Other BriefingsChina’s Flourishing Agritech Sector – Opportunities for Foreign Investors
China’s drive to safeguard food security amid climate volatility, resource constraints, and demographic shifts is accelerating the development of China’s agritech industry. As traditional production models reach their limits, agritech offers the potential to raise productivity, strengthen resilience, and modernize agricultural supply chains through advances in digitalization, mechanization, and bio-innovation. Strong policy backing and structural necessity are creating a broad range of opportunities for investors across multiple high-growth segments.
Food security is one of China’s core policy priorities. Beyond ensuring adequate supply for the country’s 1.4 billion people, this increasingly means safeguarding the stability, resilience, and control of the agricultural system. Despite being the world’s largest agricultural producer, China faces tightening structural constraints that limit its ability to absorb rising demand or external shocks through the expansion of traditional production alone.
Climate volatility, the growing incidence of crop pests and zoonotic diseases, and mounting pressure on land and water resources are compressing the margin for error in agricultural production. At the same time, demographic shifts, including an aging rural workforce and rising labor expectations, are undermining the sustainability of labor‑intensive farming models. These pressures are becoming more acute as dietary preferences change and demand for higher‑quality and more nutritionally dense food rises along with incomes.
Against this backdrop, strengthening food security has become less about expanding output at any cost, and more about improving productivity per unit of resource, managing systemic risks, and enhancing supply‑chain resilience.
Agritech is thus occupying an increasingly strategic position in China’s development agenda. From bio-breeding to digitization, the sector offers many answers to the country’s food production problems, offering tools to raise yields, enhance resilience, improve resource efficiency, and modernize agricultural production and supply chains. The combination of policy support and structural necessity is driving rapid growth in numerous industry segments, opening up a wide range of new opportunities for investors.
The need for China’s agritech industry
Agritech has emerged as a field of strategic importance and focus for China’s policymakers. Technology plays a crucial role in improving agricultural productivity and output, increasing crop and livestock yields, and strengthening crop and livestock resilience against diseases, natural disasters, and climate change.
Improving the productivity and resilience of China’s domestic agricultural industry is seen as crucial for shoring up food security and reducing reliance on imports. Although China is the world’s largest agricultural producer, with the country’s total agricultural output amounting to RMB 20.6 trillion (US$2.96 trillion), accounting for 15.29 percent of GDP China currently does not produce enough food to meet the needs of the 1.4 billion people living in the country. Moreover, even with a shrinking population, rising income levels and living standards drive up demand for higher-quality – and more resource-intensive – food and nutrition.
The country therefore still relies on imports to fill in the gap. In 2025, China imported US$207.4 illion worth of agricultural goods. This included 131 million metric tons of staple food crops (including 103.4 million tons of soybeans), 5.7 million tons of cooking oil, 5.7 million tons of meat, and 8.8 million tons of aquatic products.
Reliance on imports for foodstuffs is a major point of concern for the Chinese government, as geopolitical or global economic shocks could disrupt supply chains and hamper China’s access to critical food supplies. The increasing incidence of natural disasters and rising temperatures due to climate change further add to these anxieties, as well as evolving crop pests and zoonotic diseases that continue to threaten the stability of agricultural production and China’s long-term food security.
China also has a limited amount of arable land – reaching around 129 million hectares at the end of 2024, although total harvested area reached 173 million hectares – as well as limited water resources, which means increasing crop yields will be crucial to strengthening agricultural self-sufficiency. The Action Plan for the New Round of Staple Food Crop Production Capacity Enhancement (2024-2030), approved by the State Council in April 2024, requires that the sown area of staple food crops (a broad category that covers certain grains, tubers, and legumes) be maintained at around 1.75 billion mu (116.7 million hectares), while the sown area of grains and cereals to be kept at about 1.45 billion mu (96.7 million hectares) in order to protect arable land resources. Meanwhile, the Action Plan aims for staple food crop yield per mu to reach about 420 kilograms, corresponding to about 6.3 tons per hectare. In 2025, China’s per unit yield of staple food crops reached almost 6 tons per hectare, according to the National Bureau of Statistics (NBS).
