China. Two licences were also
granted to tomato varieties, one that is modified to delay ripening and one that is virus
resistant. Colour-altered petunias and virus resistant sweet peppers have also been licensed.
Monsanto, which is based in the US, holds the only license that has been issued to a
foreign company for their variety of GM cotton.
There are still a large number of modified plants that have not yet been
commercialized but are in field trials or have been cleared for environmental release. As of
1999, these included: two new varieties of insect resistant cotton; three varieties of disease
resistant cotton; insect, disease and herbicide resistant rice; salt tolerant rice; improved
quality and virus resistant wheat; improved quality and insect resistant maize; herbicide
resistant soybeans; disease resistant potatoes; disease resistant rapeseed; virus resistant
tobacco; virus resistant peanuts; virus resistant cabbage; cold tolerant and multi-virus
resistant tomatoes; virus resistant melons; virus resistant papayas; insect resistant poplar
trees; and bacterial resistant pogostemun.
As discussed briefly above, and as this dissertation has shown, China has made
major investments in plant biotechnology and the government investments have paid off in
benefits for small farmers. Bt varieties of cotton reduced the costs of production, increased
the income, and possibly improved the health of poor farmers in China. The economic
benefits from the government cotton varieties were far higher than the current cost of all
plant biotech research in China. This suggests that the large increases in biotech research
approved for the new five-year plan will have a high rate of return. Evidences show that
the Chinese government is going to continue funding and improving its research capacity,
especially in the basic sciences, so that when biotechnology finally does realize its
potential, China will be well placed to reap its benefits.
Therefore, China will eventually seek to expand her industrial base beyond
electronics and computers, since biotechnology has an obvious appeal. The field is so
young and undeveloped that Western companies have not scooped up all the market niches.
Thus, China offers more of an opportunity to develop biotechnology products than
anywhere else in the world, including the US. But perhaps the most important
consideration is also the simplest: China has a population of over one billion, nearly one-
fifth of the global population, and it is a developing country. For these reasons, China is an

Conclusion
Agricultural Biotechnology in China: A National Goal 170
important test case for the successful application of biotechnology to meeting economic
development goals and basic human needs in developing countries. In this crucial way,
Chinese biotechnology goals can and should diverge from those of developed countries.
However, research in biotechnology is extremely high costs and the Chinese
government must decide if it is going to continue to bear almost the entire burden for
funding the nation’s biotechnology research. Currently, there is almost no domestic private
sector funding of plant biotechnology. China has options for increasing private research
but many of the options are constrained by poor intellectual property rights,
underdeveloped seed markets, and prohibitive regulations of private firms. The
government creates some of these constraints; others are a function of underdeveloped
institutions and would take a significant amount of time to develop.
Many issues, however, face China’s policy makers and research administrators.
China has recently put into place a system of regulation and biosafety. But it is new, small,
under-funded, and has not proven its ability to produce and enforce effective regulation.
China’s leaders are also struggling with issues of consumer safety and acceptance,
both within their own country and in the countries that import the farm commodities that
China produces. Almost nothing is known about how the average Chinese consumer will
react if they learn that their food was produced with genetically modified varieties. There
is little knowledge in China about the production of their foods. For example, almost no
one is aware that large amounts of the nation’s imported soy oil are from herbicide-
resistant soybean varieties grown in the U.S. and elsewhere. Although most of the
production of China’s major staple crops is consumed locally, leaders still worry about the
impact of the use of transgenic varieties on exports. In recent years, China was the second
largest exporter of maize and has begun to ship increasing quantities of rice into world
markets. There are worries that the commercialization of transgenics could harm some of
the markets, since countries like Japan and South Korea have begun to express concerns
and increase regulations on the imports of genetically modified crops. It was these worries
that led officials to stop farmers from using GM tobacco.
It has been discussed in this study that China’s beefing up of its investment in
biotech research is clear evidence that this is a temporary state of affairs and that
policymakers are biding their time, when the right moment arrives they will move ahead
and capitalize on China’s years of investment in a range of transgenic. China’s amber light

