Chinese seafood hubs see seismic economic shift

China’s seafood hubs are undergoing a potentially critical economic shift, as shipment and export fall while wages stagnate.

China’s traditional base for seafood processing, Liaoning Province, has seen shipments fall again in the first two months of 2016. Shipments fell 11 percent in volume terms while exports in value were down 8.5 percent. The figures are unprecedented for Liaoning – home to the port of Dalian – but mirror similar falls in the overall Chinese export figures for 2015 on a national level.

There is some potential good news for Liaoning, however: the inexorable rise of Chinese factory wages could be a thing of the past. Wage rises of 7.2 percent in 2015 will fall to below 7 percent in 2016, several economists at Chinese state banks are predicting. That would make China more competitive in labour-intensive manufacturing and processing industries like seafood processing and aquaculture. But if the trend continues, it will reduce the incentive among Chinese consumers to spend, and that would be bad news for seafood sales.

The government of Guangdong Province, the location of many Chinese shrimp and tilapia farming and processing operations, has announced it will freeze minimum wage levels for two years. The province, like many others, had been granting increases of around 15 percent every year over the past decade in local minimum wages in a bid to raise the spending power of workers, many of whom send wages back to their rural homesteads.


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