Page 188 - 2022 White Paper on the Business Environment in China
P. 188
2 White Paper on the Business Environment in China
period, China beef imports increased 18% year- estimated 14 million people work for its fisheries.
on-year, with all top 10 suppliers (except Australia Regulation of the seafood industry kicked off in 1986
and Argentina) recording double-digit growth. The with a law that concentrated much of the industry’s
US, a relative newcomer, has seen the Phase One power into local governments. The government
Agreement translate into a fast-growing beef trade. incentivizes fishing with subsidies for things like
The Phase One Agreement struck between the US fuel. In 2018, China distributed US$7.2 billion in
and China at the start of 2020 provided unrivalled fishing subsidies — more than any other country,
technical access for US beef exports to China. Not and a fifth of all such subsidies globally (Reale).
only did the agreement wind back trade war tariffs,
but the US was also permitted to export HGP-treated In Beijing’s push to become a maritime
beef (albeit within maximum residue limits and with superpower, China’s fishing fleet has grown to
beta-agonists still banned) and beef from cattle over become the world’s largest by far—and it has
30-months of age to China. Furthermore, the US was turned more aggressive, provoking tensions
given the ability to apply a systems-based approach around the globe. The fleet brings in millions of tons
to China establishment approvals (unlike the rest of of seafood a year to feed the country’s booming
the world, which seeks approval on a case-by-case middle class. Foreign governments, fishermen
basis). This allows it to grant new establishments and conservation groups have accused the fleet of
access at a time when COVID-19 has seen other illegal fishing, including by using banned equipment
countries’ approvals grind to a halt. While initial and venturing into other countries’ territory. That
trade was slow, US beef shipments to China surged fishing has upended local economies and threatens
in 2021. While the Phase One Agreement was a ecosystems including around the Galápagos
political deal, and the China-US political relationship Islands, affected governments and fishermen say.
has not improved under the Biden Administration, The Chinese fleet is helping the country stake out
there is little sign that either party is about to walk a bigger presence at sea, including by building a
away from the pact. US beef in China is capitalizing world-wide network of ports. The vessels, rigged
on the reduced presence of premium Australian with winches and booms and pulling giant nets,
product, particularly grain fed loin cuts, and tapping can be twice as large as a naval patrol boat, at
into the fast-growing demand for high quality beef an average of almost 200 feet long. Fishing crews
in the market. While the US has a substantial supply have helped establish island settlements in waters
base to draw on and Chinese demand is strong, subject to territorial disputes with neighbors (Yap).
China still needs to compete with the US domestic
consumer and other affluent buyers in North Dairy Products
Asia. Demand in the US is currently red hot, as the
economy surges amid unprecedented stimulus In 2020, China’s dairy industry production was
and a successful vaccine roll-out, and beef prices 35.3 million tons, up 7.0% year on year. The milk
jumped in mid-2021. This pricing pressure may soon production registered 34.4 million tons with a
weigh in on US beef shipments to China. In addition, 7.5% year-on-year increase. All large-scale dairy
overwhelmed supply chains and logistics have farms have automated milking system in place and
largely limited US beef exports to China to frozen account for 67% of dairy farms (DS).
sea-freight. Australia remains the largest supplier of
chilled beef into the market (CS). China’s dairy farming industry has transformed
over the last two decades and today the main
Fishing trend is big scale farming. In 2019 the annual milk
production in China was 32 billion kg. The 25 largest
Everywhere you look in the world of seafood, farming companies of milk delivered 9.4 billion kg
there’s China. It produces more than a third of the of the country’s production or contributed 29%.
world’s seafood each year. It’s been the world’s These farming companies had 1.7 million dairy
largest exporter of seafood since 2002. And it’s cattle or on average nearly 68 thousand animals
also the largest consumer of seafood. China's each. Behind those big numbers of animals per
fishing industry is massive, and highly regulated. An dairy farming company are several dairy farms that
188
period, China beef imports increased 18% year- estimated 14 million people work for its fisheries.
on-year, with all top 10 suppliers (except Australia Regulation of the seafood industry kicked off in 1986
and Argentina) recording double-digit growth. The with a law that concentrated much of the industry’s
US, a relative newcomer, has seen the Phase One power into local governments. The government
Agreement translate into a fast-growing beef trade. incentivizes fishing with subsidies for things like
The Phase One Agreement struck between the US fuel. In 2018, China distributed US$7.2 billion in
and China at the start of 2020 provided unrivalled fishing subsidies — more than any other country,
technical access for US beef exports to China. Not and a fifth of all such subsidies globally (Reale).
only did the agreement wind back trade war tariffs,
but the US was also permitted to export HGP-treated In Beijing’s push to become a maritime
beef (albeit within maximum residue limits and with superpower, China’s fishing fleet has grown to
beta-agonists still banned) and beef from cattle over become the world’s largest by far—and it has
30-months of age to China. Furthermore, the US was turned more aggressive, provoking tensions
given the ability to apply a systems-based approach around the globe. The fleet brings in millions of tons
to China establishment approvals (unlike the rest of of seafood a year to feed the country’s booming
the world, which seeks approval on a case-by-case middle class. Foreign governments, fishermen
basis). This allows it to grant new establishments and conservation groups have accused the fleet of
access at a time when COVID-19 has seen other illegal fishing, including by using banned equipment
countries’ approvals grind to a halt. While initial and venturing into other countries’ territory. That
trade was slow, US beef shipments to China surged fishing has upended local economies and threatens
in 2021. While the Phase One Agreement was a ecosystems including around the Galápagos
political deal, and the China-US political relationship Islands, affected governments and fishermen say.
has not improved under the Biden Administration, The Chinese fleet is helping the country stake out
there is little sign that either party is about to walk a bigger presence at sea, including by building a
away from the pact. US beef in China is capitalizing world-wide network of ports. The vessels, rigged
on the reduced presence of premium Australian with winches and booms and pulling giant nets,
product, particularly grain fed loin cuts, and tapping can be twice as large as a naval patrol boat, at
into the fast-growing demand for high quality beef an average of almost 200 feet long. Fishing crews
in the market. While the US has a substantial supply have helped establish island settlements in waters
base to draw on and Chinese demand is strong, subject to territorial disputes with neighbors (Yap).
China still needs to compete with the US domestic
consumer and other affluent buyers in North Dairy Products
Asia. Demand in the US is currently red hot, as the
economy surges amid unprecedented stimulus In 2020, China’s dairy industry production was
and a successful vaccine roll-out, and beef prices 35.3 million tons, up 7.0% year on year. The milk
jumped in mid-2021. This pricing pressure may soon production registered 34.4 million tons with a
weigh in on US beef shipments to China. In addition, 7.5% year-on-year increase. All large-scale dairy
overwhelmed supply chains and logistics have farms have automated milking system in place and
largely limited US beef exports to China to frozen account for 67% of dairy farms (DS).
sea-freight. Australia remains the largest supplier of
chilled beef into the market (CS). China’s dairy farming industry has transformed
over the last two decades and today the main
Fishing trend is big scale farming. In 2019 the annual milk
production in China was 32 billion kg. The 25 largest
Everywhere you look in the world of seafood, farming companies of milk delivered 9.4 billion kg
there’s China. It produces more than a third of the of the country’s production or contributed 29%.
world’s seafood each year. It’s been the world’s These farming companies had 1.7 million dairy
largest exporter of seafood since 2002. And it’s cattle or on average nearly 68 thousand animals
also the largest consumer of seafood. China's each. Behind those big numbers of animals per
fishing industry is massive, and highly regulated. An dairy farming company are several dairy farms that
188