Conclusion
Agricultural Biotechnology in China: A National Goal 171
is important in the international struggle over the future of GM crops most obviously being
currently played out between the US and the EU. China is for some an indicator of the state
of play, and China’s current apparent lukewarm attitude to the idea of widespread
commercialization of GM food crops reflects the generally difficult situation that
proponents of GM find themselves in internationally.
This work has pinpointed several reasons to explain the real reason why China has
not commercialized GM food crops. Some argue that, as discussed above, the principal
concern is loss of export markets to key trading partners with large numbers of consumers
rejecting GM products. Another is that, in the context of trade liberalization, China will be
unable to compete with – principally US imports – of a few key crops, and that this will
have serious implications for the livelihoods of certain sections of the Chinese farming
population and certain geographical areas. An additional argument is that while China may
have the technologies in place, in terms of commercialization, Chinese seed and biotech
firms are not nearly ready to compete with the big multinational corporations.
The rapid pace of social change, the growth of new industries and the rapid spread
of the market economy are a product of a conscious policy of opening to the outside world,
perhaps reflected most strongly in the recent accession to WTO. Change has been styled by
Chinese policy-makers, particularly since Deng, but with clear earlier antecedents, as a
process of modernization. Embracing science and technology to catch-up with the West
and escape backwardness, and in the case of agricultural biotechnology to improve the
livelihoods of a still huge rural farming population, have been central to this vision of
development.
As part of its modernization drive China has invested in and developed new
technologies rapidly. To some extent this ability to effectively channel resources reflects
traditions of planning and mobilization that are still strongly routed in present day politics
and bureaucracy. At the same time, however, China has had to construct new science-
policy cultures to deal with these new technologies and the risks associated with them. The
strengths and weaknesses of these cultures, their ability to regulate effectively, to handle
risk and uncertainty, and to earn public trust will increasingly be key questions in China.
There is a sense, as has been illustrated in this work that, in relation to regulation of
Bt cotton and food crops, that while regulators are smart at defending China’s interests in
some respects, particularly in relation to foreign corporations or imports, in others there

Conclusion
Agricultural Biotechnology in China: A National Goal 172
may be problems, for example, they may not be thinking carefully enough about
environmental impacts. Moreover, fears that foreign companies may start to patent genetic
material obtained from native Chinese products are now behind stepped-up efforts to
police biotechnology, showing how nationalism is shaping views on how to commercialize
the science. Recent efforts to restrict access to China’s biotech market have prompted
complaints from foreign industry executives, who say government protectionism is stifling
investment and export opportunities.
Although China is still struggling with issues of consumer safety and acceptance,
many competing factors are putting pressures on policy makers to decide whether or not
continuing commercializing transgenic crops. The demand of producers (for productivity-
enhancing technology) and consumers (for cost savings), the current size and rate of
increase of research investments, and past success in developing technologies suggest that
products from China’s plant biotechnology industry will one day become widespread
inside China.
Finally, the size of the China’s research investment, the rise of its human capital
and its past success at developing both biotechnology tools and GM plants suggest that
China’s plant biotechnology industry may one day become an exporter of biotechnology
research methods and commodities. Opportunities for contract research; the sales of genes,
markers and other tools; and exporting GM varieties are expanding in both industrialized
and developing countries. China has advantages such as a large group of well-trained
scientists, low cost research, limited regulation, and large collections of germplasm. In
addition some seed companies have experience doing contract seed production for export
and many pesticide firms have developed markets throughout the world for generic
pesticides. China has the disadvantage of having almost no commercial biotech industry, a
fragmented seed industry of small firms, public researchers with little experience working
with corporations, and a weak intellectual property rights regime. The competition for
China will primarily be from the private sector and the public sector in other countries--the
private life science giants, small private biotech firms in industrialized countries, and
universities in the U.S and other industrialized countries. Because of the lack of capital and
experience in global competition, China may have trouble competing in the most lucrative
markets. However, the multi-national life science companies likely will be willing to leave

