The outbreak of the Russia-Ukraine conflict in 2022 has triggered a powerful “butterfly effect” in the international grain market, with a succession of countries raising barriers to grain exports and international grain prices surging, which has also exacerbated the structural shortage of China’s domestic grain supply. Although China’s total domestic grain production is steadily increasing, the supply of key grain crops such as soybeans and corn is limited domestically and depends increasingly on imports. This is currently the biggest, structural problem facing China’s food security and the fundamental reason that international market fluctuations still pose a risk to China’s food security. Amid the global food security storm caused by this geopolitical conflict, China—as an important destination of Russian and Ukrainian grain exports and the world’s largest grain importer—faces the risks of a contraction in total grain imports and soaring prices of imported grain.

To date, there has been relatively limited scholarship that specifically explores the impact of the Russia-Ukraine conflict on China’s food security.¹ Existing research either focuses on analyzing how changes in global grain flows have adversely affected food security,² or considers the Russia-Ukraine conflict as an unexpected event in the process of economic globalization and analyzes the direct economic losses it has caused to China’s grain imports.³ Such studies allow an in-depth understanding of the roles played by Russia and Ukraine in the global grain market, but they are still limited to factual descriptions of a particular case without delving into the mechanism that has continuously amplified the negative impact of the Russia-Ukraine conflict on the global grain market or offering a theoretical explanation of how geopolitics may interfere with the global grain market.

Accordingly, this article introduces the “butterfly effect” as an analytical perspective and applies it to a case study of the consequences of the Russia-Ukraine conflict for China’s food security, so as to explore how repercussions of geopolitical conflicts between countries are increasingly amplified in the global grain market, embroil major market players such as China, and lead eventually to a systemic food security crisis. This article argues that geopolitical disruption to critical points in the grain market has set off a chain reaction that has interrupted the normal operation of the international grain trade and grain pricing, triggering a systemic food security crisis.

1. Butterfly Effect: How Geopolitical Conflicts Affect Global Food Security

The butterfly-effect perspective pays particular attention to how small and specific changes in individual actors in a system come to produce systemic effects and emphasizes the interconnectedness of actors’ actions in the course of development. It complements existing scholarship on food security risks associated with the Russia-Ukraine conflict and provides a new analytical framework for studying the changing situation of global food security.

1.1 The meaning and triggering conditions of the butterfly effect

The idea of the “butterfly effect” originated from research in physics and meteorology, which would lay the foundation for the study of complexity in the interaction between actors. In 1963, mathematician and meteorologist Edward Lorenz proposed that even tiny initial changes in a system could result in disproportionate, system-wide impacts.⁴ To make his heavily formula-based theory more comprehensible, Lorenz encapsulated it in a metaphor: the flap of a butterfly’s wings in Brazil could set off a tornado in Texas—hence the name “butterfly effect.”⁵ This concept challenged the traditional mechanistic worldview centered on linear thinking in modern science, subverted the prevailing reductionist approach, and laid the foundation for complexity science.⁶

Since the end of the twentieth century, more and more scholars have applied the concept of complexity to the study of the world economy and international politics, improving the “butterfly effect” as an analytical framework. James N. Rosenau was the first to use the theory of “cascading interdependence” to explain how interconnections cause the spread of tensions in a system.⁷ Robert Jervis summarized the outcomes of interactions between actors as “system effects”⁸ and pointed out that local changes could have disproportionate impacts. However, his examination and application of system effects did not go beyond defining concepts and he did not formulate a framework for analyzing system effects.⁹ Filling in this gap, Thomas Oatley has articulated an analytical framework of “complex interdependence” and focused particularly on dynamic changes within actors and how they affect the system itself, noting that a system’s complexity derives from its ability to “generate unpredictable events,”¹⁰ which is highly compatible with the internal logic of the “butterfly effect” and which helps to provide further insight into its workings.

These existing works have served to refine the trigger mechanism of the “butterfly effect” and give it strong explanatory power in analyzing various potential and uncontrollable risks faced by countries. According to the initial definition of the “butterfly effect,” contingent events in the international system will bring about systemic consequences through the combined agency of the following two trigger conditions. First, the actors are highly sensitive to change; that is, they pay a high price for fluctuations in the system. Provided that they do not seek to leave the system, in order to avoid paying an unnecessary price, the actors will not only take immediate action in response to change, but will do so regardless of the degree of change, responding to even minute changes.¹¹Matthew J. Hoffmann and John Riley, “The Science of Political Science: Linearity or Complexity in Designing Social Inquiry,” New Political Science 24, no. 2 (2002): 312. Notably, initial conditions, which potentially have system-wide effects, are not random, and thus in conducting research it is necessary to identify them and determine whether they are at “critical points” in the system.¹² Second, the actors’ actions in response to change are interconnected; in other words, “a factor’s effect on a social system depends upon the state of other factors.”¹³ Positive feedback magnifies the effect:¹⁴ a change in an actor within the system sets off other changes in the same direction, leading to drastic alterations in the system and its elements.¹⁵

Due to the actors’ sensitivity to change and their interconnectedness, changes in initial conditions will set in motion a chain reaction in the system. Sensitivity prompts the various actors to respond to the initial changes, and interconnections between them mean that adjustments in parts of the system will be continuously magnified through positive feedback, which produces an end result where “the whole is greater than the sum of its parts.” What underlies this process is nonlinearity, a key concept in the study of “complexity”.

