City ambitions mean Chinese production stays strong despite scares

By William Hao Wei Yang

- Last updated on GMT

Related tags: Industry

Yantai, in eastern China, is among the country's food production frontrunners
Yantai, in eastern China, is among the country's food production frontrunners
In spite of a lingering undercurrent of suspicions toward food made in China after a high-profile series of scares there, the country's domestic food and beverage production continues to grow. 

Indeed, according to one analyst, Viktorija Korsakiene of Euromonitor, the research agency, the country will account for 40% of global production by 2020. China is especially strong in the manufacture of pastas, starches and animal feeds. 

So how is this growth becoming apparent? “China has realised its strength in food and beverage production, and many cities are making it their primary focus​,” said AJ Hu, chairman of market analysts The JLJ Group.

Municipal ambition

In recent years, several municipalities across China have been focusing on developing their food production industry. Yantai City in Shandong Province is one of the most successful examples of these, having developed its own fast-growing food production industry, and is known as “the City of Food​” throughout China. 

According to Hu, Yantai’s success lies in its rich resources and strong connection with international markets, especially Japan and South Korea. Its city government foresees Yantai’s potential to become a regional hub of food production, and has laid out a comprehensive plan for its food and beverage industries. 

We focus on production techniques and the quality of food​,” said Jun Wang, director of consumer service at Yantai City Government. “We also provide a lot of financial and legal support to the food and beverage industry. These are the keys to our success​.” 

The city is planning to integrate its technical, regional and material advantages and establish a multi-trillion-RMB food production industry by 2017. Ultimately, it wants to establish its own “brand​” in domestic and international markets. 

International markets

Hu believes that efforts from cities across China contribute tremendously to the country’s overall growth in food and beverages production. Breaking into national and international markets is the shared interest of food production industry across China. Establishing provincial and national research centres to improve production techniques and conduct research has become a trend in China. 

These research centres focus on innovating production techniques and enhancing production efficiency​,” said Hu. “They also look at brand management and aim to build up international reputations​.” 

In addition, China is also looking to establish a sustainable economic model for the food production industry. The model hopes to build a cyclical process that will reduce food and material waste while make the best use of those wastes. 

They want to completely transform the structure and nature of China’s food industry​,” said Da-Wei Gao, as former director of the school of light chemistry and food science at South China University of Technology . “The model engages with private businesses and makes them key players in the system​.” 

However, both Hu and Gao remain conscious of the impact of recent food scares on China’s food and beverages industry, and believe that further efforts to ensure safety during the production process is necessary to maintain continuous success in food and beverage production. 

China’s F&B growth relies on its continuous urbanisation and there is huge potential in its production industry​,” said Gao. “The ultimate goal is having more big corporations gathered in major cities across China. This can have tremendous impact on strengthening the country’s international market share​.”  

Related topics: Markets, East Asia, Industry growth, China

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