In years past, China’s subsidy of choice was a stockpiling program that helped manipulate domestic prices—not just in sugar but for other crops like cotton, too.
Reforms appear to be forthcoming.
No, not reforms like the U.S. sugar industry is promoting (the end of all global sugar subsidies in favor of a free market). China instead is reportedly canceling its sugar stockpiling program and replacing it with direct subsidies to sugar producers.
Combine these subsidy checks with the import tariffs already in place and the Chinese sugar industry has a pretty sweet deal. Of course, it’s hard to fault China since they are just keeping up with other bad actors around the globe.
The world’s biggest sugar producers—Brazil, India, and Thailand—all hand out big subsidies and have made it a point to increase their programs in recent years.
When China finds it hard to compete, you know the market is grossly distorted. All the more reason to embrace a global zero-for-zero sugar policy and let businesses duke it out on the basis of efficiency instead of government support.
Source: www.sugaralliance.org