China opens more cities to international business

By Mark Godfrey

- Last updated on GMT

Perhaps the biggest winner of the new open regime is the south-westerly city of Chongqing
Perhaps the biggest winner of the new open regime is the south-westerly city of Chongqing

Related tags: International trade

China has been delivering on promises to open more cities to international trade, allowing meat importers to cut freight costs and get meat to hugely populous central regions of the country.

The huge city of Zhengzhou in central China made much of the recent decision by China’s quarantine body, the Administration of Quality Supervision, Inspection and Quarantine (AQSIQ), to conduct Customs checks for meat imports.

But perhaps the biggest winner of the new open regime is the south-westerly city of Chongqing, one of China’s largest metropolises and surrounded by the province of Sichuan, one of China’s most populous provinces and best economic performers. The Liangjiang New Area has become a base for processing imports, with new Customs offices and storage bases built here.

Celebrating the announcement of "formal permission"​ to the city’s AQSIQ offices to process imports of fruit and meat, the official Chongqing Daily,​ published by the local government, predicts that imports of meat will rise, as these will be "more affordable and fresher"​ due to direct arrival in the city, rather than having to be trucked from coastal ports like Guangzhou.

Local meat trading firms are also predicting larger volumes: local meat trader Chongqing You Shi Ye Co points to 20,000 tons per month of chicken, while Hainan Shun Teng claims it imports 200,000 tons of meat per year. Lamb is in demand, says Ma Jun, a company sales official, who explains: "There are 20,000 hot pot restaurants in the city, which together use 30,000 tons of meat per month, of which 20,000 tons are imported."

With 25 million people within its own boundaries and another 100 million spread out through hinterland provinces, Chongqing consumed 9.4 million tons of pork and 1.9 million tons of poultry as well as 625,000 tons of beef and 630,000 tons of lamb in 2013, according to data published by the city’s government.

China’s inland Customs ports are also opening up to imports of perishables like meat, thanks to huge investments in recent years in logistics infrastructure: next month Tianjin Xinggang Logistics Co will open its 11,300sq m refrigerated warehouses in Ningbo’s export-import reform and demonstration zone. Also building a logistics facility in the zone is Hong Kong-based Taihu Group (also known as Taikoo), which is building a 100,000-ton refrigerated storage capacity, set to open in December this year.

Pork giant Shuanghui brought 2,217 tons of American pork through the bonded zone last autumn in the south-eastern coastal city of Ningbo, as part of a deal that makes Ningbo port a "strategic partner"​ of the meat company. Imports of beef and lamb from Australia and New Zealand, meanwhile, are also helping to drive three-fold increases in throughput of imported meat in 2014, according to Ningbo AQSIQ officials on the city’s official Weibo microblog.  

There has been considerable pressure from state food trading conglomerates like COFCO to open ports across the country, so as to cash in on demand for food and wines among consumers in inland cities, with fast-rising incomes. Opening ports also helps ease congestion at ports in major cities like Guangzhou and Qingdao. Local governments often have ambitions to become ports of entry, eyeing up the duties and other revenues to be collected from processing imported foodstuffs.

Other inland cities that have announced the rights to import meat directly include the auto-making hub of Wuhan, on the Yangtze River, which, like Chongqing, has become prosperous as a lower-cost base for manufacturers seeking lower-cost locations. Port authorities in Wuhan claim direct imports save 30% of the costs involved in transport and chilling.

Related topics: Meat

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