Conclusion
Agricultural Biotechnology in China: A National Goal 173
smaller crops and smaller countries to China and the plant biotechnology industries of
other developing countries or small companies.
China’s future in the biotechnology industry is still a blank page in the history
books, waiting to be written. It is certainly in a position to benefit from the opportunities
that biotechnology may provide such as increased food security, domestic production and
rural incomes, decrease environmental degradation and the economic, social and political
benefits that would accompany increased international trade. While China has laid the
foundation as an important player in the industry, they have also begun to lay the
foundation for stifling their carefully constructed industry by imposing drastic safety
regulations on GMOs. The government needs to carefully examine what these arguably
non-science based rules could do not only to the domestic biotechnology industry but to
the Chinese economy as a whole. China is now in the unique position of being ready to go
in whatever direction it chooses, it just must choose what direction that is.









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Table 10 – Use of modern inputs, China, 1952-95.
Irrigation Tractor-plowed area Chemical fertilizer
Year Total irrigated area (M
ha)
Irrigated area in total
cultivated area (%)
Powered irrigation
in irrigated area (%)
Total area (M ha)
Share in
sown area (%)
Total amount (M t)
Per hectare (Kg/ha)
Electricity (M KWh)
1952 19.96 18.5 1.6 0.14 0.1 0.08 0.5 50 1957 27.34 24.4 4.4 2.64 2.4 0.37 2.3 140 1962 30.55 29.7 19.9 8.28 8.1 0.63 4.6 1,610 1965 33.06 31.5 24.5 15.58 15.0 1.94 12.4 3,710 1978 44.97 45.2 55.4 40.67 40.9 8.84 58.9 25,310 1984 44.64 46.1 56.4 34.91 30.9 17.40 120.6 46,400 1995 49.28 51.9 65.6 n.a. n.a. 35.94 239.7 71,200 Source: Lin (1998)


Table 11 – Annual Growth Rates (%) of China’s Economy, 1970-98.
Reform period
Pre-reform 1970-78 1979-84 1985-95 1996-98
Gross Domestic Product 4.9 8.5 9.7 8.7 Agriculture 2.7 7.1 4.0 4.0 Industry 6.8 8.2 12.8 10.7 Service na 11.6 9.7 7.9 Foreign Trade 20.5 14.3 15.2 5.0 Import 21.7 12.7 13.4 10.8 Export 19.4 15.9 17.2 2.0 Population 1.8 1.4 1.4 1.0 GDP per capita 3.1 7.1 8.3 7.7 Source: Huang et al. (2001a)

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Table 12 – Average annual growth rate of total factor productivity (TFP), grain, gross
domestic product (GDP), and consumption, China.
Grain Consumption level index Period Agricultural TFP* Total Per capita
GDP National Urban Rural
1952-96 1.51 2.52 0.77 7.7 4.5 4.7 4.0 1952-78 -0.25 2.41 0.40 6.1 2.2 2.9 1.8 1978-84 5.10 4.95 3.70 9.3 7.7 4.5 9.0 1984-96 3.91 1.55 0.14 10.2 8.1 8.5 6.4 Source: Lin (1998).


