In China, production of the primary industry (agriculture, forestry, fishery) has been reduced from 39.4% in 1963 to 10.1% in 2012. Production in agriculture, forestry and fishery in 1985 is lower than that of the tertiary industry since announcing the reform and opening policy other than the planned economy period to be an industry of which the production share is the lowest. Since the reform and opening policy, the gap in economic growth and agricultural growth between regions of China is further widened, and each region has experienced different changes in the industrial structure.

The agricultural production structure of China shows the tendency that the portion of cultivation is reduced, and the portion of livestock farming is increasing. The cropping structure in cultivation is changing to labor-intensive type. The cropping system for food crops is mainly for rice, wheat and corn, in which the share of rice, wheat and other grains is reduced, and the share of corn is increasing.

The demand for and supply of agricultural and livestock products in China shows the tendency that production of food crops has been reduced consecutively for 5 years since 1999, but both the cultivation area and the volume of production of food crops tend to increase since 2004. Both urban areas and rural districts show the tendency that consumption of the food of which the income elasticity is not great is decreased because of people’s increasing income resulting from fast growing Chinese economy since the reform and opening policy. Horticultural crops shows the tendency of increase in terms of both the cultivation area and the volume of production. The cropping structure of fruits is being diversified. Consumption of horticultural crops is decreasing for vegetables, but continues to increase for fruits. The volume of production and consumption of livestock products tends to increase.

China aims to increase production, distribution and consumption of agricultural and livestock products by means of the diversified policies for distributing agricultural and livestock products, and is promoting the strategy of developing industrialized agriculture by integrating the process of production, processing and distribution.

The current distribution structure of agricultural and livestock products of China has various structure for each item. The local distribution system in China has been diversified fast in terms of the distribution system for agricultural products to introduce a great variety of management methods and to form a multi-dimensional distribution system since late 1990s. Since 1992, development of communication and transportation, and improved road conditions, in particular, the increased number of markets for agricultural products contribute to expansion of major production sites of agricultural products from areas in near vicinity of large urban areas to those far from urban areas. For wholesale distribution in markets for end consumers, the production sites for vegetables have been expanded from conventional areas in near vicinity of large cities to major production sites remotely located under the system of free production, sales and distribution by individual small-scale farmers since 1992. This contributes to vitalizing local markets in the remote production sites and establishing a smooth supply system to large cities. In large cities, fruits and vegetables are supplied generally by central wholesale markets, free markets (jimaoshichang), and large chaoshi (large-scale supermarket by large-scale distributors). The increasing number of modernized facilities for wholesale markets and shops contributes to the increasing volume of agricultural products and food handled by large wholesale markets and large-scale supermarkets by large-scale distributors.

However, while too many markets result in inappropriately positioned markets, markets vulnerable to competition successively experience loss in management profits. Because the system for governing the entire wholesale markets across China is not ideal, the operation system or the fee system for each wholesale market is very different to result in very poor standards for marketers and buyers.

China is promoting trading in agricultural and livestock products through various policies for supporting export, and attempts to diversify countries for export. It is predicted that this effort of China triggers more intensive competition for expanding market shares in the major export markets in the future.

It is necessary that Korea examines the special aspect of Chinese economy and society to predict changing agriculture of China, and is prepared for the probability of further competition. It is necessary to develop a scheme for reducing the gap of agricultural competitiveness between Korea and China at the time when Chinese agriculture is converted to a high-cost structure. While the distribution system for agricultural products of China is currently converted fast to a modernized and advanced distribution system, it is predicted that it will take a long time for conversion to a nationwide highly-efficient and low-cost distribution system. It is necessary to use the period of gap with Korea as a preparation period for differentiation from agricultural products of China.