Page 138 - 2018 White Paper on the Business Environment in China
P. 138
8 White Paper on the Business Environment in China
long, long time. I commend the persistence of President of 27.4 million registered pet dogs. China is also second
Trump, Commerce Secretary Wilbur Ross, Treasury in global cat ownership with 58.1 million cats reported.
Secretary Steve Mnuchin, the U.S. Trade Representative’s That’s just a tad over 20 million less cats than the U.S. By
officials, and our own USDA professionals. I also thank 2014, nearly 7 percent of the nation’s urban households
our Chinese counterparts, who worked so hard to get this included a dog while 2 percent had a cat. The pet industry
agreement into place. When the Chinese people taste is exploding. Early forecasts predict the market will grow
our high-quality U.S. beef, there’s no doubt in my mind by more than 50 percent to 15.8 billion yuan by 2019
that they’ll want more of it” (Henderson). (Cerini). Many pet owners claim China’s one-child policy
may have stimulated enthusiasm for dog ownership as a
Overall, meat imports to China were strong during way to provide companionship to only children in young
the past two years, reaching record levels due to local households and to fill empty nests in homes whose
production issues. Local meat production has been children have grown up (Wines). Over 73 percent of pet
struggling to expand for several years, under pressure owners are adults 35 years of age or younger (Deng).
due to a myriad of factors including elevated production
costs (beef ), stricter production regulations (pork) and A recent Goumin survey showed 99.8 percent of pet
the import ban on grandparent stocks imposed in 2015 owners were willing to spend money on their animals for
(poultry). As a result of these domestic challenges, China food, training, vaccinations, neutering and vet visits. Pet
imported record volumes of pork, beef and close to food has quickly evolved from table scraps to high-quality
record volumes of poultry meat in 2016. China became pet food. More expensive natural pet food has surpassed
the world’s largest pork importer in 2016, bypassing 25 percent of the market and is expected to grow for the
Japan, and will be second only to the U.S. regarding beef next few years by 55 percent as more young middle-class
imports (Industry Trend, Jan 2017). Although imported people are turning to more organic and balanced diets
products will continue to grow across the board in the for themselves as well. Chinese pet foods are nowhere
coming years, China’s import base is diversifying due near the leaders. Mars has about a third of the market
to governmental efforts toward food security and due followed by Nestle closing in on 20 percent. Chinese pet
to the slow change of the Chinese diet (Industry Trend, owners apparently want to pamper their pets as well. The
April 2017). Goumin survey claimed 40.9 percent of owners take their
dogs to beauty salons, 35 percent have professionals
Animal Husbandry and Pets wash their animals, and almost 5 percent have already
booked at least one photo shoot for their pet. Spa services,
Another problem that China will have to eventually manicures, and hair styling are very popular as well
solve is its severe shortage in veterinary science. (Deng). And then there is this: at least 40 percent of pet
“Veterinarians in our country cannot offer satisfying merchants in China sell pet clothing. Yourpet Marketing
professional service and their abilities require Research Institute claims the pet clothing industry is
improvements,” Chen Weisheng, the General Director expected to grow annually by 20 percent. Zhang Jiequn,
of China Animal Disease Control Centre, explained. a psychologist at Shanghai’s Huada Institute of Applied
“There is a weakening trend in non-profit township Psychology says pet ownership may have turned into
animal husbandry and veterinary stations, especially in an escape from interpersonal relationships, “The pet
rural areas. The number of stations has declined from becomes a projection of the opposite sex for some
45 thousand to 32 thousand between 1999 and 2014 people who do not find a partner” (Williams).
with that of the employees decreasing from 250,000 to
only 140,000. Additionally, the vast majority of the base Pet food—specifically dog and cat food—was
level staff are middle school graduates. The absence of included for the first time on China’s “positive list” for
business service organizations in those regions makes goods imported through cross border commerce in
the situation even worse” (China Animal Husbandry). 2016, creating a substantial e-commerce opportunity
for foreign pet food companies. Pet food can now be
A further problem is that many of these veterinarians imported via one of China’s 13 free trade zones or sold
are moving their practices out of the country and into the directly on business-to-consumer and consumer–to-
city. The National Bureau of Statistics claims China is now consumer e-commerce platforms. Numerous market
third in the world for dog ownership—behind only the research analyses have projected tremendous growth
U.S. (55.3 million) and Brazil (35.7 million)—with a total potential based on the fact that a large percentage
138
long, long time. I commend the persistence of President of 27.4 million registered pet dogs. China is also second
Trump, Commerce Secretary Wilbur Ross, Treasury in global cat ownership with 58.1 million cats reported.