The Action Plan also aims to add 100 billion jin (50 million metric tons) in staple food crop production capacity by 2030. In 2025, total staple food crops production reached 714.9 million tons, including 6.6 million tons of grains and cereals.
Recognizing the challenges to achieving these targets, China’s policymakers have been highlighting the need for modernizing and improving the resilience of the agricultural sector, in particular through processes such as automation and mechanization, digitization, biological breeding, and genetic engineering, among other technologies.
Expansion of domestic production of seeds and crops
China’s production of domestic crop varieties has grown steadily as the country sought to reduce the reliance on foreign varieties for domestic production. According to MARA, domestically bred crop varieties now cover over 95 percent of the total planted area.
Over the 14th Five Year Plan period (2021 to 2025), China developed a range of urgently needed crop varieties. These include the Fusarium head blight-resistant wheat called “Yangmai 53”, the brown planthopper-resistant rice “Yangxianyou 4278”, the density-tolerant, high-yield maize “Dongke 1188”, and the herbicide-tolerant, high-yield soybean “Maiyu 511”, among other important crop varieties.
China has also made strides in the domestic production of a variety of crops that were previously dominated by imports. For instance, between 2021 and 2025, the market share of domestically developed broccoli and white enoki mushroom varieties increased from less than 5 percent to 37.5 percent and 30 percent, respectively, while independently bred white-feather broiler chickens and Pacific white shrimp have gone from having no presence in China securing market shares of 28 percent and 50 percent, respectively.
Modernization and mechanization
China has been actively modernizing its agriculture sector over the past decades, with steadily increasing the levels of farming automation and mechanization. According to MARA, the current “comprehensive mechanization rate” of crop cultivation, planting, and harvesting has reached 75.6 percent5, with the rates for certain crop varieties being higher, especially wheat (98 percent), corn (92.23 percent), cotton (91.69 percent), and soybeans (89.42 percent). However, mechanization rates for other crop varieties were lower, with potatoes reaching only 60.65 percent and oilseed rape reaching 70.32 percent, leaving room for further progress.6
Policy support for China’s agritech industry
China’s policymakers have underscored the strategic importance of agritech for many years. The 14th Five-Year Plan explicitly called for “improving the agricultural science and technology innovation system, innovating agricultural technology extension and service models, and developing smart agriculture” while also “strengthening animal disease prevention and control and pest and disease management, and enhancing agricultural meteorological services”.
The 15th Five-Year Plan recommendations, which form the basis of the 15th Five-Year Plan that will outline the country’s policy priorities for economic and social development during the period from 2026 to 2030, calls for accelerating agricultural modernization. Key objectives include improving overall production capacity and quality, promoting high-standard farmland construction, protecting critical soil resources, and advancing smart, high-end agricultural machinery suitable for diverse terrains. The plan also highlights modern facility-based agriculture, diversified food supply systems, and the integration of agriculture, forestry, animal husbandry, and fisheries.
The No. 1 Central Document for 2025 – the first policy document released by the Central Committee of the Chinese Communist Party of China each year which traditionally focuses on rural affairs – further strengthens this agenda and highlights the concept of “agricultural new quality productive forces” (农业新质生产力), which integrates modern technologies and management models to enhance agricultural productivity and quality. It calls for expanded use of AI, big data, and low-altitude technologies, the construction of digital farms and smart machinery networks, and the application of precision monitoring systems for soil, crops, and environmental conditions.
The National Key Areas for Agricultural Science and Technology Innovation Plan (2024–2028), released by MARA in February 2025, identifies ten priority sectors for investment, ranging from crop breeding, farmland quality improvement, and agricultural machinery development to pest and disease control, high-efficiency planting and breeding, green and low-carbon agriculture, processing and food manufacturing, product quality and safety, and rural development.
