"Chengdu: An Up-and-Coming Market in Chinaís
"Chongqing: An Underdeveloped Market in Chinaís
"Focus on an Emerging Chinese Market: Kunming"
China wants to make it easy to trade with
Nanning is the capital of the Guangxi-Zhuang
Autonomous Region, which enjoys more independence and
self-governing rights from the central government in
Beijing than other Chinese provinces. The regionís deep
sea ports and location make it ideal for businesses
looking for new development opportunities in booming
Guangxiís strategic geographic position offers good
access to developing regions, key to the Beijing
governmentís agenda for national development. And with
the July 2005 signing of the FTA (free trade agreement)
between China and ASEAN (the Association of Southeast
Asian nations, consisting of Brunei Darussalam,
Cambodia, Indonesia, Laos, Malaysia, Myanmar, the
Philippines, Singapore, Thailand, and Vietnam), the
strategic and economic prominence of Guangxi and Nanning
are on the rise.
A shipload of imported soybeans arriving
at the port of Fangcheng
Photos courtesy of the FAS
Agricultural Trade Office, Guangzhou, China
With strategic support from the central government in
Beijing, an excellent location, transportation
development, and communication linkages with South China
and ASEAN, Nanning is poised to ride the crest of an
economic boom that will fuel consumer demand and attract
investment. ATO Guangzhou (the FAS Agricultural Trade
Office in Guangzhou, China) interviewed scores of
government officials, private-sector managers, and trade
sources who shared their insights about market
opportunities for U.S. agricultural products in Nanning
and its environs.
Infrastructure Development, Policies Fostering
Nanningís current and planned transportation facilities
are supporting its emergence as a gateway for trade and
shipping in South China and Southeast Asia. Guangxi is
the only province in Southwest China with direct access
to the South China Sea through Fangcheng, Qinzhou, and
Beihai, all deep-water ports that can accommodate
ocean-going vessels. Nanning is linked to the three
ports by highways.
In addition, Nanning Wuxu International Airport has
expanded and now handles regular flights between Nanning
and Bangkok, Ho Chi Minh City, Manila, Phnom Penh, Kuala
Lumpur, Jakarta, Seoul, and Singapore. Direct
railway access links Nanning with Chengdu and Chongqing,
the fastest-developing cities in Southwest China.
A Nanning Wal-Mart's import section
U.S. apples and oranges on sale in the store
A railway from Nanning and the three seaports is
under construction. In addition, the Beijing government
has approved construction of a two-lane, high-speed
electric railway between Nanning and Guangzhou. Plans
are also underway for rail and road links connecting
China and ASEAN nations into an economic corridor
running from Nanning to Hanoi, Phnom Penh, Bangkok,
Kuala Lumpur, and Singapore.
Guangxi also benefits from several favorable
government policies. The province is part of Beijingís
development policy, which aims to fast-track economic
development of Chinaís lagging rural areas. Guangxi is
included in the coastal area and border-opening
policies, enabling the province to develop international
trade links, which other Chinese coastal cities and
special industrial zones have used to achieve economic
growth in the past 15 years.
From an economic perspective, Nanning is relatively
undeveloped, ranking 86th on the nationís top 100 cities
list. But many investors view this as a tremendous
opportunity. Some even speculate Nanning will be the
next Shenzhen success story because both cities have
transportation links and logistics networks to support
Since the signing of the FTA, China and ASEAN have
been working to create a free trade zone. To that end,
the Beibu Gulf Economic Zone has been established to
serve as an international logistics, trading,
processing, and information exchange base that will be a
leading center for the China-ASEAN free trade zone. The
Beibu Gulf Economic Zone integrates Nanning; the ports
of Beihai, Qinzhou, and Fangcheng; and the
transportation and logistics networks of Yulin and
Chongzuo. The zone will enhance the flow of commodities,
capital, labor, and information among China and ASEAN
Soybeans are big business. Livestock is
in hot demand.
Opportunities Emerging for U.S. Agricultural
In calendar year 2007, Guangxi imported soybeans valued
at $850 million, an increase of 26.3 percent over 2006,
because the provinceís processing capacity has
increased. Most were crushed by two plants, one in
Fangcheng and one in Qinzhou. Both plants source
soybeans from the United States, Argentina, Brazil, and
China mainly purchases second-grade U.S. soybeans and
processes them into edible oil and soybean meal feed. A
trade source said that U.S. soybeans shipped through
Fangcheng average the 12-percent level moisture typical
of U.S. soybeans. Chinese feed mills traditionally
prefer U.S. soybean meal, which has a brighter
appearance than South American meal.
Through Nanning, the crushing plants supply South
China by rail and truck. The Fangcheng plant supplies
soybean meal and edible oil to the local Guangxi market
and to Chongqing, Guizhou, Hainnan, Hunan, Sichuan, and
Yuannan. It has also started to penetrate Vietnamís feed
In 2006, there were 40.4 million fattened hogs
slaughtered and 26.1 million raised on local farms. In
2004, a Nanning breeding farm imported 268 U.S. swine.
In 2007, it spent $2 million on 460 U.S. purebred pigs,
and plans to import more U.S. breeding swine in 2008.
