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Why is China Buying the World's Seeds?

China is gobbling up major seed businesses to satisfy its growing appetite for food firms.

Two weeks ago, state-owned ChemChina finalized its $44 billion purchase of the Swiss pesticides and seeds giant, Syngenta. It was China's biggest foreign takeover of all time.

On Tuesday, Dow Chemical (DOW) announced that an agriculture fund backed by the Chinese government would pay $1.1 billion for its Brazilian corn seed and research business.

Chinese firms have spent $91 billion over the past decade purchasing nearly 300 foreign companies involved in agriculture, chemicals and food, according to Dealogic.

Why the massive spending spree?

Food security

Experts say the purchases are part of China's plan to improve its ability to supply food to its population of nearly 1.4 billion. As Chinese living standards improve and citizens demand more meat products, the country needs a growing supply of animal feed.

But China is contending with major challenges: An aging agricultural workforce, pollution, climate change and high levels of soil depletion, according to Rob Bailey, an expert in food security at policy institute Chatham House.

The country's farms also suffer from low yields due to outdated farming practices, said Brett Stuart, CEO and co-founder of Global AgriTrends.

The latest seed purchases show China wants to lock down the scientific know-how needed to improve its domestic crop yields, said Stuart.

"They're trying to acquire knowledge," he said. "I think these moves just show that they are trying to do as much as they can for food self-sufficiency ... There's not enough traded food in the world to save them were they to fail."

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