The 2025 version of the Catalogue of Encouraged Industries for Foreign Investment lists several fields related to agritech, including (but are not limited to):
- Development and production of new cultivation technologies for sugar crops, fruit trees, and forage crops.
- Cultivation and development of new varieties of high-yield and high-efficiency silage plants.
- Development and application of standardized and large-scale livestock and poultry farming technologies and intelligent farming technologies.
- Smart agriculture (integrated application of software technology and equipment).
- Rural e-commerce and new rural service industries, including agricultural production services adapted to large-scale, standardized, and mechanized agricultural production, as well as rural life services.
Companies engaging in encouraged industries can avail of a range of preferential policies, including customs duty exemption on the import of equipment for self-use, priority access to land for land-intensive industries, and a reduced 15 percent corporate income tax (CIT) rate for companies operating in China’s western regions and Hainan Province, and tax credit incentives for the reinvestment of profits in China.
Key market segments
Smart agriculture
Smart agriculture – a term that encompasses the integration of digital technologies such as IoT and AI throughout the agricultural value chain – is becoming an increasingly mature sector as farms and producers adopt smarter, data-driven production and management models.
Collection of data on agricultural processes through hardware such as smart sensors, remote sensing equipment, and drones allows farmers to monitor resource use, weather conditions, soil quality, environmental indicators, and pest activity, providing invaluable insights that can help improve efficiency in production processes and resource utilization, ultimately serving to increase yields and reduce costs.
While overall rates are still low, China’s agriculture industry is quickly digitizing. According to state media, China’s agricultural production “informatization rate” rose from 25.4 percent in 2021 to 27.6 percent in 2023, with the aquaculture industry (fisheries and animal husbandry) reaching 35 percent and the field crop informatization rate reaching 26.4 percent. The National Smart Agriculture Action Plan (2024–2028), released by the Ministry of Agriculture and Rural Affairs (MARA) in November 2024, aims for the informatization rate of agricultural production to exceed 30 percent by the end of 2026 and 32 percent by the end of 2028.
Beyond on-farm production processes, digitization is also spurring the development of digital agricultural services and e-commerce channels. According to the 2024 Digital China Development Report from the National Data Administration (NDA), online retail sales of agricultural products reached RMB 680 billion (US$97.5 billion) in 2024, increasing by 15.8 percent from 2023.
This rapid digital transformation presents a host of opportunities for software and hardware providers, particularly in areas such as data platforms, intelligent equipment, agricultural IoT solutions, and digital supply chain services.
Agricultural machinery and equipment
Agricultural machinery plays a central role in modernizing China’s farming sector, and as automation and mechanization has risen, so has ownership rates. Nationwide, there are now 20.56 million tractors and 42.25 million sets of implements in 2024, according to MARA’s Agricultural Mechanization Management Department, with large- and medium-sized tractors seeing year-on-year growth of 9.14 percent and 3.11 percent from the previous year, respectively. Implements for tractors over 80 horsepower grew 3.96 percent year-on-year, while grain crop machinery continued to expand steadily, with ownership of rice transplanters, grain combine harvesters, and corn harvesters reached 1.027 million, 1.745 million, and 0.702 million units, respectively. Domestically produced advanced equipment such as pneumatic-electric high-speed precision seeders, 580-horsepower forage harvesters, large-baler balers, and industrial tomato harvesters have also entered small-batch production, while specialized machines for hilly and terraced fields have been deployed successfully in frontline operations.
Despite these gains, the traditional tractor sector has faced headwinds, with constrained purchasing power by farmers resulting in lower sales numbers. According to data from the NBS cited by the China Industry News Network (CINN), in the first half of 2025, overall tractor production and sales declined, with large tractors falling 32.8 percent, medium tractors 13.3 percent, and small tractors 8.3 percent from the same period in 2024, reflecting weaker market demand, inventory overhang, and constrained farmer purchasing power.
