As part of our special series “The Big Picture,” a look at China’s obsession with food.
CGTN’s Greg Navarro looks at how Australia is helping feed the demand for beef among China’s growing middle class.
Once the deliveries arrive at a Sydney warehouse, they are stacked inside a freezer where, on this day, Raymond Hou inspected the contents.
For years it was butchered and then sold domestically to hundreds of Sydney restaurants. When Hou joined the company, he brought his experience of exporting produce—and an idea.
“A lot of friends and family from China were asking for beef at the time,” says Hou. “That was before the free trade agreement, and the information that we got was there is not enough beef in China.”
Now, a growing percentage of the business is focused on meeting a section of China’s demand—especially the growing taste for premium Australia beef among China’s rising middle class.
“A lot of them out there are quite wealthy so they are looking for healthier options,” explains Hou. “They are looking for better options and they don’t mind paying for it.”
An increasing number of Australian agricultural companies are taking advantage of the country’s clean and green reputation in China. Exports to China have become an integral part of many businesses, which are having a huge impact on the industry.
“I can give you two really concrete examples,” says Jim Harrowell, the New South Wales Special Envoy to China.
“If you look at salmon exports from Tasmania, between 2012 and 2016 they grew from just under $3 million a year to $45 million dollars. That’s a big number.”
The goal of meeting China’s growing food markets has increased Chinese investment in Australian agribusinesses, which totalled $1.2 billion AUD in 2016. That same year, Chinese company Moon Lake bought Australia’s largest dairy firm VDL Farms.
Now the company plans to export directly from Tasmania to China, a move that will ultimately benefit other Tasmanian companies.
But experts point out that it is impossible for a country with less than 25 million people to meet all of the food needs of China’s more than 1.3 billion people.
“Our former trade minister Andrew Robb said that it was rubbish to even imagine that Australia could become the food bowl of Asia,” says James Laurenceson, deputy director of the Australia-China Relations Institute.
“But it certainly could become the delicatessen of Asia, so really targeting those high value added outputs.”
For Australia, that means targeting a relatively small but growing slice of China’s demand: the premium food market.
One of the biggest challenges is the increasing competition for China’s business from other countries, including the United States.
China recently lifted a 14 year ban on premium beef exports from the U.S. Experts said that means smaller countries like Australia will have to work harder and better educate Chinese consumers.
That also means Australia’s agribusinesses need to ensure what they export meets that demand.
While Australian agricultural businesses are focusing on meeting China’s specific needs, some Australian researchers are working toward the bigger picture of global food security.