The surplus however does not change the fact that the country's agriculture is facing severe challenges following China's accession to the World Trade organisation (WTO), with agricultural trade increasingly upset by technical barriers, experts said.

"Due partly to efforts to explore the international market and expand vegetable and fruit trading, China exported US$8.06 billion in agricultural products in the first half of this year, a year-on-year rise of US$500 million," said Tang Yanli at the ministry's information centre.

Import volume stood at US$5.07 billion, down 8.5 per cent or US$470 million from the first half of 2001, resulting in a trade surplus of US$2.99 billion, centre statistics indicated.

But half a year's figures do not tell a whole story of China's agriculture trade in the context of the WTO, said Cheng Guoqiang, a senior professor with the Development Research Centre of the State Council, a key think tank of the government.

"When looking at tariff rate quotas and a number of orders placed in the first half of this year to be delivered in the second, as well as the immense subsidies in agriculture in some foreign countries ... China's imports are going to rise, and so will pressure on the domestic market and farmers," he said.

WTO entry profoundly reshaped agriculture sector
Cheng, who was involved in China's WTO accession negotiations, said China's entry into the WTO, even in its first eight months beginning last December, has profoundly reshaped China's agriculture sector.

Top agricultural authorities as well as individual farmers are now affected.

The government has modified scores of agricultural rules and regulations to implement WTO commitments and to regulate itself in accordance with WTO rules. Some changes have been made at the cost of sacrificing the country's interests, he added without specifying what they were.

Due to the tariff rate quotas, China reportedly imported 300,000 tons of edible oil in July alone, apparently dealing a heavy blow to domestic oil producers, according to Cheng.

Meanwhile, unprecedented technical barriers imposed on Chinese agricultural products by European Union (EU), Japan, the United States and some other countries have also hurt the interests of Chinese farmers.

The EU suspended imports of products of animal origin from China in late January, asserting that potentially risky chloramphenicol residues were found in imports.

As a result, exports of China's aquatic products to the EU plummeted by 73 per cent or US$160 million in the first six months of 2002 compared with the same period last year, latest statistics from the Ministry of Agriculture showed.

Exports of animal products to the EU also dropped by 8.5 per cent, statistics showed.

The sluggish world economic growth has also fuelled trade protectionism in some countries, which have increasingly used food safety issues as an excuse to impede Chinese agricultural products from entering their markets, said an official with the Ministry of Foreign Trade and Economic Co-operation, who refused to be identified.

Cheng concluded that no one should underestimate the impact of WTO membership on the country, especially its increasing pressure on agricultural trade.

"If subsidised foreign agricultural products flow to the Chinese market at a lower price, it will be even harder for Chinese farmers to sell their products and even harder for them to increase their income," Cheng said. "This is a problem of paramount concern."