Secretary Steve Mnuchin, the U.S. Trade Representative’s That’s just a tad over 20 million less cats than the U.S. By
officials, and our own USDA professionals. I also thank 2014, nearly 7 percent of the nation’s urban households
our Chinese counterparts, who worked so hard to get this included a dog while 2 percent had a cat. The pet industry
agreement into place. When the Chinese people taste is exploding. Early forecasts predict the market will grow
our high-quality U.S. beef, there’s no doubt in my mind by more than 50 percent to 15.8 billion yuan by 2019
that they’ll want more of it” (Henderson). (Cerini). Many pet owners claim China’s one-child policy
may have stimulated enthusiasm for dog ownership as a
Overall, meat imports to China were strong during way to provide companionship to only children in young
the past two years, reaching record levels due to local households and to fill empty nests in homes whose
production issues. Local meat production has been children have grown up (Wines). Over 73 percent of pet
struggling to expand for several years, under pressure owners are adults 35 years of age or younger (Deng).
due to a myriad of factors including elevated production
costs (beef ), stricter production regulations (pork) and A recent Goumin survey showed 99.8 percent of pet
the import ban on grandparent stocks imposed in 2015 owners were willing to spend money on their animals for
(poultry). As a result of these domestic challenges, China food, training, vaccinations, neutering and vet visits. Pet
imported record volumes of pork, beef and close to food has quickly evolved from table scraps to high-quality
record volumes of poultry meat in 2016. China became pet food. More expensive natural pet food has surpassed
the world’s largest pork importer in 2016, bypassing 25 percent of the market and is expected to grow for the
Japan, and will be second only to the U.S. regarding beef next few years by 55 percent as more young middle-class
imports (Industry Trend, Jan 2017). Although imported people are turning to more organic and balanced diets
products will continue to grow across the board in the for themselves as well. Chinese pet foods are nowhere
coming years, China’s import base is diversifying due near the leaders. Mars has about a third of the market
to governmental efforts toward food security and due followed by Nestle closing in on 20 percent. Chinese pet
to the slow change of the Chinese diet (Industry Trend, owners apparently want to pamper their pets as well. The
April 2017). Goumin survey claimed 40.9 percent of owners take their
dogs to beauty salons, 35 percent have professionals
Animal Husbandry and Pets wash their animals, and almost 5 percent have already
booked at least one photo shoot for their pet. Spa services,
Another problem that China will have to eventually manicures, and hair styling are very popular as well
solve is its severe shortage in veterinary science. (Deng). And then there is this: at least 40 percent of pet
“Veterinarians in our country cannot offer satisfying merchants in China sell pet clothing. Yourpet Marketing
professional service and their abilities require Research Institute claims the pet clothing industry is
improvements,” Chen Weisheng, the General Director expected to grow annually by 20 percent. Zhang Jiequn,
of China Animal Disease Control Centre, explained. a psychologist at Shanghai’s Huada Institute of Applied
“There is a weakening trend in non-profit township Psychology says pet ownership may have turned into
animal husbandry and veterinary stations, especially in an escape from interpersonal relationships, “The pet
rural areas. The number of stations has declined from becomes a projection of the opposite sex for some
45 thousand to 32 thousand between 1999 and 2014 people who do not find a partner” (Williams).
with that of the employees decreasing from 250,000 to
only 140,000. Additionally, the vast majority of the base Pet food—specifically dog and cat food—was
level staff are middle school graduates. The absence of included for the first time on China’s “positive list” for
business service organizations in those regions makes goods imported through cross border commerce in
the situation even worse” (China Animal Husbandry). 2016, creating a substantial e-commerce opportunity
for foreign pet food companies. Pet food can now be
A further problem is that many of these veterinarians imported via one of China’s 13 free trade zones or sold
are moving their practices out of the country and into the directly on business-to-consumer and consumer–to-
city. The National Bureau of Statistics claims China is now consumer e-commerce platforms. Numerous market
third in the world for dog ownership—behind only the research analyses have projected tremendous growth
U.S. (55.3 million) and Brazil (35.7 million)—with a total potential based on the fact that a large percentage
138
