Huge government subsidy given to build state-controlled Chinese squid processing hub

Published on
January 31, 2019

The world’s largest cuttlefish processing center will be built in the Chinese east coast fishing port of Zhoushan, according to officials involved in the project.

The plans were announced by leaders of China Agricultural Development Zhoushan Long-Distance Fishing Industry Co. Ltd. at an event marking the restructuring of the company to focus on global cuttlefish and squid stocks.

The firm is a subsidiary of the Agricultural Development Co, the giant conglomerate managing key government agricultural and fisheries companies including the China National Fisheries Corp (CNFC). The new entity will focus on molluscs and avoid competing with sister-firm CNFC, which is also a shareholder in the new entity.

Company CEO Zhou Zhang Fan officiated at the event alongside Zhao Gang, the secretary-general of China Distant-Water Fisheries Association, and CNFC Chairman Zong Wen Feng. Also in attendance were a range of other city and Communist Party officials. 

The announcement of the processing center appears to be the end-result of huge financial assistance from China’s central and state governments. A congratulatory briefing document prepared by Zhoushan’s municipal government for the event showed the Zhejiang provincial distant-water fleet caught a larger volume in the first 11 months of 2018 than it did in the whole of 2017, thanks to modernization of the fleet paid for with government subsidies. Zhoushan is the largest fishing port in Zhejiang Province.

The province’s 44 distant-water fishing companies together upped their catch 6.3 percent in volume terms to 526,000 tons, while raising it five percent in value terms to CNY 6.3 billion (USD 935.7 million, EUR 818.3 million). The percentage of the catch brought back to Zhejiang, at 463,000 tons, was up 5.4 percent on the 2017 figure.

The fleet has pocketed CNY 1.4 billion (USD 208 million, EUR 181.9 million) in national government subsidies since 2012, while local government subsidies of an additional CNY 154 million (USD 22.9 million, EUR 20 million) have helped guide private investment of CNY 610 million (USD 90.6 million, EUR 79.3 million), according to the group.

The catch hit an historical high in 2015 but fishing firms were faced with squid prices “as low as cabbage,” according to the briefing document. As a result, Zhoushan’s local fishing firms created an alliance to ensure squid supply is managed better in the future to support higher prices.

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