What are the factors behind future rise in seafood consumption?
New openings of high-end hotels and restaurants continue to drive consumption of seafood in China, with western style seafood buffets targeting middle class consumers growing in popularity.
Certainly, China’s appetite for seafood looks as healthy as ever if you’re at the Ritz Carlton hotel in Beijing’s financial district on a Friday evening.
New Zealand green oysters, Boston lobster and Canadian crabs were all prominently displayed at the CNY 575 (USD 92.20, EUR 67.64) per head seafood buffet at Greenfish, a large restaurant at the Ritz Carlton in the city’s banking strip. “Seafood is a great marketing tool, you say you have these oysters or this imported fish and they’ll come…our customers really come out for seafood,” said Ashley Li, hotel marketing co-manager.
A capacity crowd for the weekly Friday night seafood buffet, featuring Chinese favorites like chilled sea conch in XO sauce but also more western creations like mango and crabmeat salad and salmon wellington. “Our customers are keen if the dish is healthy,” explained Ben Peng, sous chef whose kitchen assures customers than no MSG or other flavoring is used in the dishes. He said salmon remains in high demand, while snapper and baked cod are also current crowd pleasers. Greenfish will next month introduce a Sichuan-style seafood pizza.
Seafood is prominently used in the advertising of dining options at high-end restaurants in recently opened luxury hotels in Beijing. One of the recent openings is the Zijin Mansion, in the Waldorf Astoria’s new Beijing property — appropriately located on Jinyu (homonym with the word for tuna) St. With its walls of silk and deep carpets, this Cantonese eatery serves up shrimp starters for CNY 158 (USD 25.33, EUR 18.59) and a pan-fried cod filet for CNY 228 (USD 36.56, EUR 26.82).
A government crackdown on official waste has hurt the earnings of luxury restaurants in China but doesn’t appear to have dented seafood consumption in restaurants targeting the middle classes and privately wealthy. Corporate dining has not been affected by the corruption clamp-down, said Li at the Ritz Carlton.
Catering revenues for the Beijing municipality declined 5 percent in 2013 year-on-year to CNY 78.3 billion (USD 12.6 billion, EUR 9.2 billion) — though retail sales rose 8.7 percent. The catering association puts the 5 percent slip down to a crack-down on spending on luxury dining. Or could it be that food price inflation slipped by 1.9 percent year-on-year: it was up 4.7 percent on 2012. Nationwide, catering consumption picked up in the first quarter of 2014, up 9.8 percent year-on-year.
Economists in Beijing believe there is further economic growth to come, which will drive consumption further. “China if it continues to grow at 7 percent annually will continue to be the most important driver of global economic growth for years to come,” said Xiang Bing, founding dean and professor of business at the Cheung Kong Graduate School of Business in Beijing.
There’s more growth to come says Xiang: further deregulation of industries like finance, healthcare and telecoms can pay dividends for years: the U.S. spends 18 percent of GDP on healthcare, China spends less than 6 percent but is trying to increase that, said Xiang. He thinks this will create much more private wealth, and consumption.
China can rev up growth because its urbanization rate is 42 percent whereas the US and Brazil are both at 85 percent, believes Xiang. Likewise the service sector accounts for 46 percent of China’s GDP in 2012 — the U.S. got 80 percent of GDP from services in that period, said Xiang.
Openings of new hotels — a new InterContinental will open in downtown Beijing later this year — will continue as the Chinese economy grows. Long-term, Xiang believes “China is not rising as much as returning to its historical position in the world order...in the 1820s over 30 percent of the world GDP came from China, at that time more than the GDP of the EU and U.S. combined. It has gone from 2 percent in 1978 to 12 percent currently...so there’s a way to go yet to get back to where China was.”