China pushing its banks to prop up seafood sector
China’s state-controlled banking sector is being deployed to pull the country’s seafood sector through the coronavirus crisis.
China’s banks are offering loan deferrals, restructurings, and larger lines of credit to seafood companies struggling in the midst of the nearly countrywide shutdown of business following the spread of the coronavirus across the country since December.
Seafood distributor and processor Da Yang Shi Jia Co (also known as Ocean Family), one of China’s best-known seafood firms, has received a CNY 34.2 million (USD 4.8 million, EUR 4.4 million) boost in the form of a government-arranged loan to help it manage through the coronavirus emergency. The loan, which came from the local Ocean and Fisheries Bureau, is being delivered through local state-run banks. Da Yang Shi Jia operates a major seafood import and distribution operation and has trawlers in Argentina fishing for shrimp and squid.
Zhoushan Zhu Tai Distant Water Fishing Industry Co. is another of the companies benefitting from the Chinese government’s policy of providing economic assistance to its major seafood firms. Zhoushan received CNY 47 million (USD 6.6 million, EUR 6.1 million) to help it manage cash-flow problems and run a fleet of 50 vessels and seven reefers, according to a statement from the city’s Ocean and Fisheries Bureau. Many of Zhoushan’s 563 distant-water vessels are based globally, but 17 “will soon be setting sail and back to work,” the statement said.
China’s banks have much at stake in Zhoushan, as in recent years, they have invested heavily in major seafood distribution projects there, including an industrial park, processing center, and consumer hub dealing in seafood from the city’s distant-water fleet. The hub, Zhoushan International Distant Water Base, last year secured CNY 600 million (USD 84 million, EUR 78 million) in a credit line from the Ocean and Agricultural Commerce Bank, a local lender owned by the city and regional government.
In Xiamen, the giant Minsheng Bank has weighed in to help traders at the giant Xia Sheng Market, who have struggled to sell stock. Bank staff are offering “more convenient” loan terms and extending the ratio of loans that can be secured on the borrowers’ property. Staff are also assisting vendors in making the switch to online sales by helping them set up stores on Weixin (WeChat) microblog and assisting the traders with marketing material and videos.
Across China, Communist Party logos have adorned propaganda efforts across the country as government seeks credit for containing the virus. The campaigns have stressed a return to normalcy, in some regions stating 100 percent “return to work” rates at seafood processing plants. But an executive from a Guangdong-based aquaculture firm with operations in Guangxi told SeafoodSource said a return to full production has not yet been achieved.
“Aquaculture companies continue to have problems in getting products out and feed in,” an executive from a Guangdong-based aquaculture firm with operations in Guangxi told SeafoodSource.
Others in the industry are worried about the potential damage the Chinese government could do by widening the list of animals they are allowed to legally distribute for consumption. Numerous wild species, including frogs and reportedly live deer, were sold at a seafood market in Wuhan believed to be the epicenter of the outbreak – a practice that has been widely criticized.
But a proposed new nationwide list of amphibious species banned from sale in wholesale seafood markets could do major damage to aquaculture farmers and feed companies, according to one feed company executive in Guangdong, who supplies feed to farmers of frogs and alligators in several southern provinces.
China has had bans on selling many wild animals dating from 1988, but enforcement has varied by region. Industry executives have said they expect stricter bans on what species are allowed to be sold in Chinese markets, and that rules already on the books will be enforced more rigorously than before. Search engine Baidu, which operates services similar to Google, has come up with a map of seafood markets across the country noting which markets ban the sale of wild animals. There’s been a daily increase in the number of markets registering, with several hundred now listed, according to Baidu.
Government has suggested only the bullfrog (Rana catesbiana) and pig frog (Rana grylio) be exempted from the ban, while farmers of the native giant spiny frog (Quasipaa spinose) have also sought permission to continue sales. But likely to be banned is the farming and sale of “Thai frogs” (Rana tigrini cantor), which is worth CNY 800 million (USD 112 million, EUR 104 million) per year in Hainan Province, according to the executive, who calculates 70,000 tons of feed are supplied each year for the 70,000 tons of frog meat produced.
Companies currently distributing feed to the frog farms include the Tianbang Group (also known as Techbank Co.), an animal feed giant with increasing ambitions for the aquaculture sector.
“The industry faces [a] wipe-out,” Li Yuan Yu, head of the aquafeed research department at Hua Nan Agricultural University in Hubei, wrote in a blog post.
Photo courtesy of TK Kurikawa/Shutterstock