China's exports of agricultural, forestry, and fishery products are an important component of overall trade. China does support the production and processing of major agricultural products through direct support and through support for investment projects, but does not have coordinated, focused, or centrally directed market development programs to expand exports of these commodities. No estimates of funding for market promotion were available.
Various government organizations are often involved in China's export promotion efforts. The China Council for the Promotion of International Trade (CCPIT), its sub-councils at the national level (including one for agriculture), and the provincial and municipal branches of these sub-councils sponsor trade fairs in China and in foreign countries in order to attract investment and to promote exports, including agricultural and food items. CCPIT receives funding from the central government for its activities, and the agriculture sub-council is part of the Ministry of Agriculture.
At the provincial and municipal level, foreign trade commissions may be involved with export promotion activities. Nominally part of the Ministry of Foreign Trade and Economic Cooperation, these commissions serve the interests of the local government. Local trade fairs and occasional trade missions to other countries are typical activities. The Canton (Guangzhou) Trade (Export) Fair, a twice-yearly event, is one such venue for China's exporters of agricultural and food products to promote their items. The state group that exports China's walnuts completes a significant portion of their yearly sales at this fair. Modeling the success of this export fair, other provinces in China are also establishing trade fairs for the sole purpose of exporting a wide variety of products, including agricultural and food products.
Despite the recent reforms that have contributed to a more open market environment, state trading enterprises still dominate the agricultural and food sector. China's exports of bulk commodities and traditional products like tea and silk are handled by state trading corporations. No expenditure information on promotions by these organizations is available. The Agricultural Trade Officer in Korea reported the presence of a grain marketing (CEROILS) office. Staff in this office provide trade services and market information to Korean buyers of China's grain.
The development of a food processing industry in China and the interest in expanding exports of a variety of intermediate or consumer-oriented food products could lead to a more sophisticated market development program in the future.
Developing export markets for Chinese products also is the goal of investment projects designed to increase the quality of agricultural and food commodities. These are most often local initiatives that target a specific industry or potential market. Zhejiang Province, for example, earned $400 million from exports of agricultural products following the introduction of improved seed strains, advanced technology, and the establishment of high-quality production zones. Many of these projects involve foreign investment and are set up explicitly for export, often using the foreign partner as the conduit. If market promotion activities are conducted, they will likely be handled by the foreign partner or other private entities.
China is a major importer as well as an exporter of agricultural and food products. Foreign competitors have stepped up their market promotion activities over the past few years in the Chinese provinces of Guangdong and Shanghai. This is most evident by the increased presence of EU, Australian, New Zealand, Canadian, and Asian companies and government trade promotion agencies at food and beverage shows. High profile national pavilions at such shows often are government-assisted. Competitors are also stepping up supermarket and hotel/restaurant promotions with Australia being the most active in Guangdong Province.
Canada was the largest supplier of wheat to China in 1994/95, accounting for 45 percent of China's imports. The Canadian Wheat Board (CWB) works in conjunction with Canada's International Grains Institute (CIGI) and the Canadian grains industry to promote Canadian grains and grain products in China. In 1994 and 1995, Canada conducted a malting and brewing technology program for Chinese maltsters, a milling technology program for wheat millers, and a symposium on the characteristics of Canadian wheat and malting barley. In addition, the Canadians hosted Chinese grain buyers, millers and brewers along with their counterparts from other countries at international promotion seminars in Winnipeg, Ontario.
The Australian Wheat Board (AWB) and other Australian producer boards also are active in the China. The AWB maintains its interests in the Chinese market through a combination of investments, market promotion and a long-term agreement The AWB holds an 8-percent share of Southseas Grains Industries Limited, the owner of the Shenzen flour and feed mill. In 1995, the AWB contributed an additional $680,000 to the firm, which, when added to funds from the AWB's partners, will be used to double the mill's capacity to 600 tons per day.
The AWB has been central in bringing together a consortium of Australian companies to bid for major projects to upgrade China's grain handling and storage infrastructure. The World Bank is providing almost $500 million in financing over the next five years towards $1 billion worth of projects. A total of 28 project tenders will be called. The first was for the Beijing Central Grain Depot, for which the AWB consortium, comprising the AWB, Transfield and Baulderstone Hornibrook, submitted a bid in July 1995. The consortium will selectively bid for the remaining 27 tenders as they are called over the next 12-18 months. While the AWB is aiming for an immediate financial benefit from successful tendering, it is also seeking marketing opportunities in China in the longer term. With the likely deregulation of the grain industry in China, the AWB sees it necessary to develop alliances at the provincial level, where grain import decision will be made in future.
The AWB is looking at end product manufacturing opportunities arising from the World Bank projects. During the year the AWB consortium moved to strengthen its position in the projects, with visits to China, hosting of Chinese delegations to Australia and providing Australian technology to design plans. Finally, the AWB signed a long-term agreement with China in December of 1995 which commits China to purchase 3 million tons of Australian wheat between 1996 and 1998
Australia does not neglect the promotion of high-value products in China. The Australian Meat and Livestock Corporation conducts a promotion activities in China, including participation in trade shows and Australian food promotions. The Australian Horticultural Corporation conducted fresh fruit promotions in China, including in-store demonstrations, trade fairs, and public relations.
In 1994, the International Wool Secretariat (IWS), an organization to promote and conduct research for the wool producers of Australia, South Africa and Uruguay, developed a special marketing program for China to build market share for wool apparel carrying the IWS brand, Woolmark. A TV advertisement aimed at the increasingly fashion conscious young Chinese consumer appeared in Beijing, Shanghai, Guangzhou and seven other major cities. The TV campaign was supported by press advertising and promotions developed in conjunction with IWS retail partners.
In 1994/95, the New Zealand Dairy Board signed a memorandum of understanding with China for the development of a jointly-owned dairy production facility. The promotion arm of the New Zealand Wool Board, Wools of New Zealand, focuses on specific textile sectors for promotions. In China, Wools of New Zealand recently targeted the market for knitting yarn for promotional activities.
China also is considered a "priority" country for trade by the French Ministry of Foreign Affairs. Since a bilateral meeting in Beijing in 1994, French seed companies have worked with their counterparts in China to promote joint projects to encourage sales of French planting seeds in China. In addition, the French cognac industry is reported to spend up to $20 million for promotions in Guangdong province. (These are not included in Table 1 because they represent the efforts of individual corporations.)