Overall, the global grain market highly satisfies the trigger conditions for the “butterfly effect” as it is characterized by interdependence and as grain itself is a product essential to security. Therefore, fluctuations in certain countries’ shares of grain exports are likely to bring about drastic consequences in the global grain market. First, the growing international grain trade has bound the grain supply of various countries into a framework of mutual dependence, with more countries supplementing or even replacing domestic grain production through the international market, and the grain trade has become a main source of grain supply. As the export of grain is relatively concentrated in a few countries,¹⁶ and as financial speculation has increasingly interfered with the international grain trade, fluctuations in the global grain trade have increasingly deviated from the law of supply and demand, and grain supply on the global market has thus become highly uncontrollable. Grain, moreover, is essential to national security, and so governments are highly sensitive to fluctuations in grain supply. Domestically, food is the cornerstone of political stability. Formulating social and economic policies to ensure access to sufficient food resources for all citizens is one of the government’s core obligations.¹⁷ Internationally, food is a strategic asset and a tool for improving foreign relations or for undermining political rivals. It has “quickly become the hidden driver of world politics.”¹⁸ It is precisely because food is a matter of security that grain shortage and the ensuing surge in grain prices often reverberate beyond the grain trade sector¹⁹ and lead to more serious consequences such as mass riots, social unrest, and even regime change.²⁰ Therefore, when facing changes—especially negative ones—in the international grain market, governments will take active measures to protect their domestic food security from external threats.

1.2  How the “butterfly effect” of the Russia-Ukraine conflict on the global grain market has developed

The “butterfly effect” triggered by the Russia-Ukraine conflict has not only directly endangered food security in the destinations of Russian and Ukrainian exports, but also created varying degrees of food security risks for countries around the world. The condition that has enabled this “butterfly effect” to develop is that Russia and Ukraine are critical points in the global grain market, and the development has unfolded as a worldwide chain reaction set off by changes in the scale of their exports. The geopolitical conflict, that is, has disrupted the flows of the global grain trade and precipitated significant fluctuations in international grain prices, thereby triggering a storm in the global grain trade.

(1) Critical points in the market: Russia and Ukraine as initial conditions for the butterfly effect

Russia and Ukraine have become critical points in the global grain market not only on the strength of their considerable grain exports and their export destinations’ high sensitivity to the stability of grain supply, but also on account of their indirect control over global grain production and grain trade flows—two areas crucial to food security.

First, Russia and Ukraine account for a huge share of global grain exports. In 2021, the two countries produced 19 percent, 14.3 percent, and 4.6 percent of the world’s barley, wheat, and corn, respectively, and accounted for more than 20 percent of the global exports of these cereals, with 32.5 percent of the world’s barley exports, 30.6 percent of wheat exports, and 19.7 percent of corn exports coming from Russia and Ukraine.²¹ Since the two countries occupy important positions in the relatively concentrated global grain export market, the geopolitical conflict between them has directly and severely disrupted the operation of the global grain market.

Second, the grain exports of Russia and Ukraine are irreplaceable for their destination countries. A large amount of Russian and Ukrainian grain is exported to the Middle East—the “powder keg” of global geopolitics. Many countries there, including Egypt, Lebanon, and Yemen, import over 90 percent of their wheat from Russia and Ukraine,²² and the political stability of those countries hinges on the stability of food imports. Russia and Ukraine, furthermore, maintain close food trade ties with major countries that dominate global geopolitics. Ukraine—the “granary of Europe”—is European countries’ main source of food imports and has pursued food cooperation with China through the Belt and Road Initiative. Russia regards food trade as a strategic asset in its diplomacy and actively cultivates agricultural economic cooperation in the Far East region.

In addition, it is important to note that Russia and Ukraine are “node countries” in grain production and grain flows respectively, with the former controlling the trade in intermediate goods in the production of grain and the latter a key route of global grain flows. Russia is the world’s largest exporter of fertilizers, and countries in Latin America, Eastern Europe, and Central Asia import more than 30 percent of their fertilizers from Russia, which has further enhanced its position in the global grain market. The Black Sea ports controlled by Ukraine are one of the arteries for global grain transportation.²³ Over one-fifth of the world’s wheat trade and one-sixth of the corn trade pass through the Black Sea, which illustrates the indispensable role of Ukrainian ports in the global grain market. ²⁴

In short, the scale and the destinations of grain exports from Russia and Ukraine have made the two countries critical points in the global grain market, and their roles as nodes in the global grain industry have consolidated their prominent market positions. As a result, repercussions of the Russia-Ukraine geopolitical conflict have been spreading across the globe, and countries all over the world have had to weather the food security storm caused by this butterfly effect.

