Page 172 - 2019 White Paper on the Business Environment in China
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9 White Paper on the Business Environment in China
Demand is growing rapidly, with the number of pigs made beef relatively more affordable. From 2011 to 2016,
increasing from 400 to 700 million in the past ten years. China’s domestic beef production grew 8 percent to 7
To keep up, the pig industry in China is undergoing a million tons (carcass weight equivalent), but was outpaced
massive transformation as it adopts new techniques to by even stronger consumption growth, which rose 20
breed and cull more pigs than ever before. For example, percent to 7.8 million tons during the same period (Wood).
one of the first of the mega pig farms is located in
Xiaoxinzhuang village, Hebei province. This large-scale Demand for beef continued to grow 3 percent in
pig farm houses over 10,000 sows in two huge barns on 2018 while production only increased 1 percent. This
a 180-acre site. The new facility is expected to produce rising demand for beef has been has been identified
up to 280,000 piglets annually. That’s about 20,000 tons by senior policy makers, most of whom do not come
of pork (Reuters, Inside the Megafarms). Hundreds of from an agriculture background, as a means of raising
such pig megafarm projects are now being supported rural incomes through cattle ranching. The plan has
across the country, industrializing the pork production been hampered by low levels of beef skills in rural areas,
sector, reducing costs and massively increasing market resulting in poor performances by the stock. Government
supply. Authorities have given firm backing to modern has significantly subsidized the import of semen as well as
large-scale farming, with smaller farms forced to close Charolais, Limousin, and Simmental breeding stock, but
after failing to meet new pollution standards. With shortfalls in feed is worrisome. China also lacks scientific
70 billion yuan (US$10.9 billion) invested in the pork breeding programs.
sector since 2016, farmers are increasingly paying more
attention to the quality of their animals as well of their The alleviation of rural poverty seems to be the priority
equipment. This has led to cooperation with partners over breeding quality in two key building plans: the
overseas to import breeding pigs genetically selected for National Beef and Lamb Meat Production Development
their quality meat, litter sizes and faster growth (Moore). Plan 2013-2020 (published in 2013) and the National
Change for Chinese pig farmers is inevitable as hundreds Grass Production Animal Husbandry Development Plan
of thousands of backyard farms are closed, too small to (published in 2016). Both plans emphasize building the
bear the cost of meeting new pollution standards. Higher sector as a means of curbing rural poverty and list regions
output from these mega-farms is expected to raise food in northern and southwestern China where beef and
safety standards and tame China’s notorious pork price lamb production could exist, but both are short on how
volatility (Reuters, Inside the Megafarms). to do it. Even so, China has become the second largest
beef producer by weight carcass at 7.8 million tons in
By May of 2018, pork prices were at a four-year low in 2017 (Fortune). USDA’s Foreign Agricultural Service has
the world’s biggest pork market (Xinhua, Pork prices). In projected China will import 2.26 billion pounds of beef in
the long-term, it also could turn China’s pork producers 2018 (Stotts).
into international competitors, offering quality,
competitively priced meat to regional markets. Over China may never fully be able to satisfy its demands
25 companies have announced almost 70 billion yuan with domestic production, at least not in the near future,
(US$10.94 billion) in new farm investment since 2016 so the country has increasingly looked to the international
(Reuters, Inside the Megafarms). market. At present, China’s annual consumption of beef
is close to 8 million tons and the terminal consumption
Beef scale is near 400 billion yuan. China’s meat consumption
structure is increasingly diversified; the proportion of pork
Beef, however is a totally different issue in China. The consumption in residents’ diet declined slightly, and the
US was the lead supplier with a two-thirds market share consumption of beef is gradually rising. China’s market
of the then-small $15 million China beef market when potential is prominent. Data show that China’s per capita
it lost access in 2003. During the following 13 years, beef consumption is not only far behind that of the US,
China’s consumers steadily consumed more red meat and but also is lower than Japan and South Korea. The Chinese
poultry, owing to both higher individual income levels domestic beef industry is basically being pulled apart
and population growth. Although traditionally the least at the seams. Consumers demand volume and quality,
consumed meat, beef consumption grew faster compared but the domestic beef is still dominated by small-scale
to pork and broiler meat over the past six years as rising farmers. It is impossible for this backward production
prices for broiler meat and pork (due to lower production) mode to meet market demand. So, China’s import volume
172
Demand is growing rapidly, with the number of pigs made beef relatively more affordable. From 2011 to 2016,
increasing from 400 to 700 million in the past ten years. China’s domestic beef production grew 8 percent to 7
To keep up, the pig industry in China is undergoing a million tons (carcass weight equivalent), but was outpaced
massive transformation as it adopts new techniques to by even stronger consumption growth, which rose 20
breed and cull more pigs than ever before. For example, percent to 7.8 million tons during the same period (Wood).