Table 13 - Major science and technology policy measures related to biotechnology in
China since the early 1980s. Policy measures Description Technological Transformation Providing criteria of royalty and advanced payment
to the scientists and the institutions for the technology transformation. The “Temporary regulation of technology transfer” was issued in 1985. The Technology Contract Law (draft) was issued in 1987, amended and completed in 1998. It was implemented by the State Economic Commission and includes both domestic and imported technologies.
Key Breakthrough S&T Program
Since 1982 the State Planning Commission (SPC, the later SDPC) has formulated the Program and updated every five years and approved. The projects are increasingly open to tenders from competing research institutions. One of major components of these projects is on biotechnology.
Patent system Patent law promulgated 1985. Introduced as a complement to S&T awards in order to provide incentives for the discovery and dissemination of new technology. A total of 1599 applications on genetic engineering for invention patents were filed in past 14 years (1985 to 1999).
National Biotechnology Development Policy Outline Prepared by more than 200 scientists and officials under the leadership of MOST, SDPC, and the State Economic Commission in 1985 and revised in 1986. Formally issued by State Council in 1988. The Outline defined the research priorities, development plan and measures to achieve the targets.
National Key Laboratories (NKLs) on Bioetchnolgy Key laboratories equipped with advanced instruments have been established in agricultural biotechnology fields by the SDPC and the MOA since 1985, the laboratories should receive both domestic and foreign guest researchers and call for open projects. A total number of 30 NKLs in biotechnology have been established, and 15 NKLs are focused on plant, animal, and agriculturally related biotechnology. The MOST is responsible for

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NKLs establishment and assessment. S&T Firms Promotion of new research, development and
production ventures. These may be established jointly by research or production and entrepreneurial units or may be independently operated by research or entrepreneurial units.
National Program for Key S&T Projects Started in 1982 to promote the modernization of traditional industries and to enhance the nation’s S&T capacity.
The Climbing Program A National Program for Key Basic Research Projects.
Natural Science Foundation of China (NSFC) Established in 1986 to support basic science research complementary with “863 plan” according to criteria of academic excellence. Life science and Agronomy are two support areas related to the agro- biotechnology.
High Technology Plan (863) Established in 1986 to support a large number of applied research projects with 10 billion RMB for 15 years to promote high technology R&D in China. Biotechnology is one of 7 supporting areas with a total budget of 0.7 billion RMB.
Biosafety regulations MOST issued the Biosafety Regulations on Genetic Engineering in July of 1993, which include the biosafety grading and safety assessment, application and approval procedure, safety control measures, legal regulations, et al.
Agricultural biosafety regulations MOA issued the Safety Administration, Implementation, and Regulations on Agricultural biological Genetic Engineering in July 1996.
“973 Plan” Initiated in March 1997 to support the basic S&T research. Life science is one of the key supporting areas.
Safety Committee Bioetech Safety Committee was set up in MOA in 1997. The committee is in charge the implementation of agricultural biosafety regulations
Special Foundation for Transgenic Plants A 5-year-program launched in 1999 by the Ministry of Science and Technology to promote the research and development of transgenic plants in China. The total budget of this program in the first 5 years is 500 million RMB.
Key Science Engineering Program Started in the late 1990s under MOST and SDPC to promote basic research, including biotechnology program. The first project on biotech (crop genoplasm and quality improvement) was funded in 2000 with 120 million RMB.
Special Foundation for Hightech Industrialization A program supported by the SDPC to promote the application and commercialization of technologies, started from 1998
Bridge Plan In 1999, MOA initiated the Bridge Plan, focused on diffusion of new technology that is about ready for diffusion.
New varieties protection Regulation on the Protection of New Varieties of Plants was issued in 1999
Seed law A first Seed Law was issued in December 2000. The Law indicates that the selection/breeding, GM plant varieties, experiment/testing, certification/approval, and extension must follow the safety evaluation

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procedures according to the regulation issued by the State Council. The sale of GM plant variety seeds should be labelled clearly and remind the safety control measures when applying the seeds.
Source: Huang et al. (2001a).


