China has been a major participant in international markets for agricultural commodities for at least a century. This study explores the possibility that China's grain import demand is a function of state policy on interprovincial grain marketing. China's system for the interprovincial transfer of grain appears to have performed very poorly in the first decade of reform. The central government has taken several important steps to reduce its role in the grain market to facilitate grain transfer. However, it remains to be seen if the constraints, such as storage and transport, could be eased sufficiently to increase the level of interprovincial grain transfer.