(2) Chain reaction: The impact of the Russia-Ukraine conflict on the global grain market

The geopolitical conflict has disrupted the export of grain from Russia and Ukraine—a flap of the wings in the global grain market that has set off a food security storm. In Ukraine’s case, shelling on its major grain-producing areas and transshipment ports has largely brought grain production and export to a halt, with its main grain-producing areas having become a war zone and its export capacity in the Black Sea crippled by the conflict, both of which pose direct and unpredictable risks for Western grain imports and even for the global grain market. In Russia’s case, in the face of unprecedented economic sanctions by the West, it took the initiative to launch a counterattack in the food trade sector, not only announcing that it would no longer export grain to “unfriendly countries” and the Eurasian Economic Union,²⁵ but also limiting the currencies of payment to rubles and trade partners’ national currencies only, so as to accelerate Russia’s dedollarization.²⁶ Fertilizer exports, too, have been suspended as Russia expanded its toolbox of countersanction measures by weaponizing food.²⁷ Russia’s weaponization of food—with its grain exports to Western countries cut off—has further intensified the antagonism between Russia and the West.

Moreover, the contraction of Russian and Ukrainian grain exports prompted other countries to erect barriers to the food trade, which has exacerbated the surge in international food prices and amplified the impact of insufficient Russian and Ukrainian grain exports, so much so that a global food security crisis looms large. First of all, as supplies from Russia and Ukraine decreased, more and more countries erected barriers to the export of foodstuffs on the grounds of protecting the stability of domestic supply, which in turn made the global food supply shortage a self-fulfilling prophecy. Since the start of the Russia-Ukraine conflict, nearly 20 countries have imposed various food export restrictions, and the exports affected by the restrictions account for over 17 percent of the global food trade.²⁸ More than two-thirds of such restrictions target cereals such as wheat, rye, and barley.²⁹ Subsequently, the global food market descended into chaos, catalyzing the surge in global food prices. As a bellwether for global food prices, the Chicago Mercantile Exchange repeatedly warned of abnormal fluctuations in global grain prices. Trading prices of futures contracts for wheat, soybeans, and corn soared to new highs after the outbreak of the Russia-Ukraine conflict, breaking the records set during the “super cycle” in the spring of 2008.³⁰ Despite a fall after a bumper grain harvest in the southern hemisphere and the Black Sea Grain Initiative signed by Russia and Ukraine in July 2022, global grain prices remain at a high level in general.

In summary, the reduction in grain exports from Russia and Ukraine following the outbreak of the conflict has set in motion a “butterfly effect.” The “beggar-thy-neighbor” trade protection measures taken by various countries and the consequent futures speculation have amplified each other, spreading the negative consequences of the geopolitical conflict and causing varying degrees of harm to grain supply and price stability in countries around the world. Major grain-importing countries, including China, are vulnerable to this food security storm. China’s food security has deteriorated as risks arising from changes in Russian and Ukrainian supplies are compounded by the repercussions of fluctuations in the global grain market.

2. Critical Points in the Market: Why the Russia-Ukraine Conflict’s “Butterfly Effect” Has Threatened China’s Food Security

Russia and Ukraine are critical points in the global grain market not only by virtue of their substantial volume of trade, but also because they play an indispensable role in the market for the destination countries of their exports. China, for example, has seen Russia and Ukraine as important options for diversifying its sources of grain imports. Both countries have established close grain trade ties with China, with their exports to China having increased significantly. They are becoming China’s main sources of grain imports and their importance to its food security is growing ever more prominent.

2.1 Ukraine: A hub country that supplements China’s grain supply

Well endowed with natural resources, Ukraine has long been a major agricultural producing and exporting country. Geographically, it has convenient access to the Black Sea and connects Europe and Asia, which make it a node of global grain flows. It has become China’s key source of grain imports and a hub country that allows China to supplement its domestic supply through the global market.

Boasting a mild climate and over 40 percent of the world’s fertile black soil, Ukraine has done well in agricultural production and trade.³¹ After the Crimean crisis in 2014, it was an important goal of Ukraine’s foreign economic policy to compensate for the economic losses resulting from its deteriorating relations with Russia and find new geoeconomic partners. To this end, Ukraine needed to open up new international markets and diversify its trade partners. As long-term political instability, social unrest, and regional conflicts plagued Ukraine’s economic development,³² its economic growth mainly relied on the export of grain and other commodities in the production of which it could take advantage of its resource endowments.³³ In this context, Ukraine became China’s best option for expanding its sources of grain imports and developing foreign sources of grain.