However, the high-end and smart machinery segment is bucking the trend. 200-horsepower and above tractors, particularly power-shift models, have seen strong sales growth, driven by policy incentives, technological upgrades, and the needs of large-scale, mechanized farms. In 2024, power-shift tractors exceeded 5,000 units in sales, with high-end models increasingly concentrated in regions such as Xinjiang, Inner Mongolia, and Heilongjiang, which together account for 70 percent of demand, according to CINN.
Meanwhile, other product segments are seeing considerable market momentum, in particular intelligent machinery such as agricultural UAVs and robots. According to MARA, the number of plant protection UAVs in 2024 reached 201,000 units, a 20.5 percent year-on-year increase, while facility inspection robots, chick beak trimming robots, and six-row cotton baling harvesters are being adopted in large-scale farms. The market share of high-speed rice transplanters and 12 kg/s grain combine harvesters from domestic brands continues to expand.
Bio-breeding and bio-engineering
Bio-breeding and bio-engineering are viewed as critical tools for addressing China’s long-term agricultural challenges by improving crop and animal pest and disease resistance, climate resilience, resource efficiency, and yields. As discussed above, China has already made substantial progress through conventional and molecular breeding, with domestically developed seed varieties now accounting for the vast majority of planted area and playing a central role in improving yields and reducing reliance on imports.
However, in the field of genetic engineering and related bioengineering technologies, China has historically been cautious. Regulatory constraints and biosafety concerns meant that, until recently, the commercialization of genetically modified (GM) crops remained extremely limited. This stance has only begun to shift in the past few years, as authorities gradually loosened regulations and enabled pilot cultivation in 2021, before issuing licenses for the development and cultivation of selected GM corn and soybean varieties to domestic companies at the end of 2023.
As a result, adoption has accelerated from a very low base. According to data from Kynetec, GM crops accounted for only around 0.1 percent of China’s corn and soybean production in 2023. Early estimates suggest this share rose to approximately 4 to 5 percent in 2024, with projections indicating that GM varieties could account for as much as 40 percent of production by 2030 as regulatory approvals expand and farmer acceptance increases.
From a market perspective, the broader seed and bio-breeding segments are expected to grow faster than the global average. Data from Kynetec, cited by the Qianzhan Industry Research Institute, estimates that China’s overall seed market will reach RMB 73.2 billion (US$10.5 billion) by 2025, representing a compound annual growth rate (CAGR) of 5.8 percent, significantly outpacing global growth. Given that the penetration rate of bio-breeding products in China remains well below that of advanced markets such as the United States, and in light of strong policy support, growth in the bio-breeding segment is expected to be even faster than the seed industry as a whole. Based on an estimated CAGR of around 6.5 percent over the next five years, China’s bio-breeding market is projected to exceed RMB 4.4 billion (US$630.9 million) by 2030.
The strategic importance of the sector has been explicitly recognized by policymakers. Bio-breeding was included for the first time in China’s 2018 Strategic Emerging Industries Classification, underscoring its role in strengthening food security, reducing reliance on foreign seed technologies, and upgrading agricultural productivity through innovation.
Although the industry has significant growth potential, it remains tightly regulated due to the sensitive nature of seed security, genetic resources, and GM technologies. Under the 2025 Market Access Negative List, prior approval is required for private investment in a wide range of activities related to crop and forestry seeds, edible fungi strains, and other reproductive materials, as well as for quality testing, import and export, and the collection and utilization of nationally protected germplasm resources. Additional approvals are required for cooperation with foreign entities involving germplasm resources, the transfer of plant variety rights to foreign parties, and the introduction of seeds or seedlings from abroad.
Indoor and vertical farming
Indoor and vertical farming offers a high-efficiency solution to China’s land and water constraints, enabling cultivation in areas with little or no arable land, including urban centers, while also shortening the supply chain to end consumers. This is increasingly important as China’s population continues to urbanize even amid an overall population decline.
