New Chinese-Russian trade deal bodes well for seafood
Chinese authorities are hailing a major breakthrough which could effectively double the number of seafood companies certified to export to neighboring Russia. The Certification and Accreditation Administration of China (CNCA) says it’s secured a green light for 172 Chinese seafood processing companies to export seafood to Russia by the end of the year. Russia continues a ban on imports of seafood from most western nations but is a major customer for Chinese frozen filets.
The new deal also promises access for a further 102 firms once Moscow secures the approval of partners in a free trade zone it operates with several former Soviet states. One of two Chinese government bodies – the other is the General Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), which monitors and licenses the country’s exports and imports – the CNCA has stated that “the biggest breakthrough for years” has been achieved following months of talks with the Russian government’s Federal Service for Veterinary and Phytosanitary Surveillance (also known as Rosselkhoznadzor). According to the deal, the Russian side will publish the list of 172 firms within 30 days and will add an additional 106 firms “as soon as possible,” according to the CNCA.
In its statement on the deal, Rosselkhoznadzor stated “172 Chinese fish-processing plants have been just approved to export to Russia on the basis of guarantees provided by the Chinese side pursuant to the mutual commitments stipulated by the Protocol of the 4th Meeting of the Permanent Russia-China Working Group on Cooperation in Veterinary Surveillance, Phytosanitary Control and Food Safety.” A decision on including 102 more plants in a List of Approved Exporters “will be made after a corresponding agreement is achieved with the competent authorities of the Eurasian Economic Union,” according to Rosselkhoznadzor. The EEU is a free trade zone established by Russia with former USSR states like Kazakhstan.
According to Rosselkhoznadzor more than 450 Chinese businesses are approved to export fishery products to Russia, while more than 700 Russian food operators are approved to export seafood to China. The CNCA statement hails the deal as a boost for Chinese seafood exports which are currently suffering from weak western demand. “Before it was really difficult for our seafood companies to get certification for the Russian market, this really impacted our international seafood trade.” While Russia ranks as China’s sixth largest market, China has become Russia’s second largest source of seafood imports, much of it fish filets, some of it cod and pink salmon re-exported to Russia after processing in China.
Upbeat political relations have led to openings for Chinese business in Russia, which in turn supplies natural resources to China. Access to Russia may offer a bigger prize for China’s processors and traders, who have long eyed the potential of a free-trade with Russia in opening access to the aforementioned Eurasian Economic Union, a Moscow initiative which includes Russia, Armenia, Belarus and Kazakhstan, a market of 171 million people.
There are formidable challenges to entering Russia however. Logistics is a big challenge for Chinese processing companies such as Chinese Longkou Sanming and Fulejia International which ship to Russian retail chains such as Magnit from its plants in northern China: more than 75 percent of the Russian population live in urban areas but 70 percent of the population is also living west of the Urals – far away from the vast Siberian region bordering China. Current economic challenges and gradual population decline meanwhile have both worried exporters about the sustainability of Russian demand.
China has also been able to use its closer relationship with Moscow to get better access to Russia’s far eastern waters, a key source of fish for China’s processing plants. Two new vessels were launched by Dalian Xiang Hailin Long Distance Fishing Co. as part of a four-vessel fleet to ply the Russian seas under a cooperation deal signed during a meeting between Chinese and Russian fishery officials in 2014 in Beijing.