A surprisingly positive newsflow suggests some of China’s seafood exporters have done better than expected in 2012. Even as China’s overall export growth has slowed in 2012, there’s been a slew of good news stories, like in Zhanjiang, a shrimp production hub in Guangdong province. Zhanjiang’s aquatic food exports to the EU and United States grew 15 percent in the first half of 2012, according to the Zhanjiang Foreign Trade & Economic Cooperation Bureau.
Positive news too came from the Yantai-based Shandong Zhanglu Oceanic Food Co., which reported exports jumped 40 percent year-on-year in the first eight months of 2012. The firm, which claims to be the first Chinese seafood exporter to appoint a director of quality control, ships processed tuna sashimi to Japan as well as cod and mackerel fillets internationally.
Seafood exporters in Jiangxi, an inland province known for freshwater lakes, have similarly reported good news this week. Shipments are up 30 percent, according to NongYe Ribao, an agricultural daily. Even amid weaker demand in Europe, exports were up 33.45 percent to 9,493 metric tons and USD 259 million in value terms, according to the newspaper.
The apparent success of seafood exporters looks all the more impressive given Xiang Songzuo, the influential chief economist of state-owned lender, the Agricultural Bank of China, has claimed the country won’t increase trade by 10 percent (an official target) in 2012.
The key to Zhanjiang’s success is its “cluster effect” — the presence of a value chain from seedlings to processing, explains Cen Jian, secretary general of the Zhanjiang Aquatic Products Import & Export Association. Nonetheless, he also says firms in Zhanjiang face several challenges, including rising input costs and stiffer food safety standards.
Zhanjiang Evergreen Aquatic Product Science and Technology Co. is securing food safety by establishing its own farming operations and supplying seedlings to contract growers.
Likewise, Long Tujing, owner-manager of the Xiashan Seafood Wholesale Market, the largest shrimp-trading market in Asia, told Guangdong provincial media that local shrimp producers are requesting more support from government in sourcing loans to promote exports. Central government has promised higher rebates on export taxes as well as better access to credit. Weaker export demand however means many firms are not in expansionary mode. “The problem is they don’t want the credit,” said Long.
The overwhelmingly small and medium (SME)-sized aquacultural processing and export sector has been deprived of credit. Only 3 percent of 10 million Chinese SMEs get bank loans according to Morgan Stanley China. The investment bank’s local CEO, Wei Sun Christianson, says even though SMEs create 60 percent of China’s GDP and 80 percent of jobs, credit remains tight because of a lack of credit information: China needs a clearer credit system of credit rating agencies and access to corporate governance and lawsuit filings, according to Wei.
China became the world’s No. 1 importer of agricultural products (including food and drink products) — imports surged 25 percent to USD 144.7 million in 2011, according to WTO data. It’s No. 6 in exports, worth USD 64.6 billions.
Guangdong provincial authorities have promised to improve Zhanjiang’s railway and highway connections as part of a plan to promote its aquatic processing industry while also improving protection of the seashore ecology. It wants revenues from the aquatic sector to grow by 13 percent annually.