Table 14 - Numbers and Composition of Plant Biotechnology Research Staff in Sampled
Institutes, 1986-99.
Year Professional staff Support staff Mgt Research Sub-
total Technical Other Sub-total Total staff
Staff number 1986 82 203 285 80 276 356 641 1990 114 295 409 98 301 399 808 1995 164 371 535 111 322 433 968 1999 207 484 691 133 381 514 1205 1999a 264 705 969 233 455 688 1657
Composition (%) 1986 13 32 44 12 43 56 100 1990 14 37 51 12 37 49 100 1995 17 38 55 11 33 45 100 1999 17 40 57 11 32 43 100 1999a 16 43 58 14 27 42 100
Staff number by institute and university in 1999a University 52 72 124 15 27 42 166 Research institute 212 633 845 218 428 646 1491 Note: All data are from 22 biotechnology research institutes except for those with 1999a
that includes 29 institutes in 1999. These 29 institutes account for about 80% of research
staff, about 85% of research expenditure, and more than 90% of research output in China’s
plant biotechnology.
Source: Huang et al. (2001b).

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Table 15 - Plant Biotechnology Professional Research and Management Staff by
Education in Sampled Institutes, 1986-99.
Professional staff by education Year Ph. D. MS BS Others Total
Staff number 1986 5 39 172 69 285 1990 31 90 197 91 409 1995 72 112 238 113 535 1999 141 159 269 122 691 1999a 203 279 343 144 969
Composition (%) 1986 2 14 60 24 100 1990 8 22 48 22 100 1995 13 21 44 21 100 1999 20 23 39 18 100 1999a 21 29 35 15 100
Staff number by institute and university in 1999a University 58 35 27 4 124 Research institute 145 244 316 140 845
Note: All data are from 22 biotechnology research institutes except for those with 1999a
that includes 29 institutes in 1999.
Source: Huang et al. (2001b).


Table 16 - Professional Research and Management Staff in Full-Time Equivalent and by
Gender in Sampled Institutes, 1986-99.
Staff number Gender share (%) Year Female Male Female Male Full-time
Equivalent 1986 94 191 33 67 236 1990 139 270 34 66 344 1995 182 353 34 66 457 1999 228 463 33 67 608 1999a 349 620 36 64 874 Note: All data are from 22 biotechnology research institutes except for those in the last low
that includes 29 institutes.
Source: Huang et al. (2001b).





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Table 17 – Plant Biotechnology Research Budget by Source in the Sampled Institutes,
1986-99. By source Year Core Project Equipment Commerce Consultant Contract Donors Others Total
Million RMB yuan in 1999 price 1986 4.2 5.4 4.9 0.0 0.0 0.0 1.5 0.0 16.0 1990 4.1 13.3 8.1 0.0 0.0 0.0 2.1 0.0 27.7 1995 4.8 20.3 3.3 0.1 0.0 0.0 2.6 1.5 32.7 1999 14.4 60.0 8.1 0.3 1.0 0.1 6.9 2.0 92.8 1999a 19.4 86.9 10.9 0.3 1.3 1.1 7.6 3.3 130.8
Composition (%) 1986 26 34 31 0 0 0 9 0 100 1990 15 48 29 0 0 0 8 0 100 1995 15 62 10 0.3 0 0 8 5 100 1999 16 65 9 0.3 0.1 7 2 100 1999a 15 66 8 0.3 0.8 6 3 100
Research budget by institute and university in 1999a University 2.4 29.4 2.6 0.2 0.0 0.0 0.8 1.3 36.7
Research institute 17.0 57.5 8.2 0.2 1.2 1.1 6.9 2.0 94.1
Note: All data are from 22 biotechnology research institutes except for those with 1999a
that includes 29 institutes in 1999.
Source: Huang et al. (2001b).


Table 18 – Plant Biotechnology Research Expenditure by Category in the Sampled
Institutes, 1986-99.
Year Personnel Operating Capital Total Million RMB yuan in 1999 price
1986 4.7 3.0 5.5 13.2 1990 5.1 10.3 8.8 24.1 1995 7.8 15.6 6.0 29.5 1999 14.0 44.0 21.5 79.5 1999a 22.8 56.2 29.3 108.2
Composition (%) 1986 36 23 42 100 1990 21 43 37 100 1995 26 53 20 100 1999 18 55 27 100 1999a 21 52 27 100 Note: All data are from 22 biotechnology research institutes except for those in the last low
that includes 29 institutes.
Source: Huang et al. (2001b).