Ukraine has since developed into a source of grain supply that plays a crucial role in China’s food security, becoming China’s preferred choice for corn imports and a main source of wheat, barley, and other cereals as well. After China significantly opened up to Ukrainian corn in 2012,³⁴ Ukraine’s corn exports to China grew several times over, and for a time it supplanted the United States as China’s largest source of corn imports. Ukraine’s exports of other cereals to China were on the rise, too. It accounted for over a quarter of China’s barley imports, of which it was the largest source,³⁵ and it was also an important source of beer and starch imports, with the volume of trade having doubled annually over the past eight years.

Ukraine, furthermore, has featured in China’s plan for the overseas expansion of its grain industry. Ukraine’s superior resource endowments and geographical advantage made it a top country for China’s “Agriculture Going Global” policy, which further deepened China’s dependence on Ukraine in the grain trade. With the support of the Belt and Road Initiative, Chinese food and agricultural companies, especially COFCO, took the lead on three fronts—grain trading, logistics and transportation, and storage construction. First, COFCO became one of the biggest agricultural exporters in Ukraine by acquiring all Ukrainian assets of the European agricultural trader Noble Group. Second, COFCO invested in the construction of a grain shipping terminal in Ukraine that has become one of the key points of transshipment of agricultural goods in Eastern Europe. Third, COFCO owns four large grain silos along the Dnieper River.³⁶ China’s agricultural investments in Ukraine have covered the full production chain, from production, processing, and warehousing to packaging, logistics, and trading.³⁷

Ukraine, therefore, is key to China’s food security, to which its strategic significance is illustrated by the import volume of Ukrainian corn—a critical cereal for China—and by its broad integration into China’s grain production chain. Its importance to China’s food security increased as closer links were forged between the development of its grain industry and China’s Belt and Road Initiative.

2.2 Russia: A foreign source of grain that safeguards food security

Russia is an emerging food-exporting powerhouse with both agricultural development potential and strong policy support. Its political and economic aspirations, moreover, align with those of China, and it actively participates in China’s plan for the overseas expansion of grain industry. Therefore, although the scale of Russia’s grain trade with China is unremarkable today, it is strategically valuable for safeguarding China’s food security as a foreign source of grain where China can promote the production of key grains.

Russia’s arable land is vast, flat, and fertile,³⁸ ideal for agricultural development. In a period when oil prices were high, foreign exchange reserves were abundant, and the national coffers were full, however, the comparative advantages of Russia’s agricultural resources lay underappreciated, and therefore agriculture had long been a weak point in Russia’s industrial planning. After the Crimean crisis, Russia was hit with economic sanctions by Western countries. In response, Russia has gradually adjusted the direction of its economy, and agriculture has become a new focal point in its economic development.³⁹ Against this backdrop, the strategic value of grain cooperation between Russia and China has steadily grown, with Russia becoming China’s preferred partner for developing foreign grain supplies.

Specifically, Russia is China’s preferred overseas location for expanding the production of key grains. A prime example is the promotion of soybean production in Russia’s Far East region, which illustrates how the two countries have increased the alignment of their interests in common areas related to economic security, and that Russia has become a foreign source of grain that allows China to shield its food supply from fluctuations on the international market. The Far East region is the frontier of Russia’s eastward expansion of its strategic space, and its level of development to a large extent directly determines the depth and breadth of Russia’s integration into the Asia-Pacific region.⁴⁰ Soybeans, meanwhile, are central to China’s food security, over which they hang like the “sword of Damocles” due to China’s low self-sufficiency rate and the predominance of U.S. and Brazilian soybeans in its imports.⁴¹ The Far East region has thus become a focus of Sino-Russian agricultural cooperation: China actively promotes the development of the soybean industry there, which it tries to use as a stepping stone to further agricultural cooperation deeper into the Russian hinterland.⁴² Back in 2011, China identified the Far East region as a priority area for Chinese agricultural investment and explicitly proposed that China and Russia jointly build a series of grain complexes and strive to produce high value-added products, develop logistics facilities for produce, and apply innovative agricultural technologies.⁴³

Accordingly, China and Russia have gradually liberalized agricultural trade and investment between them and built common interests in the grain sector. After 2015, restrictions on grain trade between the two countries were gradually lifted,⁴⁴ which opened up the Chinese market to Russian grain exports, and Russian wheat exports to China increased year after year. As for investment, China has provided opportunities for agricultural companies to invest in Russia to boost the development and upgrading of the Russian grain industry. In 2016, the Russian-Chinese Fund for Agro-Industrial Development was established with the support of both countries’ governments to invest in Russian grain production and processing companies, with an initial capital totaling 13 billion rubles, of which 90 percent was provided by Chinese investors and 10 percent by Russian investors.⁴⁵ The establishment of this cooperation mechanism has aroused the enthusiasm of Chinese agricultural companies to invest in Russia. Today, China’s stock of investment in Russia’s agriculture is second only to that in its mining industry, accounting for 23 percent of China’s total direct investment in Russia.⁴⁶ The above measures have consolidated Russia’s central position in China’s overseas expansion in the grain industry and laid the groundwork for it to become a foreign source of grain that safeguards China’s food security.