The sector is largely focused on high-value crops such as leafy vegetables, soft fruits, and medicinal plants, positioning it at the premium end of the industry. According to a report from GEP Research, leafy vegetables accounted for 71 percent of worldwide vertical agriculture output, while berries and medicinal plants are emerging as new growth drivers worldwide. Fresh fruits and vegetables are culturally very important in China, with shoppers preferring daily or frequent purchases of fresh produce rather than bulk-buying shelf-stable or frozen alternatives. According to a report from IIM Information, the share of direct supply from vertical farms on China’s urban fresh-food e-commerce platforms will rise to 28 percent, while consumers’ willingness to pay for certified “zero-kilometer vegetables” will increase 2.3 times, highlighting strong market potential for urban vertical farming.
China is at the forefront of innovation in vertical farming, both domestically and internationally. According to GEP Research, in 2025, China accounted for 41 percent of 12,000 vertical agriculture patent applications globally, while IIM Information notes that 38 percent of global patent applications in LED spectral technology for plant factories were made by China.
Policy support is reinforcing sector growth. The National Modern Facilities Agriculture Development Plan (2023–2030), issued by MARA at the end of 2023, emphasizes the construction of high-end, year-round, multi-layered, and intelligently managed urban facilities, including vertical farms and plant factories. The plan promotes multi-layer cultivation systems, hydroponics and aeroponics with biodegradable substrates, and precision nutrient delivery. It also encourages intelligent management systems that integrate crop growth models with automated environmental control, as well as the adoption of advanced robotics for grafting, greenhouse inspection, crop protection, and harvesting.
Investment opportunities for foreign companies
Technology-enabled productivity and efficiency solutions
The goal of raising per-unit yields and improving resource efficiency creates opportunities for foreign providers of precision agriculture technologies, including sensors, monitoring systems, decision-support software, and data analytics platforms that improve fertilizer, pesticide, and water efficiency. Solutions that can demonstrate measurable yield gains, cost reductions, or environmental benefits are well aligned with government priorities and increasingly sought after by large-scale farms, cooperatives, and agribusiness operators.
Smart agriculture hardware, software, and data platforms
China’s relatively low but rapidly rising agricultural informatization rate highlights a large addressable market for foreign firms with experience in digital agriculture. Opportunities exist in agricultural IoT systems, remote sensing, farm management software, AI-driven crop and livestock monitoring tools, and integrated data platforms that support real-time decision-making. Beyond on-farm applications, demand is also growing for digital solutions that support traceability, quality control, logistics optimization, and agricultural e-commerce, particularly as online sales of agricultural products expand rapidly.
High-end and intelligent agricultural machinery
While overall demand for traditional tractors and basic machinery has softened, China’s transition toward large-scale, mechanized, and professionalized farming continues to drive demand for high-end and intelligent equipment. This includes large-horsepower tractors, autonomous and semi-autonomous machinery, precision seeders, plant protection UAVs, and agricultural robots. Foreign manufacturers with strengths in advanced components, control systems, precision equipment, and automation software are well positioned to serve this segment, particularly in regions dominated by large farms and commercial agricultural enterprises, such as central and northern China.
There are also opportunities in specialized machinery for facility agriculture, hilly and mountainous terrain, and labor-saving equipment tailored to aging rural demographics.
Facility agriculture, indoor farming, and controlled-environment systems
China’s emphasis on modern facility agriculture and urban food supply resilience supports investment opportunities in greenhouse technologies, vertical farming systems, climate control equipment, lighting solutions, irrigation and nutrient delivery systems, and facility automation. Foreign companies with expertise in energy-efficient designs, advanced environmental control, LED lighting optimization, and integrated production systems can benefit from growing demand in urban markets, especially at the premium end of the fresh produce segment.
China’s push to modernize its agricultural sector, strengthen food security, and raise productivity across constrained land and water resources is creating sustained demand for advanced agritech solutions. While certain upstream segments remain tightly regulated, particularly in seeds and genetic resources, foreign companies continue to find meaningful opportunities across a broad range of technology, equipment, and service-oriented segments where policy support is strong, and market demand is growing.
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