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Table 19 – Plant Biotechnology Research Expenditure per Staff in the Sampled Institutes,
1986-99.
Thousand RMB yuan in current prices Thousand RMB yuan in 1999 prices Year Professional Total staff Professional Total staff 1986 17.5 7.8 46.4 20.6 1990 34.0 17.2 59.0 29.8 1995 54.5 30.1 55.1 30.5 1999 115.0 66.0 115.0 66.0 1999a 116.6 65.3 116.6 65.3 Note: All data are from 22 biotechnology research institutes except for those in the last low
that includes 29 institutes.
Source: Huang et al. (2001b).


Table 20 – Research Focus of Plant Biotechnology Programs in China.
Crops/traits Prioritized areas Crops Cotton, rice, wheat, maize, soybean, potato,
rapeseed, Cabbage, tomato Traits Insect resistance Cotton bollworm and aphids
Rice stem borer Maize stem borer Soybean moth Potato beetle
Disease resistance Rice bacteria blight and blast Wheat yellow dwarf and rust Soybean cyst nematode Potato bacteria wilt Rapeseed sclerosis
Stress tolerance Drought, salinity, cold Quality improvement Cotton fiber quality
Rice cooking quality Wheat quality Maize quality
Herbicide resistance Rice, soybean Functional genomics Rice, rapeseed and arabidopsis
Source: Huang et al. (2001b).

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Table 21 – Available GM Plant Events in China by 1999. Crop Introduced Trait Field
Trial Environmental
Release Commer- cialized
1. Cotton Insect resistance Yes Yes Yes Bollworm (Bt) Yes Yes Yes Bollworm (Bt+CpTI) Yes Yes No Bollworm (CpTI) Yes No No Bollworm (API) Yes Yes No Disease resistance Yes Yes No Verticillium & Fusarium (Chi) Yes Yes No Verticillium & Fusarium (Glu) Yes Yes No Verticillium & Fusarium (Glu+Chi) Yes Yes No 2. Rice Insect resistance Yes Yes No Stem borer (Bt) Yes Yes No Stem borer (CpTI) Yes Yes No Rice planthopper Yes Yes No Disease resistance Yes Yes No Bacteria blight (Xa21) Yes Yes No Fungal disease Yes Yes No Rice dwarf virus Yes Yes No Herbicide resistance Yes Yes No Salt tolerance (BADH) Yes No No Ac/Ds (rice mutant) Yes No No 3. Wheat BYDV resistance & quality improvement Yes No No 4. Maize Insect resistance (Bt) & quality improvement Yes Yes No 5. Soybean Herbicide resistance Yes Yes No 6. Potato Disease resistance Yes Yes No Bacteria wilt Yes Yes No PVY resistance Yes Yes No Viroid resistance Yes Yes No Disease resistance & quality improvement Yes Yes No 7. Oil rape Disease resistance Yes Yes No 8. Tobacco Insect resistance (Bt or CpTI) Yes Yes Yes->No* TMV resistance Yes Yes No 9. Peanut Stripe virus reistance Yes No No 10. Chinese cabbage
Turnip mosaic virus resistance Yes No No
11. Tomato CMV resistance Yes Yes Yes TMV & CMV resistance Yes No No Time-altered shelf life Yes Yes Yes Cold tolerance (asp) Yes Yes No 12. Melon CMV resistance Yes No No 13. Sweet pepper
CMV resistance Yes Yes Yes
14. Chilli CMV/TMV resistance Yes Yes No 15. Papaya PRSV resistance Yes Yes No 16. Poplar tree Insect resistance Yes Yes No 17. Pertunia Flower-color altered Yes Yes Yes 18. Pogostemun
Bacteria wilt resistance Yes No No
* Commercialized in 1992 but stopped in the middle 1990s due to trade issues
Source: Huang et al. (2001b).


