Wednesday, 9 November 2011

Exports to China - ‘A single day of sub-zero temperature is not enough to create three feet of ice’

If nothing else, the Eurozone crisis has again brought into sharp focus China’s role as the world’s major financial player.

While Greece and Italy continue to dominate the headlines, commentators have again reiterated Asia’s destiny to become the global economic powerhouse, with China at its heart. And of course, with China’s own meteoric economic rise comes opportunity.

There’s simply no escaping the importance of China on the global economic stage. It’s the world’s second largest economy, with average growth rates of 10 per cent per annum over the last 30 years. In 2010, Foreign Direct Investment (FDI) surpassed $100 bn. It all makes for impressive reading – but how can the UK beef and lamb sector establish itself as a major supplier?

Undoubtedly the building blocks are already in place. China is the world’s second largest importer and, importantly in these troubled times for Europe, is the EU’s biggest trade partner.

Encouragingly, China is also is the largest producer and consumer of agricultural products. It had population of 1.34bn in 2010, yet the rural population is falling, from 74 per cent in 1990 to 54 per cent in 2009. Urbanisation is expected to reach 70 per cent by 2035. Meat consumption is also on the rise. In 1960, it stood at 3.8kg/capita, but had risen to 49.2 kg/capita by 2000, with beef at 4.8kg/capita and sheep meat 2.9kg/capita.

A growing gap between consumption and domestic supply with per capita meat consumption projections predicted to reach 92.6kg/capita by 2030 makes for tantalising reading for exporters. With UK beef and lamb exports up year-on-year since we were allowed to export again in 2006, surely the statistics suggest it’s simply a question of taking full advantage of supply and demand ratios?

Not quite. Market access is both a lengthy and complex process. The legacy of BSE continues to present a challenge and processing standards in the UK in relation to handling 5th quarter also need to be addressed. EBLEX continues to work hard in paving the way to develop market access, but it’s not going to happen overnight. We are currently looking at a number of these issues to promote carcase utilisation and 5th quarter markets, as well as services and support for exporters, and currently have a delegation in China looking at developing opportunities. The latest visit follows EBLEX’s presence earlier the year at the China International Meat Industry Exhibition (CIMIE) in Beijing, a platform for exhibitors to promote their brands and export markets.

So the work is underway and although there is still much to do, the potential long term rewards for UK beef and lamb producers could be immense. As the Chinese proverb says though, ‘A single day of sub-zero temperature is not enough to create three feet of ice’ – ‘Great things cannot be accomplished in a short period of time’.

  • Further information on China’s economic rise, the Eurozone crisis and what it means for East and West can be read by clicking here.