Since China reduced its soybean imports from the United States after the latter initiated a tariff war, Sino-Russian agricultural cooperation in the Far East region has focused increasingly on the soybean industry, which has further highlighted Russia’s importance to China’s food security. In June 2019, China and Russia signed a bilateral agreement on expanding the soybean trade and deepening cooperation throughout the entire production chain—the door opening wider for the import of soybeans from Russia. Since then, almost all Russian soybean exports have headed for the Chinese market. Russia is becoming a more integral part of China’s planning for the soybean industry and a potential key country in ensuring the stability of China’s soybean supply. Overall, although Russia’s grain trade with China is still relatively small, Russia is a key part of China’s strategy for diversifying its grain supply, and grain cooperation between the two countries is likely to deepen further in the future.

To sum up, as critical points in global grain exports, Ukraine and Russia have played an important role in China’s efforts to ensure its food security. Consequently, the “butterfly effect” of the geopolitical conflict between Russia and Ukraine has inevitably spread to China, and the chain reaction it set off has had systemic implications for China’s food security, upsetting the already tight equilibrium⁴⁷ of food supply and demand in China and undermining China’s global strategy for safeguarding its food security.

3. Chain Reaction: How the Russia-Ukraine Conflict Has Impacted China’s Food Security

As the world’s largest grain importer, China has already been drawn into the global food security storm triggered by the Russia-Ukraine conflict, which has directly disrupted its import of grain. The “butterfly effect” arising from this geopolitical conflict has caused huge economic losses to China as it copes with supply shortages in the global grain market and soaring grain prices. Laying bare the food security risk that China’s grain imports are concentrated in only a few commodities and come from too few sources, the conflict has further exacerbated China’s vulnerability to changes in the global grain market. Long-term efforts are needed to offset the conflict’s negative impacts.

3.1  A flap of the wings: Direct impacts of the Russia-Ukraine conflict on China’s food security

As China imports grain from both Russia and Ukraine, the conflict’s “butterfly effect” has had multiple impacts on China’s food imports. Apart from supply issues such as routes for Ukrainian corn imports having been cut off, China faces the parallel crises of shrinking total grain imports and surging import prices. Such circumstances have allowed fluctuations in international grain prices to destabilize domestic grain prices.

First, the conflict has interrupted China’s import of Ukrainian corn, and the United States has replaced Ukraine as China’s largest source of corn imports. Corn makes up most of the grains that China imports from Ukraine. As the conflict has obstructed corn exports, China has imported less corn from Ukraine and more from the United States, and its dependence on U.S. corn imports has thus further increased. Ukraine remained China’s largest source of corn imports in the first quarter, since Ukrainian exports had already been shipped to China before the war broke out and arrived in March. After the conflict started, however, China’s corn imports from Ukraine were blocked, and it became more dependent on U.S. corn, with total imports from the United States quickly surpassing those from Ukraine and, in 2022, reaching the highest level since 2013.⁴⁸ The geopolitical conflict has crippled the channels for importing Ukrainian corn that China developed and dealt a blow to its efforts to diversify its sources of grain imports, as evidenced by its increased dependence on U.S. corn imports, which has further deepened its vulnerability in a cereal key to national food security.

Moreover, as various countries have imposed increasingly strict export restrictions, which have hindered the normal global flows of grain, China is faced with the twofold problems of declining grain imports and soaring import prices. As the world’s largest agricultural importer, China does not have a “large-country effect” in the global grain market.⁴⁹ It does not have much say in setting international grain prices, which has increased the economic cost of maintaining food security through grain imports with sellers holding sway over import prices. In 2022, China imported more than 130 million tons of grain—a decrease of 10.7 percent year-on-year, in spite of which China remained the world’s largest grain importer, with the value of imports totaling 549.99 billion RMB—a year-on-year increase of 13.7 percent. Changes in the import values of grains crucial to China’s food security—soybeans, corn, and wheat—did not correspond to changes in their quantities (see Table 1).