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Table 22 – Number of cases submitted and approved for field trials, environmental release,
and commercialization in China from 1997 to 1999.
1997 1998 1999 Total Plant Field Trial --Submitted 7 21 14 42 --Approved 5 20 20(11+9)* 45 Environmental release --Submitted 35 16 53 104 --Approved 29 8 28 65 Commercialization --Submitted 6 9 30 45 --Approved 4 2 24 30 Microorganisms Field Trial 5 20 14 39 --Submitted 5 20 13 38 --Approved Environmental release --Submitted 2 2 10 14 --Approved 1 2 6 9 Commercialization --Submitted 0 0 4 4 --Approved 0 0 3 4 Animal Field Trial --Submitted 2 0 0 2 --Approved 2 0 0 2 Environmental release --Submitted 0 0 0 0 --Approved 0 0 0 0 Commercialization --Submitted 0 0 1 1 --Approved 0 0 0 0 Total --Submitted 57 68 126 251 --Approved 46 52 94 192 Source: Huang et al. (2001b).
• Among 20 cases approved for field trials in 1999, nine cases were those applied for environmental release, but approved for additional field trials only.

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Table 23 – Number of cases of approved for field trials in China.
1997 1998 1999 (July) Total Rice Resistant to insects 1 3 9 13 Resistant to diseases 1 3 4 Resistant to salt 0 2 0 2 Others 0 1 1 2 Wheat Resistant to herbicide and quality improvement
1 0 0 1
Maize Resistant to insects 1 1 0 2 Cotton Resistant to insects 0 1 4 5 Resistant to diseases 0 3 1 4 Others 0 0 1 1 Tomato Resistant to diseases 0 1 0 1 Cold-tolerance 0 2 0 2 Tobacco Resistant to insects 0 1 0 1 Resistant to diseases 0 1 0 1 Papaya Resistant to diseases 1 0 0 1 Peanut Resistant to diseases 0 1 0 1 Melon Resistant to diseases 0 1 0 1 Cabbage Resistant to diseases 0 1 0 1 Pogostemun Resistant to diseases 1 0 0 1 Total 5 19 20 44 Source: Huang et al. (2001b).





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Table 24 – Number of cases of approved for environmental release in China, 1997-July
1999.
1997 1998 1999 (July) Total Rice Resistant to insects 0 1 1 2 Resistant to diseases 4 1 1 6 Resistant to herbicide 1 1 0 2 Maize Resistant to insects 1 0 3 4 Soybean Resistant to herbicide 1 0 0 1 Cotton Resistant to insects 6 2 6 14 Potato Resistant to diseases 4 1 1 6 Quality Improvement 2 0 0 2 Tomato Resistant to diseases 1 0 0 1 Ripe-delayed (long shelf) 2 1 3 Cold-tolerance 0 0 1 1 Tobacco Resistant to insects 2 1 0 3 Resistant to diseases 2 0 0 2 Sweet pepper Resistant to diseases 2 0 0 2 Poplar tree Resistant to diseases 1 0 1 2 Total 29 8 14 51 Source: Huang et al. (2001b).

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Table 25 – Number of cases approved for commercialization in China, 1997-July 1999.
1997 1998 1999 (July) Total Cotton Resistant to insects 2 0 14 16 Tomato Resistant to diseases 0 1 3 4 Ripe-delayed (long shelf) 1 0 0 1 Sweet pepper Resistant to diseases 0 1 3 4 Petunia Flower-color-altered 1 0 0 1 Total 4 2 20 26 Source: Huang et al. (2001b).


