China’s tax, food safety crackdown opens back door to sustainability

Published on
June 16, 2016

Sustainability has never been a serious priority for Chinese vendors or buyers of seafood. Nor has traceability. But a crackdown on corruption, tax and customs collection and food safety may indirectly improve the situation in regard to seafood sustainability in China.

Despite being set to become the world’s number-one market for seafood in 2016, according to the United Nation’s Food and Agriculture Organization (FAO), China has not prioritized seafood sustainability, in the Western sense of the term. But now that China needs cash to plug a huge debt hole, its financial priorities are inadvertently helping make the country’s seafood more sustainable.

Facing budget crunches, China’s provincial and local governments are looking at ways to widen their revenue pools. One solution they’ve found is to increase imports, which they can tax. That’s why lots of regional Chinese cities have been announcing with fanfare that they’re now handling customs for seafood and other high-value imports, which previously came through only a handful of major ports. Anecdotal evidence from trading companies suggests inland cities are being allowed flexibility in how they charge, so that import duties are slightly lower in certain cities.

Another way local governments are increasing revenue is by tightening tax collection. Previously, Chinese customs were notoriously porous, as many officials topped up their income by turning a blind eye to commodities shipments, including seafood. This was an especially big problem in more remote provinces, particularly those bordering Southeast Asian states like Vietnam. But when China’s economy was booming, such practice was ignored by national authorities.

But China’s current economic slowdown and its recently launched crusade against corruption means China is now going after unpaid taxes. This has manifested itself in tighter checks on ports and even checks on incoming passengers suspected of bringing in large amounts of contraband at major airports, including those in Beijing and Shanghai.

The state’s heightened enforcement efforts will take time to pay off, but squeezing smugglers will have a long-term positive impact for sustainability in China. By forcing imports to come through official channels, it’s going to be easier to quantify and trace China’s seafood imports which are, depending on who you talk to, may be up to 50 percent larger in volume than the official figures suggest.

Another, sometimes unspoken, motivation for the customs crackdown is food safety. Under last year’s revised food safety law, vendors are held liable for unsafe food they sell. Hefty fines have prompted markets and supermarket chains to become a lot more curious about the origins of their foodstuffs. Traceability, one hopes, will become a priority (as well as a profit driver) for retailers competing for customers.

Corruption and food safety may not be directly tied with sustainability, but indirectly, these two factors are critical in getting anything done on sustainability, as tracking trade flows is critical for action. Much of the significant trade in endangered species into China happens through back channels, unrecorded in official books – an issue that’s been highlighted by the work of Australian researcher Michael Fabinyi.

Chinese per capita consumption of seafood trebled to 30 kg per capita between 1990 and 2010, though that figure is an FAO calculation of Chinese per capita supply, rather than actual consumption, for which estimates vary between 15 and 20 kg per capita. Nonetheless, there’s been a giant increase in seafood consumption and if the trend continues as expected, that will put huge strain on global seafood supply.

Just as the decision to bar government spending on shark-fins was billed as a move against overspending on official dining, so too the crackdown on tainted or improperly stored foreign seafood is backhanded method of fighting for increased domestic food safety. By pinning the blame on corruption or foreign forces, the government can surreptitiously clamp down on unscrupulous vendors of unsafe food that have caused it headaches and eroded the market share of local food companies.

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