Faced with local government debt worsened by the Covid-19 pandemic, Chinese municipalities have been searching for sources of income and economic growth, leading the local government Harbin, a city in northeast China, to launch a new railway transport line to foster seafood trade with Russia.
A cold-chain railway connection between the port city of Vladivostok, Russia, and the inland city of Harbin will enable the neighboring nations, which have bolstered their relationship as the Ukraine war has realigned global trading patterns, to develop an effective seafood-processing chain, said Cui Yirui, deputy director of the Management Committee for the Harbin Comprehensive Free Trade Zone.
Cui was one of several officials who spoke at an event marking the first service of the new rail line, which featured a train carrying 300 metric tons (MT) of frozen pollock. A Harbin city plan, announced by Yirui, to fortify a CNY 10 billion (USD 140 million, EUR 120 million) processing industry within three years is ambitious given the challenges besetting the industry, such as overcapacity in traditional processing hubs like Dalian.
Nonetheless, Harbin – traditionally an entrepot for Sino-Russian trade – is looking to cash in on increased trade and energize the Chinese whitefish-processing industry. To do so, Harbin customs authorities are willing to cut through red tape by providing “tailor-made customs clearance” for the new rail line, according to Zhang Lei, deputy director of the Xiangfang Office of Bingcheng Customs. Zhang promised that his office would arrange special personnel to track the status and arrival of goods while also speeding up their customs clearance.
Harbin, by contributing to the nationwide trend of provincial officials tapping the seafood industry for growth, wants to expand its role as a trade hub with Russia, said Cao Lanxia, who is the Russia Trade Department director at the Chinese Municipal Bureau of Commerce. According to Lanxia, the city would “expand the types and quantities of Russian seafood” imported to Harbin and intends to ship frozen and processed vegetables to Russia in returning trains.
Commonly regarded as part of the Chinese rust belt, Heilongjiang – the region within which Harbin resides – is in itself a significant agricultural producer, with companies in the region having established farming operations in Russia previously.
Due to healthy political relations between the neighbors, bilateral seafood trade rose 80 percent in the first quarter of 2023, according to Robin Wang, the head of seafood marketing agency SMH International in Shanghai, and may rise further due to continued infrastructure investments such as the rail line.
“Russian seafood is getting popular in China, including king crab, snow crab, and pollock,” Wang said. “Russian seafood is competitive in price in China, and this will influence the overall imported seafood market in China.”
Overall, Sino-Russian trade rose 38.7 percent year over year in the first quarter of 2023. It’s unclear, however, whether there is demand for more processing capacity in the export-focused Chinese pollock processing sector due to weak Western demand.
China’s imports of Russian fish sank from 1.13 million MT in 2019 to half that figure in 2021, largely thanks to the Covid-19 pandemic, before recovering somewhat to 886,237 MT in 2022. China’s processed seafood production, meanwhile, totaled 21.3 million MT in 2021, up from 20.9 million MT in 2020. In 2021, total seafood sent for processing amounted to 25.2 million tons, up 1.8 percent year over year.
Overall Chinese seafood imports surged in 2022 to 4.1 million MT valued at USD 18.7 billion (EUR 16.6 billion), up 22 percent and 35 percent, respectively, from the previous year. China’s seafood exports in 2022 remained stable at 3.5 million MT, nearly unchanged total from the previous year.
New logistical options for exporting to China are being welcomed by Russia’s seafood industry, but Russian media reports suggest that port and rail infrastructure is struggling to keep up with the surge in bilateral trade. A recent report in the Moscow Times indicated low levels of investment in Russian logistics infrastructure may be suffering from the Ukraine conflict, which could make future Chinese investors nervous as the conflict drags on.
Photo courtesy of Ice City Plus