Table 1  China’s import volume of major grains in 2022 and year-on-year fluctuations (units: 10,000 tons/RMB 100 million)

More importantly, external risks have affected the normal operation of the domestic grain market, with domestic grain purchase prices having been pushed up overall, which has threatened the stability of domestic prices. This highlights the increasingly strong knock-on effect of changes in the international grain market on domestic grain prices. Grain prices are the most fundamental prices: fluctuations in grain prices not only have a direct impact on food security, but also affect the development of related industries, citizens’ quality of life, and social stability.⁵⁰ After the conflict broke out, shocks in the international grain market spread to the Chinese market and pushed domestic grain purchase prices to a high level. Corn was especially affected by geopolitics and its purchase price rose the most, approaching that of wheat—a substitute grain. Domestic price levels rose in the wake of rising grain prices. In 2022, China’s food consumer price index increased by 2.4 percent.

3.2  A brewing storm: Lasting consequences of the Russia-Ukraine conflict for China’s food security

The lasting consequences of the Russia-Ukraine conflict for China’s food security warrant greater attention than its limited direct impacts. Political relations are highly unstable between China and the countries from which it imports grains crucial to its food security such as corn and soybeans, which exposes food security to the tempest of geopolitical rivalry. As the Russia-Ukraine conflict has made clear, amid increasingly fierce great-power strategic competition, security considerations are becoming more and more prominent in international trade, and China’s food imports are further under the sway of a few countries with which it has unstable geopolitical relations, which makes it vulnerable to the global food security storm.

First, due to the Russia-Ukraine conflict, the degree to which the grain trade is entangled in geopolitics—along with the risk of the weaponization of the grain trade—has increased significantly, which poses serious food security risks to China. The conflict has deepened the economic and security misalignments between the United States and China, and China’s dependence on U.S. grain imports will put a great strain on its food security. After the conflict broke out, China imported more grain from the United States, which has become China’s most important import source for key grains such as corn and soybeans. For this reason, changes in political relations between the two countries and the resulting adjustments in economic and trade policies will inevitably undermine China’s food security.⁵¹ Meanwhile, although Russia’s grain exports to China will continue to grow after the conflict, its relatively limited capacity to export grain to China will complicate China’s efforts to safeguard food security. After the conflict started, China quickly opened its grain market to Russia, signaling close geopolitical relations between them. Due to differences in their industrial structures and economic models,⁵² however, China needs to make long-term investment in Russia’s agriculture to effectively enhance their agricultural cooperation.⁵³ In the short term, Russian grain exports are unlikely to replace supplies from China’s existing import sources, but closer grain trade ties between the two countries will make Western economic sanctions on China more likely—a situation that complicates China’s food security environment.

Second, the relatively open global grain trade is sliding towards restrictedness and the global grain market is becoming more closed, which has made it more difficult to mitigate risks and improve domestic food security through imports as the channels for doing so are disrupted. For a long time, the international community has repeatedly emphasized the positive relationship between the international grain trade and national food security, but this positive correlation hinges on the freedom of global grain flows.⁵⁴ If grain cannot flow freely throughout the world, the existing tension between large fluctuations in sources of grain imports and the low elasticity of demand in the grain market will become sharper. The Russia-Ukraine conflict has magnified the risks posed by the current global grain market to national food security and prompted a reexamination of the global grain trade pattern based on free trade. For China, food security is now closely linked to the global grain market, and in order to balance grain supply and demand, relying on imports and the international circulation to match supply to demand is unavoidable, which naturally results in the intertwinement of domestic and international grain circulation.⁵⁵ The gradual decline in the global grain trade will thus have an immeasurable negative impact on China’s food security.

Third, the conflict has revealed the insidious influence of international speculative capital on international grain prices, and China, which plays a passive role in international grain pricing, therefore faces unavoidable food security risks. As the abnormal changes in global grain prices following the conflict have shown, the futures market is gradually replacing the spot market in performing the price discovery function, and the profit-seeking nature of futures speculation has amplified the fluctuations in grain supply and demand during the crisis and inflated global grain prices in the wake of the Russia-Ukraine conflict. As China plays no part in speculative capital’s interference in international grain prices, it suffers severe economic consequences from their fluctuations, which have become a potential trigger for risks to China’s food security, especially since geopolitical interference has complicated the global grain market.

As a major grain importer, then, China is bearing the brunt of the intensifying “butterfly effect” in the global food market, which has brought sustained food security risks to China. This geopolitical conflict has further deepened the connection between geopolitical relations and food trade, strengthening the negotiating power held by grain-exporting countries in the increasingly concentrated grain trade and worsening the international environment for China’s import of grain. What is even more serious is that the conflict’s “butterfly effect” has not stopped yet, and food security risks continue to brew globally. As the world’s largest grain importer and a key player in global geopolitics, China has already been caught in the eye of the food security storm, and its grain imports will continue to be affected by the increasingly volatile international market.

