| Summary/Abstract |
This article studies Chinese central government policies in relation to food market building and food security between 1979 and 2008. It investigates major changes in the state's grain purchase pricing, urban subsidized food sales and the state monopoly over rural-to-urban food circulation that were effected in an attempt to ensure both food availability and accessibility under fiscal constraint. By observing the gradual transition from state monopoly to the market, this article traces the mechanisms which enabled the Chinese government to both establish a monopsony by generating artificial price signals for farmers to generate food output, and act as a monopolistic seller by providing subsidized low-priced food to urban consumers in order to fulfil its goal of low-cost industrialization. Thus, China's food security largely hinged on the government's budget to subsidize the price gap. The Chinese government juggled between food security and fiscal affordability to formulate a food budget that would neither excessively impact food security nor cause a crisis to government finance. China's food security puzzle was eventually worked out in the mid-2000s with the boosting of national income, which enhanced the population's access to food and eased the central government's food security concerns.
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