Though crop research is a major focus, Chaoda is no longer merely a producer of crops. It has opened 20 organic fertilizer factories and is cooperating with the same Fujian academy to produce organic pesticides--a good business given the rising demand for organic produce. The company also runs wholesale markets in 10 major Chinese cities and some 130 retail outlets in cities in the east and south.

China's upcoming membership in the WTO is expected to hammer such behemoths as state-owned Heilongjiang Agriculture, one of China's biggest wheat growers. But Chaoda hopes to escape unscathed. Japan, South Korea, and Taiwan, all of which import Chaoda produce, must cut tariffs on Chinese agricultural products after the country enters the WTO. Chaoda reckons annual exports will grow by at least 30%, especially if Europe and the U.S. become customers, too. WTO entry is also expected to provide China future protection against some punitive trade measures--such as the duties that Japan recently slapped on Chinese shiitake mushrooms, tatami reeds, and leeks.

Finally, Chaoda can count on continued backing from the state. Beijing will continue to exempt fresh fruit and vegetable growers from paying income tax, as well as provide low-interest loans and cheap land, a practice China is allowed to continue after joining the WTO. "The government's aim is to develop China into the largest agricultural kingdom," says Chaoda's Kwok. Chinese farmers may not be quite the walkover that foreign players assumed.

Editor: Xu Xinlei

Source：businessweek.com