4. Improving Resilience: How Can China Protect Its Food Security from the “Butterfly Effect”?

Faced with fluctuations in the global grain market, China—the most important grain-importing country—must “prepare for a rainy day” and improve its resilience in the market; that is, China must strengthen the capacity of its grain imports to quickly respond to and recover from contingencies, so as to prevent the repercussions of the “butterfly effect” from affecting its food security. Under the current circumstances, China’s growing grain imports have further aggravated food security risks arising from exposure to the open market, and the high concentration of import sources has, furthermore, tied China’s food security to countries with low geopolitical stability, such as Russia and Ukraine. When geopolitical turbulence occurs, therefore, pressure on China’s food security increases exponentially, and the food security risks transmitted by the international market are ultimately reflected in the high prices of imported grain. Generally speaking, improving grain supply and grain access is key to achieving food security.⁵⁶ Accordingly, to expand its policy options in response to changes in the international market, China should focus both on diversifying its sources of grain import and on developing innovative financial instruments.

4.1 Diversify import sources to weaken the irreplaceability of critical points in the market

Building on the gradual liberalization of the grain trade during the height of economic globalization, the global grain market has entered a period of relative prosperity and the trade of grain has multiplied, which has created favorable conditions for China to diversify its sources of grain imports. At the same time, many countries rich in agricultural resources still look to develop their capacity for agricultural production and export, with weaknesses in agricultural infrastructure and loopholes in industrial policies still restricting the upgrading of their agricultural sector. This provides potential opportunities for China to open up sources of grain imports. In diversifying its import sources, therefore, China needs not only to expand trade with existing major grain exporters, but also to actively tap into countries with the potential to supply grain to China.

First, it is necessary for China to proactively expand its trade with the world’s major grain-exporting countries and widen its choice of import sources. Among the countries that already have an advantage of scale in grain exports, only a few countries such as the United States and Brazil have developed close grain trade relationships with China, whereas the other countries’ grain exports to China are still very limited, and they are all promising alternative sources of China’s grain imports. In the corn trade, which has been directly affected by the Russia-Ukraine conflict, the United States, Argentina, Brazil, and Ukraine are the world’s top four exporters, and yet the exports of Argentina and Brazil to China in 2020 were almost negligible. Excluding the Chinese market, the global corn exports of Argentina and Brazil far exceed those of the United States and Ukraine (Figure 2). This shows that countries such as Argentina, Brazil, and Romania—already strong in the export of grain—have the capacity not only to fill in the gap in China’s grain imports, but potentially also to further enhance their dominant positions in the global grain market through closer grain ties with China.

Figure 2  Export destinations of major corn-exporting countries (unit: 10,000 tons)

China should, moreover, actively develop the grain industry in countries with resource endowments, so as to further safeguard China’s grain imports. In the international grain market, a large number of countries see their agricultural development hampered by insufficient national policy support and obvious weaknesses in agricultural infrastructure, which have prevented them from making the most of their advantages in factors of production. Developing countries in Central Asia, Africa, and Southeast Asia are all “overseas farmland” that awaits China’s cultivation, and through increased investment in their agriculture, they are likely to become potential sources of China’s grain imports. Many countries in sub-Saharan Africa, Eastern Europe, Southeast Asia, and Latin America have abundant arable land, possessing twice as much per capita arable land as China. Building on this, China can continue to develop countries along the “Belt and Road” in Southeast Asia and Central Asia, such as Thailand, Cambodia, and Kazakhstan, and further expand the grain industry in sub-Saharan Africa and Latin America as part of a long-term effort to diversify China’s sources of grain imports.

Policy support plays an indispensable role in measures to diversify sources of grain import and improve resilience. The government should therefore actively pursue food diplomacy and promote agricultural cooperation between China and relevant countries to ensure the efficient operation of the grain trade and neutralize geopolitical risks in agricultural investment. In bilateral consultations, China can prioritize the agricultural sector, including grain, in economic cooperation and further formalize economic and trade relations by improving free trade agreements and bilateral investment agreements. In multilateral dialogues, China can continue to use platforms such as the Forum on China-Africa Cooperation, the Shanghai Cooperation Organization’s dialogue mechanism, and the China-ASEAN cooperation mechanism to include expanding food cooperation and promoting agricultural development into the agenda, so as to create an inclusive cooperation platform for food security. In global governance, China should actively participate in making changes to mechanisms for global agricultural cooperation, such as WTO agricultural negotiations and the reform of the Committee on World Food Security, to ensure that China’s food security interests are reflected in the improvement of the global food trade rules and in global food security governance.

4.2  Develop innovative financial instruments to prevent chain reactions from affecting the stability of domestic grain prices

As has been the case with the potential global food crisis triggered by the Russia-Ukraine conflict, a key link in the “butterfly effect” that threatens a food crisis lies in surges in international grain prices catalyzed by chain reactions from fluctuations in global grain supply and demand. International financial capital’s speculation in the grain market is a main cause of the frequent fluctuations in global grain prices.⁵⁷ Given China’s underdeveloped financial market in agricultural commodities,⁵⁸ the small number of participants in domestic agricultural futures trading, the small amount of capital involved, and the even smaller number of people who hedge in the international futures market, the extent of China’s participation in the agricultural financial market hardly matches the volume of its grain imports, which further exacerbates its vulnerability to grain price fluctuations, thereby implying higher costs of import for China in the global grain trading market. As China’s grain imports via the global market continue to grow, it is important to also enhance China’s participation and initiative in the financial market in grain. To address the food security crisis, therefore, now it is necessary to develop innovative financial instruments to improve China’s unfavorable position in the face of fluctuations in global grain prices, mitigate the “butterfly effect” that destabilizes grain prices through the financial market, and enhance China’s initiative in global grain pricing.