one of the first of the mega pig farms is located in
Xiaoxinzhuang village, Hebei province. This large-scale Demand for beef continued to grow 3 percent in
pig farm houses over 10,000 sows in two huge barns on 2018 while production only increased 1 percent. This
a 180-acre site. The new facility is expected to produce rising demand for beef has been has been identified
up to 280,000 piglets annually. That’s about 20,000 tons by senior policy makers, most of whom do not come
of pork (Reuters, Inside the Megafarms). Hundreds of from an agriculture background, as a means of raising
such pig megafarm projects are now being supported rural incomes through cattle ranching. The plan has
across the country, industrializing the pork production been hampered by low levels of beef skills in rural areas,
sector, reducing costs and massively increasing market resulting in poor performances by the stock. Government
supply. Authorities have given firm backing to modern has significantly subsidized the import of semen as well as
large-scale farming, with smaller farms forced to close Charolais, Limousin, and Simmental breeding stock, but
after failing to meet new pollution standards. With shortfalls in feed is worrisome. China also lacks scientific
70 billion yuan (US$10.9 billion) invested in the pork breeding programs.
sector since 2016, farmers are increasingly paying more
attention to the quality of their animals as well of their The alleviation of rural poverty seems to be the priority
equipment. This has led to cooperation with partners over breeding quality in two key building plans: the
overseas to import breeding pigs genetically selected for National Beef and Lamb Meat Production Development
their quality meat, litter sizes and faster growth (Moore). Plan 2013-2020 (published in 2013) and the National
Change for Chinese pig farmers is inevitable as hundreds Grass Production Animal Husbandry Development Plan
of thousands of backyard farms are closed, too small to (published in 2016). Both plans emphasize building the
bear the cost of meeting new pollution standards. Higher sector as a means of curbing rural poverty and list regions
output from these mega-farms is expected to raise food in northern and southwestern China where beef and
safety standards and tame China’s notorious pork price lamb production could exist, but both are short on how
volatility (Reuters, Inside the Megafarms). to do it. Even so, China has become the second largest
beef producer by weight carcass at 7.8 million tons in
By May of 2018, pork prices were at a four-year low in 2017 (Fortune). USDA’s Foreign Agricultural Service has
the world’s biggest pork market (Xinhua, Pork prices). In projected China will import 2.26 billion pounds of beef in
the long-term, it also could turn China’s pork producers 2018 (Stotts).
into international competitors, offering quality,
competitively priced meat to regional markets. Over China may never fully be able to satisfy its demands
25 companies have announced almost 70 billion yuan with domestic production, at least not in the near future,
(US$10.94 billion) in new farm investment since 2016 so the country has increasingly looked to the international
(Reuters, Inside the Megafarms). market. At present, China’s annual consumption of beef
is close to 8 million tons and the terminal consumption
Beef scale is near 400 billion yuan. China’s meat consumption
structure is increasingly diversified; the proportion of pork
Beef, however is a totally different issue in China. The consumption in residents’ diet declined slightly, and the
US was the lead supplier with a two-thirds market share consumption of beef is gradually rising. China’s market
of the then-small $15 million China beef market when potential is prominent. Data show that China’s per capita
it lost access in 2003. During the following 13 years, beef consumption is not only far behind that of the US,
China’s consumers steadily consumed more red meat and but also is lower than Japan and South Korea. The Chinese
poultry, owing to both higher individual income levels domestic beef industry is basically being pulled apart
and population growth. Although traditionally the least at the seams. Consumers demand volume and quality,
consumed meat, beef consumption grew faster compared but the domestic beef is still dominated by small-scale
to pork and broiler meat over the past six years as rising farmers. It is impossible for this backward production
prices for broiler meat and pork (due to lower production) mode to meet market demand. So, China’s import volume
172
