Chinese vessel sunk by Argentina had a history of fisheries incidents abroad

Published on
March 18, 2016

The Chinese trawler sunk by the Argentine navy earlier this week is owned by a state-owned Chinese entity with a track record of fishery incidents abroad. The Lu Yu Yuan 10 squid fishing boat belonged to Shandong Yantai Marine Fisheries Co., which is a subsidiary of the China National Fisheries Corporation (CNFC) – a giant state-owned firm in turn held by the China Agricultural Development Group Co., part of the Chinese government.

The Argentine navy sank the Lu Yan Yuan Yu 010 squid trawler earlier this week in Argentine waters near the port of Puerto Madryn in the province of Chubut. Puerto Madryn is a city of about 70,000 people in the province of Chubut in Argentina’s Patagonia region.

Yantai Marine Fisheries Co. has two dozen squid fishing boat in Argentina, Chile and Peru. The company also provides personnel, shipbuilding and seafood processing services and focuses on the Pacific Northwest, South America (primarily Argentina and Peru) and the Indian Ocean,according to its website.

Yantai Marine Fisheries Co., Ltd, with nearly 1,700 employees, is one of a myriad of CNFC subsidiary companies operating vessels and processing plants globally. Indeed, officials from the two firms have participated in annual meetings between Argentine and Chinese fisheries ministries.

In November 2004, Peru detained nine Chinese fishing boats, including five belonging to Yantai Marine Fisheries Co and two belonging directly to CNFC. A substantial fine was paid for their release. A further two CNFC vessels were confiscated by Ivory Coast authorities in 2014 for illegal fishing.

Seafood executives who spoke to SeafoodSource predicted further incidents due to a continued expansion in China’s overseas fleet.

“Boats like the Lu Yu Yuan typically do two-year stints abroad and crews are swapped once a year,” explained a Beijing-based executive who regularly does business with CNFC on behalf of Russian and western European clients.

CNFC boss Zong Wenfeng was one of several Chinese fisheries executives frequently visiting Argentina in recent years. He was bidding against fellow Chinese state-owned Shanghai Jinyou Deep Sea Fisheries Co for Altamare SA, a shrimp and fish catcher and processor in the port city of Puerto Madryn -- the port near where the latest incident occurred. Part of the state-run Shanghai Fisheries General Corp (Group) (SFGCG) conglomerate, Jinyou paid USD 21.5 million (EUR 19.1 million) for the Argentine firm.

CNFC, like its sister company China State Farms Agribusiness (Group) Corporation, is a subsidiary of China National Agricultural Development Group Corporation (CNADC) which also ultimately controls CNFC. Formerly known as the China Fisheries Joint Company, the firm started to sail into Africa waters in the mid-1980s. Today, it has boats and docking facilities in almost a dozen nations, most of them in Africa and southern Asia.

News of the sinking was lightly reported in China. While Chinese officials have expressed indignation about the sinking – certainly the Chinese Foreign Ministry spokesman at a regular briefing in Beijing made no effort to accept potential Chinese guilt in the affair – elsewhere, there has been a surprising degree of good-humoured acceptance that China’s fishing vessels have a record of unorthodox behaviour. On the popular social media platform Weixin, a user posting a brief summary of the incident from Mandarin-language Caixin magazine joked that even in Somali waters, Chinese trawlers aren't bothered by the pirates notorious present there. "The pirates don’t bother them, they treat them like brother pirates!” the commenter wrote.

Argentina has much at stake in the current incident. Chinese fisheries officials meet annually with Argentina's higher-ups to discuss aquaculture and fisheries technology. The two sides have also run joint fisheries technician training courses. However, Argentina’s new government may choose to take a different approach to its left-leaning predecessor which was keen to build a close trading partnership with China, a key purchaser of Argentina’s agricultural commodities.

That trade has benefited CNFC, easily China’s longest-operating fishery company and most recognizable fisheries brand. It focuses on catching species such as tuna, fin-fish, molluscs and crustaceans. But the company also processes cod, squid, shrimp and tuna and it has established a significant operation importing high-end seafood including Argentine red shrimp.

Assisted by China’s massive bureaucracy and network of embassies, CNFC and its subsidiaries have licenses to fish in several other countries. CNFC often operates through subsidiary or joint venture companies: in Senegal, it operates through a local subsidiary company known as Senegal Pêche, which has a 12-vessel fleet and also processes in-country. In Mozambique and Madagascar, the company fishes for shrimp under locally registered firms.

CNFC’s average annual fishing volume is officially 100,000 metric tons. The firm claims annual sales of USD 200 million (EUR 177.4 million), though it doesn’t state how much of that comes from ancillary services; CNFC has a strong logistics fleet as well as 120,000 tons of cold-chain logistics that it contracts to third parties.

Significant CNFC competitors include state-run China Poly Group Corporation, has built a new fish processing factory in Mauritania, partly in return for access to the nation’s waters. It also has operations in Ghana.

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