ATO Guangzhou was told that U.S. crossbred offspring are
well received because of their appearance, rapid growth,
high fertility, disease resistance, and adaptability.
Guangxiís largest dairy company is headquartered in
Nanning and has a modern processing plant collecting
milk from more than 7,000 Holsteins. Its management is
interested in importing U.S. alfalfa hay and frozen
bovine semen to improve the herdís milk yield and
Given the countryís growing demand for improved
livestock production, importers can apply to Chinaís
Ministry of Agriculture for tariff exemptions on
imported livestock genetic products such as breeding
animals, frozen semen, and embryos. However, swine
industry importers generally prefer live animals, mainly
because they care more about an animalís appearance than
More development means more hotels and
opportunities to promote U.S. products.
HRI Sector Is Expanding
Nanningís HRI (hotel, restaurant, and institutional)
sector is expanding in line with its general
development. In 2007, the city received over 20 million
visitors, of whom 140,000 were from other countries.
The city has four 5-star hotels, six 4-star hotels,
and 66 other rated hotels; more are being built or are
in the planning phase. This expansion affords promising
opportunities to exporters of high-quality foods,
ingredients, condiments, and beverages. But local
importer/distributors of such items are still not well
U.S. wines have found their way onto many good
restaurant menus. But they face stiff competition from
French, Australian, Italian, and local wines. One
Western-style franchise restaurant in Nanning began to
offer U.S. halibut, black cod, and snow crab on its
regular menu after a successful U.S. menu promotion held
by the Alaska Seafood Marketing Institute and ATO
Guangzhou in 2005.
The import section of Beijing Hualian store
Washington apples on sale in the store
Beef steak is a best seller in Western-style
restaurants, which mostly use Australian beef for the
high end of the market and Chinese beef as a more
affordable option. Nanningís HRI sector has a strong
interest in putting U.S. beef back on its menus, once
China lifts the ban it has imposed since December 2003
upon discovery of bovine spongiform encephalopathy in
the United States. One proprietor noted that beef is his
restaurantís most popular item, and was confident that
U.S. beef would be one of top sellers on his menu.
U.S. food and wine exporters need to increase HRI
promotional efforts by showcasing their products in key
hotels and restaurants, investing in developing local
distributors to better represent U.S. products in
Nanning and surrounding areas, and conducting more
market research and analysis.
Retail Sector Is Growing, Too
In 2007, per capita disposable income of Nanning urban
residents reached $1,800, up 15.2 percent from 2006.
Their total retail spending reached $7.4 billion, up
18.4 percent. As Nanningís economy grows, its retail
sector is following suit.
Nanning has two Wal-Mart stores, one of which opened
in September 2007. Wal-Mart sources all of its imports
through its Shenzhen headquarters, and sells a number of
U.S. fruits, such as cherries, Washington apples,
California grapes, oranges, and plums. Generally
speaking, U.S. fruits are popular, but their prices tend
to be much higher than those of local equivalents.
Gift baskets containing U.S. fruits, wines, candy,
and cookies are most popular during traditional
festivals such as Chinese New Year and the mid-autumn
festival. Demand for such highly regarded imports
increases dramatically leading up to the festivals, when
people purchase them as gifts for close relatives,
friends, and important business associates.
In 2006, the Nanning Wal-Mart participated in a U.S.
food promotional activity held by ATO Guangzhou for U.S.
fruits, poultry, seafood, and snack foods. The Wal-Mart
later held its own U.S. turkey festival. Both efforts
helped to increase sales and attract customers who in
general believe that U.S. food represents an elevated
living standard and style.
Beijing Hualian Hypermarket Co., Ltd. is a nationwide
chain that has three stores in Nanning, where food
accounts for 45 - 50 percent of its annual $80 million
in sales. In Nanning, Beijing Hualian carries U.S.
fruits such as Washington apples, California grapes,
plums, and oranges. Beijing Hualian imports grocery
items from Australia, Germany, Belgium, and Southeast
Asia. Although there are no U.S. groceries on its
shelves, the chain is interested in carrying such U.S.
products as candy, nuts, biscuits, potato chips, and
Thereís a bright future for U.S.
agricultural exports if aggressively
Due to the complexity of import procedures,
supermarkets in China rely on agents to import and
distribute foreign products. Beijing Hualian managers
told ATO Guangzhou that it was difficult for them to
find qualified agents to supply imports. There are no
big local importer/distributors that can reliably
provide a wide variety of imports. Beijing Hualian has
three import agents, but none carries U.S. products.
Nanning is a market full of curious customers who are
becoming affluent but are unfamiliar with many U.S.
products. Extensive media coverage and in-store
promotional activities (including samplings, tastings,
and demonstrations) will help to overcome this problem.
It is also critical that retailers and U.S. suppliers
help consumers distinguish U.S. products from those of
other countries, such as California plums from Chinese
ones and California pistachios from Iranian ones.
Since they gauge the acceptability and profitability
of U.S. products, post-promotion sales data may persuade
agents, importers, and distributors in the Nanning
market to expand their product portfolios to include
more U.S. goods.
Ken Chen is an agricultural marketing specialist in
the FAS Agricultural Trade Office in Guangzhou, China.