China is the second-largest seed market in the world behind the USA, with 19% of the share in the world commercial seed market in 2020. The Chinese seed market has experienced rapid growth over the past ten years, mainly due to increased utilization of certified seed and an increase in seed prices. The non-GM seed market dominates China's seed industry. Among transgenic crops, only GM cotton, which was introduced in 1997 and now accounts for 95% of the cotton area and GM papaya (a very small area), is cultivated in China commercially. China has not yet commercialized GM grain or oilseed traits.

The current China genetically modified organism (GMO) commercialization roadmap developed by the Ministry of Agriculture and Rural Affairs (MARA) has motivated several Chinese seed companies, which have had domestically developed GMO crops in the approval pipeline for a long time. The positive moves of the Chinese government to set out a clear path for approval for genetically modified (GM) crops had developed the hopes for plant breeders and grain exporters regarding the acceptance of crops created using new gene-editing breeding techniques in China.

China's leading position in agricultural gene editing with around 75% of the world's patents, along with the substantial investment of the Chinese government in the field, was signalling that China might opt for the less stringent regulatory process for the crops developed using new plant breeding techniques.

On 24th January 2022, the Chinese government made an unexpected decision to put gene-edited products as a subcategory of GMO products. Under the new law, the seed companies will have to obtain a biosafety certificate like GMOs. The companies need to submit biotechnology data, i.e., the technology used, the edits/transformations, the effect, etc. The regulations also seem to request seed companies to submit PCR assay results and the application.

However, the draft rules specify that unlike GMO crops, where lengthy field trials are necessary to obtain a production certificate, in gene-edited crops, a production certificate could be applied after the pilot trials, which will reduce the approval timeline from 5-6 years to 1-2 years.

The reduced commercialization timeline indicates the Chinese government's intentions to push the in-house development and commercialization of gene-edited crops to ensure food security. However, on the other hand, classifying gene-edited crops under the GMO category shows the Chinese government's intentions to keep a check on the trade/import of such products through the added requirement for biosafety certificate. Currently, there are no identity-preserved channels for the gene-edited crops coming from the Americas, and there are no ways of detecting them. The Chinese Academy of Agricultural Sciences (CAAS) is also proactively working towards developing a method for detecting gene-edited crops; however, there is no such mention of the process in the policy.

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Posted 26 January 2022 by Bharti Malhotra, Senior Analyst, Crop Science, Agribusiness, S&P Global Commodity Insights

This article was published by S&P Global Commodity Insights and not by S&P Global Ratings, which is a separately managed division of S&P Global.