Tuesday, February 27, 2018

China Revitalizing Its Food Exports

China's agricultural exports plateaued in recent years due to rising costs that eroded competitiveness, a poor reputation for quality, and a more favorable market at home. Authorities are now trying to revitalize exports by upgrading quality, using integrated industrial management models, and creating new markets through the One Belt One Road initiative.

The "Central Document No. 1" on rural policy priorities for 2018 called for China to build a new externally open pattern for agriculture. At a February 8 press conference Minister of Commerce Gao Feng asserted that the new pattern of externally open agriculture is essential for "rural revitalization" and the overarching objective of making China a strong country in international trade.

Specific strategies include promoting trade with countries and regions along "One Belt One Road" routes and promoting exports of high value-added and specialty Chinese agricultural products.

An October 2017 article by China's Industry Information Network proclaimed that the Belt and Road initiative is giving China's agricultural exports new vitality by diversifying markets. The article cited free trade agreements with South Korea and Australia and strong growth in exports to Canada, Mexico, India, Pakistan, South Africa, Saudi Arabia, and Turkey as signs of revived confidence for China's agricultural exporting enterprises. Favorable policies and the Belt and Road initiative lay a "good foundation for exports to Northeast Asia, Central Asia, and the Middle East," the article stated.

The favorable policies included a restoration of 13-percent VAT refunds for exports of corn starch, distillers grains, and other corn-based industrial products as of September 2017. Inspection and testing fees are waived for food exporters, a benefit said to be worth 11 billion yuan to exporters.

Developing business models that integrate production, processing and marketing under a single company's control are said to strengthen export competitiveness. Another strategy is delineation of regional industry belts, including a tea belt in Sichuan, vegetable processing and crabs in Zhejiang Province, and flower and medicinal herb districts in Yunnan Province. Constructing foreign trade bases will support future agricultural exports, the article explained. 

The article also claimed China had won victories in dismantling technical barriers to Chinese products in other countries, including Indonesia's abandonment of safeguards on imported glucose and successful challenges of an EU anti-dumping investigation of concentrated soy protein products and tariff rate quotas on duck meat imports. The article says USDA's favorable assessment of China's food safety system for processed chicken brightens the prospects for Chinese chicken to reach America in the future.

The Ministry of Agriculture reported that agricultural exports totaled $75.5 billion during 2017, up 3.5 percent from the previous year.

Another China Industry Information Network article from December describes efforts to upgrade remote border crossings in western China to promote exports of vegetables and fruits to dinner tables in Central Asia and Russia. "Green channel" to expedite shipments of perishable products have promoted rapid double-digit growth in exports of tea, sunflower seeds, fresh garlic and fresh apples at the Irkeshtam crossing into Kyrgyzstan. Licorice, leather, and dried fruit have come into China. In November a refrigerated truck carrying tangerines and apples from Xinjiang's Tacheng City crossed the border at Qoqek and delivered the products to Askana and Almaty in Kazakstan, to Moscow, St. Petersburg and Chelyabinsk in Russia, and to other countries in Europe.

According to Urumqi District customs statistics, during January-October 2017 Xinjiang exported 320,000 mt of ag products (up 13.8%) valued at RMB 2.72 billion (up 20%). Freight at the Qoqek crossing point totaled 50,000 metric tons in 2013, and was up to 102,000 mt in 2017. Agricultural product exports include citrus, fresh peaches, apples, grapes, tomatoes, peppers, and garlic.

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