China Increases Export Volume Despite Low Seafood Production

The U.S. Department of Agriculture's Foreign Agriculture Service published a report earlier this month that says more than 40 percent of China's seafood exports are processed using imported raw materials from the United States and other seafood-producing countries.

The report estimates 90 percent of U.S. seafood exported to China is shipped back to the United States after processing. The remaining 10 percent that stays in China ends up in high-end restaurants and hotels.

China is the world's largest seafood producer with 9,128 seafood processors concentrated mostly in port cities on the east coast, according to the USDA report, which estimates that in 2009, processed seafood exporters will take home a total profit of $5 billion.

USDA analysts say China has advantages that afford its processors to profit from using imported raw materials. With low labor costs, China can reap profit out of processing. Most seafood processing in China is done by hand, which means higher quality finished products and no depreciation on the machinery burdening processors.

China imports its seafood from the United States, Russia, Japan, Korea, Chile and EU countries.

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