Expenditures and Activities of
Most of the money China now spends on agricultural exports is aimed not at building long-term markets, but rather at reducing large stocks resulting from China's domestic price-support program. Chinese agricultural policy has traditionally focused on improving production in corn, rice, wheat, and cotton production. Promoting agricultural exports is a relatively new idea for China.
Gradually, particularly at the provincial level, many government officials are seeing the potential of market-driven agricultural exports. These officials believe that the greatest potential for growth is in Asian markets including Japan, Korea, and Hong Kong. They want to capitalize on China's advantages in proximity and labor costs. They have increased exports of labor-intensive products, such as processed chicken and apples to neighboring countries. The government has great hopes for foreign joint ventures.
China does not have a large agricultural export promotion program. On the national level, the China Council for the Promotion of International Trade (CCPIT) promotes Chinese exports in general. It has a subgroup which focuses on agriculture. This group sponsors overseas trade events, such as Chinese pavilions at trade shows and presentations on products. According to contacts within the CCPIT, its total agricultural promotion budget is only about $500,000, with no permanent staff overseas.
Chinese provincial and local governments are active in export development. Their focus is mainly on developing export industries in their jurisdictions. They sponsor trade events overseas to attract investment in export-oriented industries, rather than to promote products. These provincial and local governments, however, have been important in identifying and developing new agricultural exports, that are increasingly competitive with U.S. exports.
Most U.S. competitors realize China's importance as a potential market. Large embassies in China have sections devoted exclusively to agriculture. Their focus tends to be trade policy and development issues, but they also typically spend a quarter of their time on trade servicing and promotion.
The major agricultural export promotion programs in China are run by Australia, Canada, France, and New Zealand. Other countries with significant programs are: Chile, Norway, the Netherlands, Italy, Denmark, Thailand, and Spain.
Activities include seminars and other in-country training, trade shows, trade missions, and educational visits back to the third country. They also conduct retail and food service promotions.
The New Zealand Dairy Board has the largest dairy promotion program in China. It promotes all types of dairy products for both food and feed, using seminars, trade shows, literature, and technical assistance. New Zealand spends an estimated $500,000 on promotional activities in China, with a sales force of 20 people. New Zealand has a $100,000-merchandising program for apples that includes advertising, in store promotions, display materials, and free merchandise.
The Canadian Wheat Board, with an annual budget estimated at $600,000, has an office in Beijing which holds technical seminars and sponsors trade missions. The Canadian Meat Export Federation's estimated China budget of $145,000, conducts retail promotions, sponsors small trade teams, runs food service promotions, and maintains an office in Shanghai. Canada also has a small trade servicing program for pork.
The annual Chinese promotion budget for dry peas of approximately $80,000 is spent primarily on reverse trade missions. Unlike the United States, the missionís focus is on the feed use of peas rather than food.
The Australian Wheat Board has a significant export promotion program in China. The Australians have an office in Hong Kong which has a trade service budget, holds technical seminars, and sponsors trade missions. Wheat promotions total $800,000.
The Australian Meat and Livestock Corporation, with an estimated annual budget is $70,000, provides chef seminars and participates in the Food and Hotel China trade show. It also conducts two to four food service promotions each year in various Chinese cities. It does not stage retail activities.
The Australian Dairy Board reportedly spends $400,000 on promotions. Like New Zealand, it focuses on seminars, trade shows, and technical assistance. Like New Zealand, it does not have a sales force in China.
Austrade, the Australian Trade Commission, has an extensive presence in China. Austrade has large facilities headed by officers with diplomatic status, as well a network of consultants in key regional commercial centers. The consultants develop a network of business contacts and provide expertise for Australian companies entering the market. They also assist companies competing for government contracts. As it operates primarily on a fee-for-service basis, Austrade can maintain its extensive network of consultant-managed offices in China without huge government expenditures.
France's Sopexa sponsors a two-person office in Beijing devoted solely to wine promotion. It's estimated budget is $2 million. Activities include trade shows, seminars, reverse trade missions, and restaurant promotions. Sopexa also spends roughly $80,000 on dairy promotions in China, primarily on trade shows and trade missions for cheeses and other processed dairy foods. France's Cerealiers has a Beijing office and work closely with the Chinese Government. Recently it spent an estimated $25,000 on a cooperative equipment development project and $50,000 to train three Chinese officials in France. It's annual budget is estimated at $500,000.
The Norwegian Seafood Export Council opened its Beijing office in 1998 as a section of the Norwegian Embassy. Its staff are recognized as embassy personnel, a prestigious designation in China. The Seafood Export Council has a large salmon program. It spent an estimated $4 million in 1998. The council gave technical seminars in nearly all of China's major cities, and provided advertising, and special nationwide promotions for the food service industry. It also participated in trade shows.
Competition is intensifying for China's rapidly growing wood products market. The government of Canada has provided loans and aid to support projects in the forestry, pulp and paper, and real estate sectors. New Zealand's Timber Board also develops contacts and networks in China.