To ensure food security for its 1.3 billion people, Beijing has injected large sums of public money into agricultural biotechnology research since the 1980s. China's plan appears to have two sides: push forward fast on GM foods which offer high yield, and resistance to disease, while promoting GM-free areas for crops for sale to rich export markets, where many consumers still reject the idea of genetically modified food.

China is now emerging as a global leader in some areas of technology. This year, scientists estimate it planted insect-resistant cotton on 2.2 million hectares of land, almost twice the size of Belgium, or 53 percent of the total cotton acreage in China, the world's top cotton producer.

"China is developing the largest plant biotechnology capacity outside of North America," scientists Jikun Huang, Scott Rozelle, Carl Pray and Qinfang Wang said in a joint article published in Science magazine earlier this year.

"Poor farmers in China are cultivating more area of genetically modified plants than are small farmers in any other developing country," they say.

Huang from the Centre for Chinese Agricultural Policy in Beijing said publicly-funded scientists were now working on nearly 60 crops, many of them ignored by western researchers who focus on a handful of plants.

"I believe China is now the leading country in (GM) rice and cotton. I think it will be also the case for some other food crops, such as peanuts, in five to 10 years," he said in a telephone interview with Reuters

CHINESE DILEMMA

But China faces a dilemma as consumers in its top trading partners, like the European Union, Japan and South Korea, are worried over the safety of GM crops, dubbed "Frankenstein food" because of fears that they may create mutation or diseases as yet unknown.

China fears such countries may reject its farm products unless it keeps GM crops under control, analysts say. But strong operations management has never been China's strength, nor law enforcement in a vast country where corruption and rural poverty remain endemic.

"They are concerned about their ability to continue to export," said a foreign diplomat in Beijing. "Once it (GM crops) is out there, there's no way of putting it back into the bottle."

So far, Beijing has approved commercialisation of only a few GM crops, such as cotton, tomatoes, sweet peppers and petunias.

It has also introduced a new set of rules, slowing down approval procedures, while restricting its own trade in GM organisms (GMOs), such as soybeans from the United States.

Monsanto Co (MON.N), the U.S. biotech and seed group, has so far applied in vain for commercialisation of its insect-resistant BT corn in the past three to four years, said John Killmer, president of Monsanto China based in Beijing.

"Each time, it seems there are new reasons (for rejection). I believe that in general there is administrative and government guidance not to approve insect resistance corn," Killmer said.

Some say Beijing has also put on hold commercialisation of Chinese GM herbicide-resistant rice, which had already passed the safety evaluation for environmental release.

China learned from bitter experience with its GM virus-resistant tobacco, officials say. It had to withdraw it from the market a few years after commercialisation in 1992 because of pressure from a major international tobacco importer.

Referring to the rules, the industry officials say China seems to have decided to wait and see how international consensus develops, while building up control mechanisms at home.

GMO PIRATES?