Figure 5 – Total factor productivity in agriculture in China.
0
20
40
60
80
100
120
140
160
180
200
19 52
19 55
19 58
19 61
19 64
19 67
19 70
19 73
19 76
19 79
19 82
19 85
19 88
19 91
19 94
Source: Lin (1998)
(1952=100)


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Figure 6 – Organization chart for agricultural biotechnology research
At National Level
National Government
State Council
Ministry of Agriculture
Ministry of Science and Technology
State Development Planning Commission
Chinese Academy of Sciences
State Forestry Bureau
Other Ministries
Academies Departments
and Key Labs
Ministry of Education
Chinese Academy of Forestry
7 Research Institues & 4 National Key Labs with
Agri Biotech Program
Several Universities & 7 National Key Labs with
Agri Biotech Program
Several Biotech Programs in Chemical
and Others
Some Research institutes and 1 National Key Lab
with Biotech Program
Some Research institutes and 1 National Key Lab
with Biotech Program
Department of S&T and Education
Chinese Academy of Agri. Sciences
Chinese Academy of Fishery
Chinese Academy of Tropical Agri.
12 Research institutes and 2 National Key Labs
with Biotech Program

Source: Huang et al. (2001a)

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Figure 6 (continued) – Organization chart for agricultural biotechnology research
At Local Level

Source: Huang et al. (2001a)
Provincial Government
Development and Planning Commission
Science and Technology Commission
Academy of Agricultural Sciences
Other Bureaus
1-2 Biotech Res Ins or Labs
1-2 Universities with Biotech Program
Small Biotech Programs in Chemicals, Forest,
Aquatic and others
Education Commission

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Figure 7 - Administrative Chart of biotechnology programs. Source: Huang et al. (2001a).

Ministriy of Sciences and Technlogy
Development of Rural Social Development
Biotechnology Division
Development Infrastructure
Base Construction Division
National Center for Biotechnology
Engineering Development
Biosafety Management Division
Center for Rural Development of China
State Development and Planning Commission
Development of High - Technology
Agriculture Division
Industry Division
Ministry of Agriculture
Planning Division
Office of Chinese Agricultural S & T
Education Foundation
Science Technology Development Center
GM Plant Group
Microorganism for Plant Group
GM Aquatic Animal and Plant Group
GM Animal & Veterinary Microorg. Group
Development of S&T and Education
Office of Biosafety Administration
Biosafety Committee

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Figure 8 – Flow chart of agricultural biotechnology R&D funds.
Source: Huang et al. (2001a) Requests for R&D funding and return flow of funds Flow of funds CASEF China Agricultural Sciences and Education Foundation HTIP High-tech Industrialization Program KSEP Key Scientific Engineering Program NSFC Natural Science Foundation of China NSFP Natural Science Foundation of Province PAAS Provincial Academy of Agricultural Sciences PBoF Provincial Bureau of Financial SFTP Special Foundation of Transgenic Plants Key Project: Stopped in 1998

Company H TIP
K SFC SDPC
M O F
M O ST
M O A
S& T Commission
PSTF
NSFP
K ey Project
CASEF Committee
SFTP
863 Plan
973 Plan
NSFC Committee
CAAS CATA CAFi
CAS
Univer- sities
PAAS & Inst.
NK Ls
PB oF


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Figure 9 – Map of Chinese Provinces.
Souce: www.chinapage.com/map/map.html


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Figure 10 – Authority System of Biosafety Administration on Agricultural Biological Genetic Engineering

Ministy of Science and Technology
Ministry of Agriculture General Department of Customs
Ministry of Public Health
State Bureau of Pharmaceutical
Mornitoring
State Environmental Protection Agency
Department of Science & Technology
and Education
Center for Science & Technology
Development
Safety Committee on Agricultural Bio-genetic
Engineering
GM Animal and Veterinary
Microorganism Group
Microorganism for Plant
Group
GM Plant Group
Administration Office of Safety on Agricultural
Bio-genetic Engineering
GM Aquatic Animal and
Plant Group
Division of Science and Technology
Planning

Source: Huang et al. (2001a)