1. CHINA AS A KEY FUTURE MARKET
Future Fare
June 8, 2011

2. China Overview
The People’s Republic of China is one of the fastest growing economies in the world
With 20% of the world population, China is the most populous country, and one of the largest producers and consumers of agricultural products
China’s prospects, performance and role in international agricultural trade have implications for agri-food producers, consumers, and policymakers in Canada

3. Current Trade Relationship
Canada has a long-standing and comprehensive relationship with China which operates at many levels, and includes political, commercial, scientific, cultural and academic ties
Although bilateral trade has grown rapidly during the last decade, it is still thought to be below its potential
YEAR
Total Exports to China (CDN billion)
AGR Share (%)
Total Imports From China (CDN billion)
Total Trade Balance (CDN billion)
AGR Total Trade Balance (CDN billion)
2010
2009
2008
2007
2006
12.870
9.771
9.925
8.907
6.880
22.4
24.4
16.9
13.4
12.2
43.119
34.950
39.893
35.920
30.453
2.2
2.4
2.1
2.3
1.94
1.55
0.844
0.404
0.147

4. China’s Agricultural Trade Environment
China is a major global producer of agricultural products, especially fruits, vegetables, rice, cotton, and pork
China’s agricultural trade has grown rapidly, particularly since its market liberalization
Exports increased by more than 88% from 2005 to 2008
Agri-food imports from Canada roughly tripled since mid 1990s to $3.1 billion in 2009
The Chinese agri-food sector is now larger than EU 27 and double that of the U.S.

5. China’s Agricultural Policy Drivers
Food security policy aimed at social stability
Changing consumption patterns due to growth
Culture of relationships and respect
Recognition as a significant player on the world stage

6. Identifying Agricultural Opportunities for Canada
In general, demand for fruit, vegetable oils and traditional high protein foods favoured by Chinese – pork, poultry and fish – is expected to grow most rapidly
Several factors of production, such as low labour costs and government support, enhance the competitiveness of Chinese agricultural products
Other factors, such as its land tenure system and its fragmented transportation and cold storage infrastructure, weaken its competitiveness

7. China’s Beef Market
Beef consumption has been growing at just under 5 percent annually for the past 2 decades
China’s beef industry has only recently begun to segment into different value chains
The consumption of mid-value beef has shown strong growth since 2000
The high-value market, where Canada can compete, accounts for less than 5% of total consumption

8. China’s Dairy Industry
Demand for milk is rising rapidly and supply is not keeping pace
Considerable inefficiency remains in the Chinese dairy sector
There is great potential for improvements in productivity per cow, feeding practices and management
China’s National Development Plan for the Dairy Industry outlines ambitious production and herd size goals by geographic area
Canadian genetics can play a role in achieving these goals

9. China’s Pork Market
China consumes half of the world’s pork and is roughly self-sufficient
China may increasingly rely on imports to offset shortfalls in domestic production as they did in the 2008 Blue Ear Outbreak
Chinese pork imports were equivalent to 19% of Canadian production in 2008
Environmental challenges and food security considerations may lead to more stable and growing pork imports

10. Canadian Advantage
Canada is a reliable producer of diverse agri-food products
Canada is a leader in technological innovation in agriculture
Bilateral cooperation between the two countries is strong, operating at many levels, including political, commercial, scientific, and academic ties
Many major Canadian industry associations are active and/or have a presence in China
Major ports in British Columbia are a relatively short shipping distance from major import hubs in China such as Shanghai and Tianjin

11. China as a priority market
China is one of 10 priority markets identified by the Government of Canada, the provinces and territories and industry, and we will continue to work together to harness potential opportunities
The Beef and Cattle Market Access Committee and Value Chain Roundtables are forums to further discuss opportunities in China
Exporting success in China requires a more sophisticated, integrated approach