A complete demand system is estimated separately for urban and rural
residents using a two-stage AIDS-QUAIDS model and pooled provincial and
time-series data from 2000 to 2010. The estimated models are then used to project
China’s rural and urban food demand in the future. Results suggest that with the
continued rise in per capita income and urbanization rate, the budget shares of food
grains and vegetables are expected to decrease while the shares of foods with animal
origin and other high-valued foods are expected to rise. Moreover, urban residents
will dominate the food demand in China.