Specifically, measures to develop innovative financial instruments to improve resilience mean that China needs to participate more in the global grain futures market to remedy the misalignment between the volume of its imports and its pricing power in the global grain market. First of all, China should actively participate in international agricultural futures trading and use the futures market to avoid risks. First, we should set up hedge funds and look for suitable buying opportunities in the international market to protect domestic supply from the risk of rising grain prices. Second, we should encourage large grain companies such as COFCO to directly participate in international agricultural commodity trading to enhance their initiative throughout the grain production chain. Third, we should encourage domestic financial institutions to increase financial trading in agricultural commodities and enhance the trading products of important grain derivatives. Moreover, China should develop domestic agricultural futures trading platforms to improve China’s unfavorable position in grain pricing. First, we should improve the trading mechanisms of the two major agricultural futures exchanges in Dalian and Zhengzhou to bring their rulemaking and risk-based regulation into line with international standards. Second, we should gradually loosen the restrictions on the trading products of domestic agricultural futures to let the market play a greater role in screening grain futures products. Finally, China should actively pursue international financial cooperation and work with partners to regulate speculation in the global grain market. First, we should actively participate in consultations on risk management and control in grain commodity futures trading held by international organizations such as the Food and Agriculture Organization of the United Nations, so as to formulate an international regulatory system favorable to China. Second, we should encourage other countries to jointly establish a database of information on the supply, demand, and transaction of international agricultural products to prevent speculation from destabilizing global grain prices and let supply and demand fundamentals drive prices.

In summary, to make China’s food security more resilient and safeguarded from the negative impacts of the “butterfly effect” stemming from geopolitical turbulence, a feasible strategy is to adjust China’s current pattern of grain imports and improve China’s unfavorable position in the grain futures market. Adjusting the structure of grain imports will help reduce China’s asymmetric reliance on imports from a few countries, thereby lowering the risk of a food security crisis caused by changes in other countries’ grain export policies. Active participation in global grain futures trading, moreover, will help China better respond to the impact of fluctuations in international grain prices on domestic grain prices. Additionally, participating in global food security governance and supporting the development of integrated food and agricultural companies will help further enhance China’s food security and its ability to respond to changes in the global grain market.

5. Concluding Remarks

This article formulates a framework for analyzing geopolitical conflicts and food security crises from the perspective of the “butterfly effect,” which it uses to examine the Russia-Ukraine conflict’s grave consequences for China’s food security. As grain is essential to national security and as countries have become increasingly interdependent in the grain trade, a contraction of exports from critical points in the global grain market will trigger a “butterfly effect” and cause a global grain security crisis that is disproportionate to those critical points’ volumes of exports. The geopolitical conflict between Russia and Ukraine has disrupted the two countries’ export of grain, and the destination countries of their grain exports have significantly increased imports and restricted exports, which has destabilized the supply and demand relationship in the global grain market. This has, in turn, encouraged speculation in grain commodity futures, and international grain prices have seen volatile fluctuations, which poses huge food security risks to countries around the world. The storm generated by this conflict has exposed China to risks from a contraction in total grain imports, concentration of import sources, and soaring prices, all of which have shaken the foundation of the country’s food security. Therefore, China should improve the resilience of its food security, diversify its sources of grain supply, and proactively develop financial instruments for the grain market, making better use of international forces to improve domestic food security, so as to compensate for its weak points in great-power strategic rivalry and strengthen its hand in global economic competition.

Of course, it is unlikely that the food security storm triggered by the Russia-Ukraine conflict will intensify without end. The chain reaction in the global grain market has somewhat abated since Russia selectively opened a few Black Sea ports for the export of grain amid the conflict and the United States and other Western countries exempted the grain trade from their sanctions against Russia. Nevertheless, it is still difficult to predict when the Russia-Ukraine conflict will end, and the possibility still exists of geopolitical conflicts triggering a “butterfly effect” in the global grain market. For China, a question that deserves special attention is how to neutralize the negative effects of geopolitical relations on the grain trade, since understanding this will help China identify exporting countries’ potential to weaponize the grain trade as it opens up new sources of grain imports, so that it may select import sources on a case-by-case basis taking into account each country’s particular circumstances and thus prevent the grain trade from becoming a tool for strategic competition between great powers.